Tesla Giga Shanghai halts production due to supply chain challenges

Tesla Giga Shanghai has hit another snag in production. Tesla China halted production at Gigafactory Shanghai due to supply chain issues. 

People familiar with the matter informed Reuters that Tesla suppliers have recently faced supply issues. For instance, wire harness maker Aptiv stopped shipping supplies to Tesla and General Motors after a few employees were infected with the virus. As a result, Giga Shanghai halted production.

Shanghai has strict rules to contain COVID-19 breakouts. The major city in China issued digital pass cards to workers in the area to track infections. The cards include information about the workers’ identities, the companies they work for, negative nucleic acid test results, and the shuttle buses transporting them to work. 

China created a whitelist to support companies resuming production and minimize the impact of COVID on the supply chain. On April 30, approximately 1,854 companies made it onto the whitelist, including Tesla. All the companies on the list were authorized to resume work.

Gigafactory Shanghai was supposed to ramp vehicle production output starting May 16. According to an internal memo, Tesla China planned to add a second shift to Giga Shanghai, increasing the factory’s output to about 2,600 vehicles per day. Tesla Giga Shanghai has been operating with only one shift thus far. However, supply chain issues may prevent Tesla China from reaching its goals. 

Accordion got PYMNTS, automobile suppliers are continuously facing supply chain challenges and have redesigned some products to work around missing parts. For example, Gentex redesigned its digital rearview mirrors to avoid supply issues for specific electronic components. In February, Tesla adopted the same strategy when it pulled one of two electronic control units from its steering racks in Giga Shanghai’s Model 3 and Model Y vehicles. 

Gentex President and CEO Steve Downing predicted that the way suppliers deal with current supply chain challenges will dictate OEM/supplier partnerships in the future. 

“I think the harsh reality is that, how suppliers have handled this is going to dictate who partners with who in the future,” Downing sad during the Gentex earnings call on April 22. “And this will take years to pick those partners and relationships. But on the electronics component side, certain suppliers have done better than others of communicating early to allow you to adjust, and OEMs are starting to pick preferred partners on the electronics side as well.”

The Teslarati team would appreciate hearing from you. If you have any tips, reach out to me at maria@teslarati.com or via Twitter @Writer_01001101.

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