COVID-19 outbreak in US takes toll on Tesla: experts

Source:Global Times Published: 2020/5/7 22:26:42

A Tesla store in Beijing Photo: IC

 Tesla's Shanghai Gigafactory adjusted and maintained its production line during the May Day holidays, and all aspects of work are proceeding as planned, the US electronic carmaker told the Global Times on Thursday.

Media reports have said the company halted its production and failed to resume work on Wednesday following the holidays, partly due to a component shortage caused by the coronavirus outbreak in the US.

Tesla's product line in Shanghai only included the Standard Range Plus version of the Model 3 in the first quarter. The Shanghai factory is now producing 3,000 vehicles every week, and 70 percent of its supplies are imported, according to media reports.

Although the company is proceeding with its localization goals, major parts of the Tesla Model 3 are still imported from the US. The production at its Shanghai plants can be hugely affected by the coronavirus outbreak in the US, car analysts warned.

"The suspension of the assembly line caused by a component shortage can be a huge blow. It could cause the company to have problems with its cash flow, as well as delayed deliveries and loss of clients if the supply shortage lasts," Wu Shuocheng, an independent car analyst, told the Global Times on Thursday.

Tesla decided to temporarily suspend production at its factory in Fremont, California, from March 23 and its factory in New York has temporarily suspended production, said the company on its official website.

The impact of the US epidemic on Tesla's sales is huge, Feng Shiming, an auto industry analyst, told the Global Times on Thursday.

"Its core parts such as main motors, battery management systems, visual control systems and core components of the autopilot are all imported. The shortage will be determined based on when its US factories reopen. The impact is large and how long it will last is uncertain," Feng said.

He predicted that Tesla's April-May sales in China will decline from March and thus fall short of market expectations.

The uncertainty and possible rebound of the coronavirus in the US may accelerate the domestic production of key components, he added.

"That doesn't rule out the possibility that the company may build an R&D center in China," Feng said. 

Production of Tesla's Model 3 in its Shanghai Gigafactory is set to top 4,000 units per week by mid-2020, and the company said it plans to hike the domestic part rate to 70 percent from the current 30 percent by mid-2021.


blog comments powered by Disqus