The Business Times

Tesla readies China factory for even greater volumes

Published Thu, Jun 23, 2022 · 08:30 PM

TESLA is taking steps to ramp up output at its factory in Shanghai, partly suspending manufacturing capabilities at various points till early August to upgrade production lines, according to people familiar with the matter.

The US-based electric carmaker plans to double its original planned annual target to 1 million cars, said the sources, asking not to be identified because the details are private. It will halt most production on its Model Y assembly line for the first 2 weeks of July while an upgrade is underway, one of the sources said, while another person said Tesla will make similar tweaks to its Model 3 production line for a 20-day period starting Jul 18.

Upgrade work at the factory south of Shanghai is expected to be completed by around Aug 7, with output of the Model Y SUV then increased to 14,000 units a week, from about 11,000 pre-pandemic, and production of the Model 3 sedan at 7,700 units a week from 5,500 previously, the sources said.

With the upgraded production facilities and an expanded workforce on production lines, Tesla will be able to make more than 1 million EVs a year in China, the sources said. The original installed capacity of the carmaker’s Shanghai plant was 450,000 units, according to its 2020 annual report.

Representatives for Tesla in China did not immediately respond to requests for comment.

Tesla went to extraordinary lengths to keep its China factory up and running during Shanghai’s months-long lockdown, subjecting thousands of workers to a so-called closed-loop system whereby they slept on site to maintain partial production after the plant was shut entirely for around 3 weeks till mid-April.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

VIEW ALL

Tesla shipped 484,130 cars from Shanghai in 2021, accounting for about 52 per cent of the carmaker’s 930,422 global deliveries. Tesla is aiming to increase global sales by more than 50 per cent in 2022, chief executive officer Elon Musk said on an earnings call in January.

The company has staged a remarkable comeback after Shanghai’s Covid-19 lockdown, with May output more than tripling from the month prior at 33,544 cars.

“There’s just a lot of super talented, hard working people in China that strongly believe in manufacturing and they won’t just be burning the midnight oil, they’ll be burning the 3 am oil,” Musk said in May. “They won’t even leave the factory, type of thing, whereas in America, people are trying to avoid going to work at all.”

He praised the work of Chinese firms in an interview with Bloomberg News editor-in-chief John Micklethwait this week, saying they’re “extremely competitive, hard-working and smart”.

Tesla’s Shanghai factory will also halt production entirely from Jul 1-4 due to an electricity cut related to the upgrade, according to an internal memo seen by Bloomberg. BLOOMBERG

KEYWORDS IN THIS ARTICLE

READ MORE

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to  t.me/BizTimes

Transport & Logistics

SUPPORT SOUTH-EAST ASIA'S LEADING FINANCIAL DAILY

Get the latest coverage and full access to all BT premium content.

SUBSCRIBE NOW

Browse corporate subscription here