A truck transporting new Tesla cars at its factory in Shanghai on May 13 last year. — Reuters
SHANGHAI: Tesla is preparing to resume production at its Shanghai plant on Monday following a three-week stoppage, having received the go-ahead from local authorities, two people familiar with the matter said.
The Shanghai factory, located in the Pudong district east of the city’s Huangpu River, suspended production on March 28 after the city started rolling out lockdown measures to combat a surge in Covid-19 cases that were later implemented city-wide.
The plan for resuming production has the blessing of local authorities but could still be subject to change depending on how the epidemic situation develops in the city, said the people, who declined to be named as the matter is private.
One of the people said the US carmaker planned to start with one shift and would gradually ramp up.
Tesla and the Shanghai government did not immediately respond to a request for comment.
The latest stoppage was the longest since the factory started production in late 2019 and has led to an output loss of more than 50,000 units, according to calculations based on internal output plans seen by Reuters.
Ongoing production at the plant could be impacted by difficulties in procuring auto parts, however, as logistics in the city and surrounding areas have been severely disrupted by China’s Covid-19 curbs.
He Xiaopeng, the chief executive officer of Chinese electric-car maker Xpeng, said on Thursday that automakers in China may have to suspend production in May if suppliers in Shangahi and surrounding areas were not able to resume work.
In a separate development, Musk’s offer to buy Twitter sparked concerns among Tesla investors and analysts that the electric carmaker could suffer as the chief executive becomes distracted by his takeover play and the possible sales of Tesla shares to fund the deal.
The billionaire entrepreneur, who also heads rocket company SpaceX, targeted Twitter Inc on Thursday with a US$43 billion takeover offer.
The idea of Musk working to close that deal, possibly by selling even more of his Tesla stake, and then overseeing yet another company has Tesla observers worried.
“Elon is distracted. He’s got a lot of things going on. He’s involved in a lot of different endeavors,” said Gene Munster, managing partner at venture capital firm Loup Ventures, which owns shares in Tesla. “This is a one to three months headwind to Tesla’s stock.”
Shares of Tesla, the world’s most valuable automaker, fell more than 9% since he disclosed his more than 9% stake in Twitter last Monday. On Thursday, Tesla’s stock fell 3.7%.
While Musk has talked about potential changes he would like to see Twitter make, Tesla faces its own challenges – the need to boost production at new assembly plants in Berlin and Texas, analysts said.
Keyword: Tesla to resume production at Shanghai plant on April 18, say sources