Tesla faces setback at Gigafactory Shanghai due to supply issues

Tesla is facing a setback in ramping up production at Gigafactory Shanghai after the three-week shutdown of the plant. Some supply issues are negatively affecting production to the point that it might need to shut down again.

Like many other companies, Tesla had to shut down production at its Shanghai factory last month after local authorities imposed serious lockdowns on the population in an attempt to limit the spread of COVID-19 after a surge in cases during the first quarter.

The automaker was finally able to restart production on April 19 after 22 days of being shut down.

Tesla brought back 8,000 people to work in a “closed-loop” shift and sleep at the factory to help reduce worker movements in the city.

At the time, we noted that on top of missing 22 days of production, it would take time for Tesla to ramp production back up to pre-lockdown levels.

Last week, we learned that Tesla was actually making a lot of progress and aimed to ramp production back to 2,600 vehicles per day by May 16.

However, it looks like Tesla has hit a setback based on several media reports coming out of China. Reuters reported that Tesla had to stop production on Tuesday due to part shortages.

A Tesla China spokesperson told Bloomberg that production has not stopped at Gigafactory Shanghai, but they confirmed that the automaker is having some supply issues.

Reuters updated its report to say that production output today will be limited to just 200 vehicles due to the supply constraints. Supply chain analyst Ming-Chi Kuo added that the reopening was unstable due to supply and logistics bottlenecks but that those were temporary:

Sources told Bloomberg that production may have to completely stop later this week if the supply issues are not solved.

The reports don’t go into details about the nature of the supply issues, but Aptiv, a company that supplies wire harnesses to Tesla, recently announced that it had to halt shipments. It is expected to contribute to Tesla’s current supply issues.

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