By Miranda Li
Leading Chinese technology executives are warning that all automotive and other technology OEMs in China may have to shut down in May if the suppliers in Shanghai and adjacent areas could not find a way to resume work and production, the Chinese press reported.
Shanghai and its neighboring city Kunshan have been in lockdown for nearly one month now, bringing suspension and disorder in manufacturing and supply chains.
Chinese EV startup Xpeng's Chairman He Xiaopeng was the first to give the warning on his Wechat on April 14. Technology media 36Kr quoted He Xiaopeng's saying in a report.
Yu Chengdong, CEO of Huawei's Business Units for Consumer and Intelligent Vehicles, echoed the concern. "If Shanghai could not resume work and production after May, all technologies and industries could face a halt, especially in the automobile industry." Since mid-April, some enterprises have already stopped production because of the disruptions in the supply chain. "If this continues, there will be huge losses for the economy and industry," he added.
He Xiaopeng shared the good news that government ministries and supervision departments were sparing no effort in coordinating and making the adjustment. He counted on more attention to the seriousness of the situation by related governments departments.
XPENG Motors(小鹏汽车) is not the only company which is affected by the lockdown in Shanghai and has stopped production.
NIO (蔚来), another new EV car brand, also suspended production, with its supply chain partners in Jilin, Jiangsu, Shanghai, and other places going into lockdown since March, according to the information posted on NIO's official APP on April 9.
Tesla's factory in Shanghai suspended production on March 28 and remains in stoppage. The factory has an annual production capacity of 450,000 vehicles. The output last December alone reached 70,847 vehicles.
In addition to new energy vehicle companies, the traditional auto OEMs also risked production shutdowns due to supply chain disruptions. The GAC Group, based in Guangzhou in southern China's Guangdong Province, reportedly halted its multiple production lines due to the Omicron spread.
China Association of Automobile Manufacturers (CAAM) pointed out a few days ago that the market entities have been facing enormous difficulties from the frequent outbreaks of the epidemic since March. The automobile chip shortage has not been alleviated, and the price of raw materials for power batteries has risen rapidly, further lifting the manufacturing costs. These have affected automobile companies' production and operation to a certain extent. The overall situation is worse than expected. The consumption momentum is insufficient, with an inevitable downward trend compared with the same period last year.
