Tesla suspends manufacturing at its Chinese gigafactory

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Tesla suspended manufacturing at Gigafactory Shanghai for a week amid the region’s response to an increase in COVID-19 cases. Shanghai has implemented a two-stage lockdown to manage the outbreak.

Tesla had planned to resume manufacturing on Friday but decided to wait a few more days. Shanghai has not yet approved Tesla’s trucks to deliver vehicles to deliver vehicles in the western part of the city. Authorities have locked down parts of the city west of the river. Tesla employees in Shanghai could be affected by housing complex closures in that part of the city, making it difficult for them to show up for work.

Tesla relies on Gigafactory Shanghai to manufacture Model 3 and Model Y vehicles for the Chinese and European markets. German regulators recently approved the opening of Gigafactory Berlin, which will likely reduce Tesla’s reliance on China’s Gigafactory for exports to the European market.

CEO Elon Musk was recently seen dancing at the grand opening of Gigafactory Berlin. His celebratory mood may be warranted, given that regulatory bureaucracy and challenges from environmentalists (as well as an arson case) caused months of delays in opening the Gigafactory.

Elon Musk has previously hit back at California’s response to the COVID-19 pandemic, calling it too heavy-handed. Tesla has factories in the Fremont area but moved its headquarters to Texas. The company is also building a Gigafactory in the Austin area, where it will eventually manufacture the Cybertruck and Tesla Semi. Several companies like Walmart Canada have placed large pre-orders for Tesla Semis as part of their efforts to reduce their carbon footprint.

Musk has also moved to Texas and sold his homes in California, although he has expressed reluctance to part with a home once owned by actor Gene Wilder.

Musk himself has caught COVID-19 twice, but with his latest infection he says it’s a mild case. The first time, he questioned the reliability of the “fast” version of the test. Some SpaceX employees have also reportedly caught COVID-19.

California has since declared Tesla an essential business whose factories can remain open. Tesla is currently building a battery manufacturing plant in the Fremont area.

Tesla is taking a different approach in China, saying only that it will cooperate with its COVID-19 policies. It did not say exactly when it will resume manufacturing at Gigafactory Shanghai.

The Chinese government had previously banned Tesla vehicle owners from parking their vehicles at government facilities on espionage grounds despite Tesla’s refusal to have its cameras active in the country. Tesla built a data center in China to address some of the government’s concerns.

Tesla has raised the possibility of expanding its presence in other Asian countries such as India, where it plans to build factories to circumvent import taxes on electric vehicles. Auto parts makers in India have asked Tesla to consider sourcing parts from the country if that is the case. This could further reduce Tesla’s reliance on China to manufacture vehicles for the international market.



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