EXCLUSIVE Tesla halts most production at Shanghai factory, sales plummet in April

Chinese-made Tesla Model 3 vehicles are seen during a delivery event at the carmaker’s factory in Shanghai, China January 7, 2020. REUTERS/Aly Song

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  • Plant will produce less than 200 cars on Tuesday – memo
  • Factory halted work due to supply issues – sources
  • China’s COVID policies pose challenges for manufacturers

SHANGHAI, May 10 (Reuters) – Tesla Inc (TSLA.O) has halted most production at its Shanghai factory over issues securing parts for its electric vehicles, according to an internal memo seen by Reuters, the latest in a series of difficulties for the factory.

The automaker’s sales in China had already fallen 98% in April from the previous month, data released by the China Passenger Car Association (CPCA) showed on Tuesday, underscoring the blow from severe COVID-19 lockdowns. in China.

Shanghai is in its sixth week of an intensified lockdown that has tested manufacturers’ ability to operate amid tight restrictions on the movement of people and materials.

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Tesla planned to manufacture fewer than 200 vehicles at its city plant on Tuesday, the memo said, well below the roughly 1,200 units a day it had increased to shortly after reopening on April 19 after a 22-hour shutdown. days.

Tesla did not respond to a request for comment.

After reopening, the plant produced 10,757 vehicles at the end of April, selling 1,512 of them, the CPCA said.

That compared to 65,814 cars sold in March and marked the lowest sales total since April 2020, four months after the plant began delivering Chinese-made cars.

Tesla did not export Chinese-made Model 3s and Model Ys from the Shanghai factory in April, the data showed.

Two people familiar with Tesla’s operations said earlier that the Shanghai factory suspended work on Monday after encountering difficulties obtaining supplies.

The company aimed to increase production at the plant to 2,600 cars a day from next week, Reuters previously reported. Read more

Overall passenger car sales for China, the world’s largest auto market, fell nearly 36% in April from a year earlier, the CPCA said. However, sales of battery electric vehicles and plug-in hybrids – a category targeted by China for incentives – rose more than 50%, boosted by particularly strong performances from BYD (002594.SZ) and SAIC-GM -Wuling (GM.N), (600104.SS).

Another auto association estimated last week that overall auto sales in China fell 48% in April as lockdowns closed factories, limited traffic to showrooms and dampened spending.

Shanghai authorities have tightened a citywide lockdown imposed more than a month ago on the mall with a population of 25million, a move that could prolong restrictions on movement throughout of the month.

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Reporting by Zhang Yan and Brenda Goh; Additional reporting by Sophie Yu; Editing by Stephen Coates, Kirsten Donovan

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