Tesla Stops Production In China

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Tesla Stops Production In China

Tesla Stops Production in China

Following intensified Covid restrictions in China's Shanghai city in the wake of the increased infection rate, Tesla has suspended production at its first gigafactory outside its home country. The plant is crucial for the company as cars manufactured here are exported to Europe as well as sold locally. Data from the China Passenger Car Association reveals a total of 56,515 cars were delivered in the month of February and more than 33,000 of it were for export.

Tesla currently has factories on three continents - North America, Asia and Europe. The Berlin factory in Europe is the newest and ready to start production of Model Y vehicles.

In the initial days of the COVID-19 pandemic in 2020, CEO Elon Musk tried to resist the efforts of health regulators of California to keep the factory closed. Following seven weeks of the shutdown, he resumed production on 11 May 2020. The move invited controversies and legal actions against him. He later cited the issue as a primary reason to move headquarters away from Palo Alto, California. The company is now headquartered in Austin, Texas since late 2021.

China is currently reporting more than 20,000 Covid cases and the figure is the highest since the pandemic started in 2020. Shanghai has become a hot spot of the infection amid restrictions and lockdown in the city with respect to the zero-Covid policy of the government.

Until March, the daily cases were low with preventive measures like localized lockdowns, restrictions on international travel and mass testing. A spike is being witnessed lately with daily cases hitting thousands in the first week of April. Officials state a mutation of the Omicron variant has been detected near Shanghai. However, most cases are asymptomatic.

Quarantine facilities are increasing in the city of 25 million and people who tested positive are to follow strict virus protocols including separating children or babies from parents. Scenes of panic-buying were witnessed lately due to lockdown in phases. The lack of fresh food at shops has angered the residents.

Coronavirus was first detected in China in late 2019 in Wuhan city. The fresh outbreak is again putting a brake on the increasing economic growth of the country. It is a serious concern as factories are closed and people are forced to stay indoors.

About Tesla

Tesla was founded in July 2003 as Tesla Motors, Inc. by Marc Tarpenning and Martin Eberhard. The two served as CFO and CEO respectively. A few months later, Ian Wright joined as the third employee and about a year later the company raised a fund of $7.5 million. Elon Musk, the current CEO, contributed $6.5 million.

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