Tesla Finally Resumed Production After A 21-day Shutdown, But The Production Capacity Is Not Optimistic

After 21 days of sealing, Tesla's Shanghai factory has finally resumed production.

Tesla's Shanghai plant restarted production on April 18, with strict measures in place for employees in a closed-loop management system, according to people familiar with the matter. According to a real investigation report by the Financial Associated Press at the Tesla factory on the 18th, multiple logistics trucks were filling barrels of water in front of the factory gate that day. The security staff at the factory gate said that the factory is currently "preparing materials for the resumption of production."

On April 16, the Shanghai Municipal Commission of Economy and Information Technology issued a list of 249 automobile-related companies in the "Shanghai Industrial Enterprises Resumption of Epidemic Prevention and Control Guidelines (First Edition)" list. The list of vehicle manufacturers included Shanghai Volkswagen. , SAIC-GM, Tesla. In addition, on the white list of key enterprises to ensure operation issued by the Ministry of Industry and Information Technology, Tesla is listed on the list of suspended enterprises that must resume work.

On the day the list was released, a person familiar with the matter revealed that Tesla had notified employees in Shanghai by phone to prepare for the resumption of work next week. Tesla will arrange for buses to return employees who are notified.

As of April 17, Tesla’s Shanghai plant will be shut down for up to three weeks. Based on the production of about 2,100 cars per day, Tesla's Shanghai plant has produced about 44,100 fewer cars since the shutdown on March 28, accounting for about 14.5% of Tesla's production last quarter.

The memo sent by Tesla to employees shows that in the first three days after entering the factory, all employees were tested for nucleic acid for three consecutive days, their body temperature was checked twice a day, and their hands were washed four times a day, twice in the morning and twice in the afternoon.

A memo sent by Tesla to employees shows that Tesla will provide each employee with a sleeping bag and mattress. Since there is no purpose-built dormitory, employees will be required to sleep in designated areas of the plant (sleeping on the floor). There are other spaces for showers, entertaining (two facilities not yet finished) and dining.

The company will provide employees with three meals and a daily allowance of about 400 yuan ($63), but the actual amount will depend on the position and level, one of the people said.

However, Bloomberg's investigation pointed out that only some employees have entered the "closed-loop production" system, which lasts between 10 and 20 days. The specific resumption plan of Tesla's Shanghai plant will be adjusted according to the epidemic prevention policy, and it will take time to restore full production capacity.

In addition, related industry analyst Ming-Chi Kuo pointed out that after the resumption of work, the production line of the Tesla Shanghai factory will be in one shift, while before the closure of Shanghai, the Tesla Shanghai Super Factory was in two shifts, so the hourly workload will be reduced. It is expected to drop from 80 to 85 to 40 to 50. Based on a rough estimate of about 40 to 50 JPH per hour, the current Tesla Shanghai factory spare parts inventory level is about 2.5 weeks, which is equivalent to about 25,000 to 30,000 electric vehicle shipments per month.

There are also people in the industry who worry that in closed-loop production, the supply of spare parts is also a problem; under the situation that various supply chain manufacturers have stopped production on a large scale, the re-connection of parts from upstream to suppliers and then to OEMs also requires certain time. Therefore, in a short period of time, Tesla's resumption of production capacity must be greatly reduced than before the closure.

And such concerns are not only a problem for the Tesla family, but also reflect the entire Jiangsu, Zhejiang and Shanghai automotive industry clusters, and countless Tier 1, Tier 2, Tier 3, and Tier 4 suppliers have fallen silent during the epidemic. In the environment where the epidemic in Shanghai has not been alleviated and manufacturers are collectively closed-loop production, the production capacity that cannot be exported to other places is still useless for foreign car companies that have stopped production due to the supply chain.