Production Woes in China Continue for Tesla

Tesla’s plans in China keep getting pushed back by pandemic lockdowns. Will it continue to slow the EV builder down?
Written by Andrew Koole
Reviewed by Kathleen Flear
May 25, 2022
When the pandemic lockdown in
Shanghai
slowly lifted in April, it looked like
Tesla
would finally have the chance to reach their 2022 production goals for the city’s Gigafactory. That hope has, once again, been dashed.
Tesla’s assembly line is all but completely shut down, this time because of trouble getting parts to the plant, an issue not helped by the fact that China’s COVID lockdown continues to bring the movement of people and materials to a slow drip.
The ongoing struggle to bring production back to pre-lockdown norms could have a massive effect on Elon Musk’s main gig.
Jerry
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Sales in China slump significantly for Tesla

Under normal circumstances, Tesla’s Shanghai factory produces up to 2,600 vehicles a day. And while the plant managed to return to 1,200 units a day after reopening in mid-April,
Reuters
says that number has dropped to 200. 
Further damaging the company’s hold on the
Chinese market
is the market itself. Tesla sales have dropped by 98% in April compared to March, thanks to the ongoing lockdown. In terms of units, thats just over 1,500 cars sold in April compared to the 65,800 sold in March.
Compared to last year, EV sales in China have actually increased in April by 50%, even as overall auto sales dropped by 36%. Tesla was hoping to take advantage of that market shift this year, but the production woes in Shanghai have limited their impact dramatically.

Other struggles for Tesla

Tesla might be the most highly valued automaker in the world right now, but
Elon Musk
and Co. are still feeling the pain of the obstacles being faced by the industry. 
Supply chain troubles, high commodity prices, and the ongoing chip shortage have forced the company to
raise prices
more than once this year, despite the CEO’s past promises to bring the starting price for a Tesla down to $25,000.
Falling tech shares have also put a dent in Tesla’s valuation, with current stock prices dropping by nearly 28% compared to last year.
The EV brand’s position on top will help them weather the current storms in the industry, storms that might sink a few other
EV startups
. But the company’s performance likely won’t be helped by the CEO’s latest distraction—the purchase of Twitter.

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