The Chinese communist regime’s mass lockdowns and extreme COVID-19 control measures have severely affected China’s automobile industry and global supply chain. The Tesla Shanghai factory’s exports in April dropped to zero. An expert believes the situation won’t improve until June.
The China Association of Automobile Manufacturers published its April automobile production and sales data on May 11. Affected by the new outbreaks of COVID-19 and pandemic control measures, China’s auto production and sales in April were 1.205 million units and 1.181 million units respectively, down 46.2 percent and 47.1 percent from March, and 46.1 percent and 47.6 percent from the same period last year (year-on-year).
The Chinese regime’s extreme “zero-COVID” policy wasn’t able to stop the outbreak, but did stop Tesla Shanghai’s exports in April. According to the manufacturer’s data, Tesla did not export any China-made Model 3s and Model Ys from its Shanghai factory in April. Due to the lockdown of Shanghai that started in late March, Tesla had to suspend production twice. Its sales in April plummeted 97.7 percent from March.
The lockdown of Shanghai and other major cities in the Yangtze delta severely disrupted logistics and the supply chain, which also contributed to the plunge in Tesla’s production and exports. Tesla Shanghai exported 60 vehicles in March. Last year, Tesla Shanghai exported 484,130 vehicles, nearly half of the company’s 936,000 global deliveries.
Although Tesla’s Shanghai plant resumed production on April 19 after a 22-day halt, it is still struggling to get the production line back to full operation. According to Reuters, Tesla cut its daily production to less than 200 vehicles on May 10 because of the interruption in the supply of some key parts. Tesla admitted that local logistics were hindered.
It’s reported that an outbreak of COVID-19 occurred in Aptiv, one of Tesla’s parts suppliers, and so the company stopped shipping to Tesla.
Tianfeng International Securities analyst Ming-Chi Kuo said in his Twitter post that after the resumption of work at Tesla’s Shanghai plant, production was unstable. The main problem was the impact of component supply and logistics. However, Tesla’s production halt is temporary, and that’s why Tesla has not made any major moves to shift production from its Shanghai factory to its factories in other regions, he said.
Kuo believes that although Tesla is trying to restore production capacity to pre-pandemic levels in mid-May, based on the current situation of logistics and supply chain, there won’t be any significant improvement in Shanghai’s manufacturing until June.