Tesla suspends most of its electric car production in Shanghai

Company faces problems in securing parts as city faces its sixth week of an intensifying Covid-19 lockdown

Chinese-made Tesla Model 3 vehicles at the electric car maker's factory in Shanghai. Reuters

Tesla has suspended most of its production at its Shanghai plant due to problems encountered in securing parts for its electric vehicles, the latest in a series of difficulties for the factory.

The factory, also known as Gigafactory 3, plans to manufacture fewer than 200 vehicles on Tuesday, Reuters reported, citing an internal memo.

This is far less than the roughly 1,200 units it has been building each day since shortly after it reopened on April 19 after a 22-day closure.

Sources had earlier said supply issues had forced the factory to halt production on Monday.

The Gigafactory 3 plant produces the Model 3 sedan and Model Y crossover for the China market and for export.

Shanghai is in its sixth week of an intensifying Covid-19 lockdown that has tested the ability of manufacturers to operate amid hard restrictions on the movement of people and materials in the city of 25 million people.

The lockdown has been tightened and there are concerns that it could be extended to the end of the month.

Tesla Gigafactory opens in Germany — in pictures

Tesla chief executive Elon Musk speaks during the opening day of the Tesla Gigafactory in Gruenheide, Germany. EPA

Musk speaks next to German Chancellor Olaf Scholz and the prime minister of Brandenburg state, Dietmar Woidke, during the opening ceremony. AFP

The Tesla chief, right, was cheered as he oversaw the handover of the car maker's first German-made cars at the Gruenheide plant. EPA

Musk described the opening as "another step in the direction of a sustainable future". EPA

Tesla is likely to launch a test version of its new "full self-driving" software in Europe, possibly next year, the chief executive said. EPA

Musk dances as he hands over the first Teslas from the new factory. Getty Images

Musk said battery production will be a "challenge" next year and a "limiting factor" in the coming years. Reuters

Tesla cars are parked at the site of the new Tesla Gigafactory in Gruenheide, Germany. Reuters

Tesla was handing over the first Model Y cars made at its €5 billion Gruenheide plant to clients on March 22, the company said. Getty Images

The new Tesla Gigafactory is the company's first European production centre. Getty Images

Newly completed Tesla Model Y electric cars parked at the site near Gruenheide. Getty Images

The new factory is the largest investment in a German car factory in recent history. Getty Images

A road sign reading 'water protection area' next to the Tesla logo at the site of the Tesla factory. EPA

A road sign reading 'Tesla Street' at the new plant. EPA

A building under construction at the Tesla factory. EPA

At full capacity, the factory will produce 500,000 cars annually. EPA

Tesla plans to hire 12,000 workers at the plant. Bloomberg

Tesla had planned, as late as last week, to increase output to pre-lockdown levels by next week. The electric car maker had intended to increase output at the plant to 2,600 cars a day from May 16, Reuters reported previously.

It was not immediately clear when the current supply issues can be resolved, said the sources. Tesla did not immediately respond to a query for comment.

Meanwhile, the China Passenger Car Association is scheduled to release April sales for Tesla, China's second-largest EV maker behind BYD, on Tuesday.

Another car association said last week it estimated overall car sales in China dropped by 48 per cent in April as zero-Covid lockdowns shut factories, limited traffic to showrooms and put the brakes on spending.

Aptiv, Tesla's main supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla and General Motors after Covid-19 infections were found among its workers, Reuters reported on Monday.