Tesla halts production at Shanghai plant

SHANGHAI, Dec 24 (Reuters) – Tesla halted production at its Shanghai plant on Saturday, according to an internal notice and two people familiar with the matter, bringing forward a previous plan to halt most work at the plant in the last week of December.

The U.S. automaker canceled the morning shift and told all workers at its most productive production center they could start their break, the people said, and the announcement seen by Reuters. The company did not give a reason.

Reuters reported earlier this month that the electric car giant plans to stop Model Y production at the plant from December 25 to January 1.

The suspension comes amid a rising wave of infections after China eased its zero-covid policy earlier this month, a drastic move welcomed by businesses and the public, but very disturbing business operations in the short term.

One of the people said workers at Tesla and its suppliers have also been sickened as part of the wave, challenging operations over the past week.

Tesla is also struggling with elevated inventory levels as its second-largest market braces for a downturn.

The Shanghai plant has been focused on producing export models for the past week, the person added.

A Tesla China media representative did not immediately respond to a request for comment.

The shutdown at the Model Y assembly plant at the end of the month will be part of a planned production cut of about 30 percent this month for the model, Tesla’s best-selling model, at its Shanghai factory, Reuters reported.

The Shanghai factory, the most important production center for Elon Musk’s electric vehicle company, maintained normal operations in the last week of December last year.

It is not an established practice for the plant to stop for rest at the end of the year.

Reporting by Zhang Yang and Brenda Guo; Editing by Andrew Cawthorne

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