Local media sources have recently published a report confirming Tesla has suspended its production plant in China. The reports confirm it is the Shanghai plant that has been shut down by the company.
Tesla Shuts Down Shanghai Plant
The reports started to float on Saturday about the company shutting down its production plant based in Shanghai. It was later confirmed it was not a permanent shutdown but a temporary one.
The media sources have cited two inside sources aware of the situation. As per them, the company has circulated an internal note announcing their decision to the temporary suspension of the production plant.
It has been revealed that Tesla had already announced that they will stop production at the particular plant in December last week.
However, they have reportedly suspended production at the plant prior to the beginning of the last week. This has raised many concerns as to why the company has made the decision.
According to claims, the Shanghai production plant of Tesla is known for producing 5,000 vehicles per day.
Each day that the company keeps its plant’s production suspended without a schedule, it will produce 5,000 vehicles less.
Information from the Internal Sources
According to the sources, the suspension began on Saturday morning (December 24). As the day began, the morning shift was informed that the morning shift had been canceled.
Initially, the workers were informed that the production had been suspended and the first shift could take their break early. This information was shared with the workers through the notice.
However, the company did not provide any clear reason as to why they had made the decision of suspending the production.
Tesla had Pre-Planned a Production Suspension
Tesla had already made an announcement at the beginning of December that they will be suspending production at the Shanghai plant.
At that time, the officials announced that the suspension would begin on December 25 and will remain in place until January 1.
The particular plant is mainly used for the production of the Tesla Model Y electric vehicles. Turns out, Tesla suspended production at the Shanghai plant on Saturday 24, 2022.
COVID-19 Might be the Reason
According to internal sources, it is COVID-19 that is the main culprit behind the early suspension at the Tesla production plant in Shanghai.
The COVID-19 situation is still bad throughout China. Especially, the business and production districts are heavily impacted by the rising wave of COVID-19 infections.
China recently lifted the lockdowns on the business districts, which was hugely welcomed by the business sector.
Still, the number of COVID-19 cases has continued rising in the country.
Even the largest tech company in the world, Apple has faced major supply chain issues for its latest iPhone models due to the lockdowns in China.
Claim by Several Workers
Multiple workers at Tesla have shared information related to the COVID-19 situation in their company. They have claimed that many people at the plants have been falling sick with the coronavirus.
Even the suppliers of Tesla are facing the same kind of situation. There is another wave of the coronavirus variant in China and the country is again getting pushed against the wall.
Although the executives have tried keeping the situation a secret for the past week, their operations have been impacted by the wave.
This means that the company has been trying to deal with the COVID-19 wave but had to give in as the cases just keep increasing.
The company is now trying to get itself out of the bad situation by shutting down early. The workers also claimed that they are falling short on the productions that are to be delivered outside of China.
This means that Tesla needs to brace itself for another major impact as the upcoming earnings report is not going to be easy for the shareholders to swallow.
Since the announcement, Tesla’s shares have dipped by 1.76% and they now trade at $123.15 per share.