Tesla Halts Giga Shanghai Production for Rest of Year: Report

Tesla on Saturday suspended production at its Gigafactory in Shanghai, China, and closed down the plant for the rest of the year, according to two people familiar with the developments and an internal notice seen by Reuters.

The news follows a report from earlier this month that suggested Tesla would suspend production at Gigafactory Shanghai from December 25, 2022, to January 1, 2023, due to slowing demand in China.

Per reports, Tesla has instructed all employees who left Shanghai to return by January 1, 2023, to prepare to restart production.

Tesla dropped off a sea of ready-to-ship vehicles from its Chinese Gigafactory at the Shanghai port as it took its factory offline, as seen in a drone flyover video from Chinese Tesla enthusiast Wu Wa (via @TroyTeslike and @Berlinergy).

YouTube video

Waning demand may not have been the only reason Tesla decided to close down Giga Shanghai for a week or so — the plant didn’t even pause production for Christmas last year. Wu Wa noted in the description of his video that “more than half of the people in the Shanghai factory” had already contracted COVID-19 by the time production was suspended.

The spread of COVID-19 has worsened in China since the government abruptly decided to end its zero-COVID policy, which was strangling economic activity in the country, earlier this month. “It is hoped that in the new year, the epidemic will pass quickly and everything will return to normal,” Wu Wa added.

Earlier this month, Bloomberg suggested that Tesla plans to shorten shifts and cut back on hiring at Giga Shanghai. This state of affairs could be going global, as a report from this week said that Tesla has instituted a hiring freeze and may lay off some employees in the first quarter of 2023.

Despite concerns over demand and production cuts, Tesla’s Chinese Gigafactory delivered more than 100,000 vehicles in November alone.

Update (December 26, 1:30 p.m. PT): According to a report from CnEVPost, Tesla has denied media reports of a production suspension at Giga Shanghai. Instead, an unnamed source from Tesla China said the vehicle production line has been taken offline for scheduled annual maintenance (while other workshops remain functional) and workers have gone on break in the meantime.