By Greg Gao

The global EV giant Tesla resumed production in its Gigafactory Shanghai on April 19 after more than three weeks of suspension caused by the citywide Covid-19 lockdown. About 8,000 employees have already returned to work, with battery and motor production lines already producing at full speed, according to a senior director of manufacturing at Gigafactory Shanghai.

The EV maker shut down the massive factory on March 28 as Shanghai imposed a phased lockdown to curb an Omicron-fueled Covid-19 outbreak. As of April 18, production in the plant has been suspended for about 25 days. It is reported that the daily production capacity of the Shanghai plant is between 2,000 and 2,500 vehicles, so the reduction in production maybe around 50,000 vehicles.

Shanghai municipal government released guidelines for industrial enterprises to resume production on April 16 and issued a list of 666 major manufacturers that could potentially resume operations with workers in a strictly enforced “closed-loop” system. Tesla was on the list and was categorized as one of the businesses that “must resume production”. The company said it would continue to monitor the COVID lockdown in Shanghai closely and prepare to increase production.

Before the shutdown, Tesla’s Shanghai plant implemented 12-hour rotating shift work schedules. According to Bloomberg, now Tesla’s employees work 12 hours a day, six days a week. Therefore, it is estimated that Tesla’s Shanghai plant now runs at half of its full capacity.

At the same time, more than 100 Tesla’s component suppliers are trying to resume production, but still facing daunting challenges. A world-renowned parts supplier told JW Insights that after the official announcement of the whitelist of 666 companies to restart operation under stringent measures for staff operating in the “closed-loop system”, only 60% of the employees could participate in the production.

One industry insider pointed out that it may take some time for Tesla Gigafactory Shanghai to operate at full production capacity.

The Shanghai factory was the EV manufacturer’s top manufacturing site in 2021, making 484,130 Model 3 sedans and Y hatchbacks, more than half of its total shipment of 936,172 vehicles globally. It is not only to serve the fast-growing Chinese EV market but also to be an important export center for Tesla. But now, the poor logistics in Shanghai also pose another threat to the EV maker.

Tesla released its financial results for the first quarter of 2022 on April 21 and beat expectations on both revenue and earnings with $18.756 billion in revenue during the first quarter of 2022. Its automotive revenue reached $16.86 billion, up 87% from the same period last year. Tesla is likely to make 1.5 million cars in 2022, CEO Elon Musk told analysts on a post-earnings call on April 20.