News Hour Special

Tesla suspends production at Shanghai amid Omicron wave

US electronic vehicle company Tesla has suspended its production for two days at its Shanghai unit. This comes after new Covid guidelines were issued in China as there is a surge in the number of cases again and the country is experiencing a fourth wave. The mainland recorded 1,226 locally transmitted omicron cases on 16th March.

“We are actively cooperating with the government’s requirements for nucleic acid testing and other epidemic prevention requirements, and at the same time are doing our best to ensure production, overcoming difficulties together,” the company said in a statement.

Tesla has sent an internal notice to the employees and the supplier about the 2-day suspension of production activities as the country prepares itself for lockdown. According to reports, this would potentially mean a loss of approximately 4000 vehicles. Tesla hasn’t stated anything about suspension of production in other factories, so it may be able to cover the loss.

The factory known as the Gigafactory 3 makes the Tesla Model 3 sedan and the Model Y crossover sport utility vehicle for the Chinese market. It is also a crucial hub for markets of Germany and Japan. According to China Passenger Car Association, the unit delivered 56,515 vehicles in February, including 33,315 for export.

Gigafactory is one of the most important plants of Tesla. Compared to the older Fremont factory in California, its cars are widely considered to be superior. The company was also planning to increase its production capacity this year to 1 million per annum and had further plans to build another production unit.

As compared to other major countries, China’s new Covid cases are low, but the authorities do not want to take any chance and are planning to enforce strict guidelines.

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