Tesla pauses Giga Shanghai production over Christmas

giga shanghai general assembly
Credit: Tesla

Tesla has suspended production at Giga Shanghai, according to internal notice. CNBC reports this is in line with previously leaked plans to pause work in the last week of the year.

Tesla China has had a bumper year, despite multiple setbacks. However, the company has now canceled the morning shift at its Shanghai factory after reports it was shortening shifts. It also informed workers they could proceed on their break. Tesla did not offer any reason for the action.

There had been reports Tesla would pause Model Y production in Shanghai from Christmas day to January 1st. It coincides with reports that Tesla would cut production of the electric SUV by 30 percent.

China has relaxed its zero-Covid rules, but Tesla workers have reportedly been contracting the virus in the latest wave. Its suppliers are affected, too, making production difficult.

Tesla is also reportedly dealing with rising inventory levels despite setting new production records. It may not be unconnected to the looming lull in the Chinese auto markets. However, sources say Giga Shanghai has been dealing with the local market downturn by focusing on exports. It also tried to sweeten the deal for buyers by offering discounts.

Notably, Giga Shanghai, Tesla’s most productive plant, does not have a tradition of shutting down production at the end of the year.