The American EV maker, Tesla, has temporarily stopped the production of all of its electric cars worldwide. Tesla Gigafactory production in Fremont was already shut due to the COVID-19 lockdown.
Now, the China Gigafactory, which was producing the Model 3 and Model Y, has also been shut down due to supply shortages.
According to the Chinese news outlet 36kr, Tesla factory workers were supposed to return to work on May 6. However, their leaves have been extended until May 9, so that the supply chain problems can be solved.
Tesla Gigafactory Production: When Will It Restart?
It is difficult to tell. Ambrose Conray from Serif Consulting told CNBC, “Tesla has a very complicated supply chain as they’ve tried to set up this new factory in Shanghai.”
Meaning Tesla uses “the same suppliers that they have used for their Model 3 and Model Y in Fremont,” he further added. In other words, both Gigafactories involved in the production are dependent on the same supply chain and use the same parts.
Lockdown orders, due to COVID-19, in the US and Mexico have led to a shortage in the Tesla Gigafactory China since most Tesla parts come from those two countries.
However, there is some good news for Tesla as the Governor of California, Gavin Newson, has given permission for several businesses and manufacturing plants to open.
NEW: Today CA released guidance for some lower risk industries to begin re-opening.
Starting TOMORROW places like:
-clothing stores
-bookstores
-florists
-sporting goodsAlong with manufacturing and logistics associated can start to re-open.
LEARN MORE: https://t.co/xtXFwVeWc2 pic.twitter.com/raiY8W21r9
— Gavin Newsom (@GavinNewsom) May 7, 2020
Tesla qualifies as a manufacturer, so they will most likely open. However, the supply chain issue won’t be solved unless the parts manufacturers in the US and Mexico start production.
According to Ambrose, the Mexican government is planning to contact the parts suppliers to assist them in recovery.
Delay In Tesla Gigafactory Production Of Electric Cars
Ambrose said that all automakers would suffer from supply chain issues, even if they plan to open their plants. He explains, “Automotive plants don’t hold enough goods (raw materials or car parts),” which is why they can’t continue production without a functioning supply chain for a long time.
Other manufacturers, including Ford and GM, are also planning to open on May 18. There is no indication when Tesla will resume production, as Elon Musk simply replied, “Yeah!!” to the Governor’s tweet.
But as Ambrose said, “Even if they restart on May 18, we don’t know when Mexico will be back up.”
