Tesla delays plan to restore Shanghai output to pre-lockdown levels -memo

SHANGHAI (Reuters) -Tesla Inc has delayed a plan to restore production at its Shanghai plant to levels before the city’s COVID-19 lockdown by at least a week, according to an internal memo seen .

The U.S. electric car maker originally aimed to increase output at its Shanghai plant to 2,600 cars a day from May 16, Reuters reported earlier this month citing another memo.

But the latest memo said that it plans to stick to one shift for its Shanghai plant for the current week with a daily output of around 1,200 units. It also said that it would now aim to increase output to 2,600 units per day from May 23.

Challenges remain for Tesla (NASDAQ:) to double the number of workers living and sleeping near production lines to maintain “closed-loop” operations, said a person familiar with the matter.

Companies in Shanghai are only allowed to reopen if they can operate under such an arrangement, which requires workers to be isolated.

There are also uncertainties over supplies, as factories of suppliers and logistics in Shanghai and surrounding areas have yet to be restored to normal, the person added.

Tesla did not respond to a request for comment. The person declined to be identified as the matter is private.

On one day last week, Tesla operated its Shanghai plant well below capacity, indicating the problems factories face trying to ramp up output under a tightening COVID-19 lockdown.

Shanghai aims to reopen broadly and allow normal life to resume from June 1, a city official said on Monday, after declaring that 15 of its 16 districts had eliminated cases outside quarantine areas.