The plant is expected to restart later this week after originally stopping for two days last month and again for one day earlier this week. It follows Shanghai being placed into a phased lockdown to curb a surge in COVID-19 cases that has turned it into China’s biggest virus hotspot. 

The Gigafactory near Shanghai was the first assembly plant outside Tesla’s home country of the United States. It made half of Tesla’s vehicles last year and had to suspend production for two days earlier this month. 

A report from Automotive News said the Shanghai factory was crucial for Tesla because China is its second-largest market and the plant builds cars for export to Europe and elsewhere in Asia, including all the Tesla Model 3s for Australia.

The China Passenger Car Association earlier this month reported that Tesla delivered 56,515 cars from the factory in February alone – 23,200 for the domestic market and 33,315 for export. Tesla in Australia last year sold north of 12,000 Model 3s.

Tesla is not alone. Factories operated by Toyota and Volkswagen in China’s Jilin have been shut down for weeks because of the COVID lockdown.

The restrictions come after China announced it was experiencing its worst COVID breakout since the initial 2019 outbreak in Wuhan. 

It reported 5550 locally-acquired cases on one day, leading authorities to lock down the tech hub of Shenzhen in the south earlier this month, while about 4000km to the north, the city of Jilin which borders Russia shut down on March 11 and then later sealed the entire province. 

The region, which is a major car-making area for manufacturers and suppliers, remains locked down.

Shanghai, which hosts the Chinese headquarters of many international companies and has the country’s largest port, has reported growing cases. It has now overtaken Jilin as the nation’s biggest COVID hot spot.

Automotive News said that the lockdowns in Shenzhen and now Shanghai, two of China’s most economically significant cities, show the growing toll – and challenge – of maintaining a zero-tolerance approach to the virus amid more transmissible variants. 

While most countries have started to live with COVID and accepted it as endemic, China maintains a strategy of closed borders, mandatory quarantines and mass testing.

Tesla said in a statement that it was “strictly implementing all related requirements, and arranging work according to the government’s policy at any time”.

Tesla CEO Elon Musk is on record as resisting health department orders in early 2020 to close the US factory because of the growing pandemic.

After about seven weeks of shutdown, he reopened the Fremont plant – Tesla’s only US plant at the time – on May 11, 2020, flouting county officials’ orders and daring authorities to arrest him.

He later blamed the dispute as one of the reasons he moved Tesla’s headquarters in late 2021 from Palo Alto, California to Austin, Texas.

Tesla now has auto plants on three continents: in North America, the original factory in California; in Shanghai; and in Europe, where Musk last week handed over the first made-in-Germany Model Y vehicles at his new factory outside Berlin. 

In a few weeks, Tesla will celebrate the opening of a fourth factory, in Austin, Texas.

Shanghai plant

By Neil Dowling