Tesla And Other Carmakers Forced To Halt Production Due To Shanghai Lockdown

The coronavirus lockdown in Shanghai is having widespread impact on carmakers from China and Japan to America, forcing many to halt or delay production of vehicles. Supply chain disruptions caused in part by the ongoing pandemic and in part by parts procurement issues due to the war in Ukraine, combine with staffing and semi-conductor issues that lead to a critical situation for carmakers.

Production at Tesla’s Gigafactory in Shanghai, which builds cars for the China market and is also an important export base, has been halted since late March after the government launched a two-stage lockdown that saw millions of residents, and thousands of auto workers confined to their homes for weeks on end. The U.S. automaker had originally planned to only stop operations for four days, but was forced to prolong the stoppages after the authorities extended tight citizen movement restrictions in the eastern half of the city.

The current stoppage is one of the longest since the factory started production in late 2019. Tesla makes 6,000 Model 3 and 10,000 Model Y models a week at its Shanghai plant. Volkswagen, Toyota and General Motors, who have major joint ventures with China’s huge SAIC Motor, were forced to scale back production and ask their local workers to sleep on site to isolate them from the pandemic.

Economists are concerned that the slowdown in Shanghai could affect growth in the world’s second largest economy.

Operations in nearby Japan have been affected too due to delays in parts procurements from suppliers in Shanghai. Mazda was forced to shut down two plants in Japan for a total of eight days in April, while Mitsubishi suspended operations at a major factory in central Japan for five days from mid-April.