Gigafactory Shanghai is now the only Tesla production facility making cars following a full-scale shutdown of its factories in California and New York alongside continued job cuts at its Nevada factory, as Covid-19 infections in the US continue to escalate.
Why it matters: Giga Shanghai resumed operations in early February with support from the Chinese government. It has been relatively insulated from the pandemic and its contribution to the company’s annual target of 500,000 cars is expected to rise as a result.
Details: Tesla is slashing jobs for hundreds of contract workers in its vehicle plant in Fremont, Calif. and the Gigafactory factory near Reno, Nev., according to a CNBC report on Friday citing people familiar with the matter.
- Giga Nevada makes battery packs and energy storage products in partnership with Panasonic, and reportedly began layoffs last month which will amount to 75% of its staff. Meanwhile, its Japanese partner had shut down its own operations at the plant.
- Tesla temporarily closed its Fremont factory and Giga New York starting March 24 under pressure from local authorities. Four of its employees have tested positive for the novel coronavirus—two in California and one each in New York and Nevada.
- The US EV giant temporarily shut its Shanghai facility for two weeks beginning in late January as required by regulators amid a nationwide lockdown, but reopened on Feb. 10, supported by local governments.
- Giga Shanghai had recovered to a production level of about 3,000 cars per week in late March and is ramping up for annual output goal of 150,000 cars this year, a Tesla executive said to Chinese media. Preparation for Model Y production in China is also underway.
- Tesla was not immediately available for comment on Tuesday.
Context: Tesla on Thursday reported its best-ever first quarter deliveries of 88,400 cars, thanks to earlier-than-planned delivery of its Model Y vehicles in the US and accelerated production ramp-up in its Shanghai facility.
- “Our Shanghai factory continued to achieve record levels of production, despite significant setbacks,” the company said in the announcement. Details in sales by region were not revealed.
- China accounts for around 10% of its total deliveries in the first quarter, according to estimates in Chinese media reports. In January, 3,563 Tesla electric vehicles were registered in China, followed by 2,314 car registrations in February, figures from state-backed China Automotive Information Net showed.
- The company said it expected to “comfortably” deliver more than 500,000 vehicles this year during its fourth quarter earnings call in late January. It has not revised its earnings guidance despite effects from the COVID-19 pandemic.