Why is Tesla not resuming production at Shanghai factory on Monday

Tesla Inc. had expected to resume operations at its giga factory, in Shanghai, China, on Monday. However, it sent an internal notice to its staff in the city, which said that production would not restart after the weekend. Reuters had earlier reported about the resumption of production on the first day of the new week but the outlet has seen a notice that says that work will not begin.

Although the notice mentioned that work would not resume on Monday, it did not mention the reasons for halting production nor did it mention an expected date of resumption of operations in Shanghai.

Tesla first shut down production in Shanghai, on March 28. Beijing had launched a two-stage lockdown in areas east of the Huangpu River, where its gigafactory is located. The electric vehicle (EV) manufacturer was hoping for a four-day halt in production. However, work has been halted for a longer period as a result of restrictions in the eastern side of Shanghai. Most parts of the city are now under lockdown.

This is one of the longest stoppage of work, according to sources who spoke to Reuters. They also said that the EV maker rolls out 6,000 Model 3 and 10,000 Model Y cars, each week at its gigafactory in the city. The Shanghai plant had round-the-clock production.

A while ago, CEO Elon Musk had said that the Shanghai plant had been producing more vehicles when compared with its plant in Fremont, California. The Shanghai plant rolls out EVs for both domestic and international markets such as Germany and Japan. However, German exports might taper down as Tesla opened a giga factory near Berlin, on March 15. This is its first factory in Europe and is reported to be a $5 billion facility.

Although Tesla did not respond when asked for comment, Elon Musk posted on his favorite platform Twitter, on Saturday. He noted that it had been an “exceptionally” difficult quarter. He mentioned supply chain interruptions and China’s zero-COVID policy as reasons that lead to low production.

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