US electric carmaker Tesla has temporarily suspended production at its Gigafactory in Shanghai. According to reports citing sources with knowledge in the matter, Tesla had informed its workers to extend their Labor Day holiday breaks.
Tesla employees working at the Shanghai Gigafactory were supposed to return to work on Wednesday after their extended five-day Labor Day break. However, management at the facility informed them that they can return back to work on May 9 instead. The company and its management in China did not disclose the reason for the abrupt halt of operations.
Local reports that cited separate sources claimed that the facility had to suspend operations for a few days as it was experiencing a shortage of components. The company's first factory outside of the US has reportedly not received enough components to proceed with the production of the new Tesla Model 3 units. The same sources claim that the issue is being fixed and the facility should be able to continue its production of China-made Model 3 by the end of the week.
Reports claim that there are still employees present at the site despite the notice given to workers that are on break. Most of the people present are reportedly inspectors and repair personnel. Prior to the reports of the shutdown extension, Tesla had mentioned that it would be conducting regular maintenance work at the Shanghai Gigafactory during the Labor Day holidays. It added that it will also need to conduct production-line adjustments during the period from May 1 to May 5.
Slight delays in production at its overseas manufacturing plant is a serious issue for Tesla, particularly given that its other electric vehicle assembly plants in the US have been idled to mitigate the spread of the coronavirus pandemic.
Tesla is heavily relying on its Shanghai Gigafactory to offset its production deficits in the US. China has already started to lift restrictions after its coronavirus cases had begun to slow down. Meanwhile, the US is just now feeling the full impact of the pandemic, with most states still continuing to impose strict shelter-in-place orders and lockdowns.
Tesla's Shanghai Gigafactory was temporarily shut down earlier in the year when the disease first started to spread in China. With the aid of local authorities, the plant was among the first manufacturing facilities to resume production after the number of infections had died down. Thanks to the early restart, Tesla was able to report a surge in sales in China for the month of March. While other automotive manufacturers were still working on restarting their plants, Tesla was already filling orders for its Made-in-China models.
