Tesla halts most output at Shanghai plant, April sales dive

Wuling Motors Holdings

10/05/2022 11:56

* Plant to produce fewer than 200 cars on Tuesday - memo
    * Plant halted work due to supplies issues - sources
    * China’s COVID policies pose challenges for manufacturers

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    SHANGHAI, May 10 (Reuters) - Tesla Inc  TSLA.O  has halted
most of its production at its Shanghai plant due to problems
securing parts for its electric vehicles, according to an
internal memo seen by Reuters, the latest in a series of
difficulties for the factory.
    The automaker's sales in China had already slumped by 98% in
April from a month earlier, data released by the China Passenger
Car Association (CPCA) showed on Tuesday, underscoring the hit
from China's hard COVID-19 lockdowns.
    Shanghai is in its sixth week of an intensifying lockdown
that has tested the ability of manufacturers to operate amid
hard restrictions on the movement of people and materials.
    Tesla planned to manufacture fewer than 200 vehicles at its
factory in the city on Tuesday, according to the memo, far below
the roughly 1,200 units per day it had ramped up to shortly
after reopening on April 19 following a 22-day closure.
    Tesla did not respond to a request for comment.
    After reopening, the factory produced 10,757 vehicles by the
end of April, selling 1,512 of them, the CPCA said.
    That compared to 65,814 cars sold in March and marked the
lowest sales tally since April 2020, four months after the
factory started delivering China-made cars. 
    Tesla did not export any China-made Model 3s and Model Ys
from the Shanghai plant in April, the data showed. 
    Two people familiar with Tesla's operations said earlier
that the Shanghai plant suspended work on Monday after it faced
difficulties procuring supplies.
    The company had been aiming to increase output at the plant
to 2,600 cars a day as soon as next week, Reuters reported
previously.  urn:newsml:reuters.com:*:nL2N2WY0AO
    Overall passenger car sales for China, the world's largest
auto market, dropped almost 36% in April from a year earlier,
the CPCA said. However, sales of battery-electric vehicles and
plug-in hybrids - a category China targets for incentives - rose
more than 50%, boosted by particularly good performances by BYD
 002594.SZ  and SAIC-GM-Wuling  GM.N   600104.SS .       
    Another auto association estimated last week that overall
auto sales in China had dropped 48% in April as lockdowns shut
factories, limited traffic to showrooms and put the brakes on
spending. 
    Shanghai authorities have tightened a city-wide lockdown
imposed more than a month ago on the commercial hub with a
population of 25 million, a move that could extend curbs on
movement through the month.

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China medical experts say zero-COVID strategy buys time to
vaccinate more people     urn:newsml:reuters.com:*:nL2N2X206H
China Passenger Car Sales China Passenger Car Sales    https://tmsnrt.rs/3we1njJ
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 (Reporting by Zhang Yan and Brenda Goh; Additional reporting by
Sophie Yu; Editing by Stephen Coates, Kirsten Donovan)
 ((zoey.zhang@thomsonreuters.com))