Slow return at Shanghai Gigafactory bad sign for Model Y in Australia

Tesla’s Shanghai gigafactory has recommenced production after an outbreak of Covid-19 in the major Chinese city caused it and numerous other companies to close.

But the re-opening will see just a third of its former output to begin with, posing yet another hurdle for the launch of the Model Y in Australia after high hopes were raised on the opening of Tesla’s Berlin factory.

Recent changes to the local Model Y order page as the EV maker apparently conducted testing saw one customer actually succeed in getting an order through, although this was later refunded by the company.

Videos of the reopening in Shanghia were circulated via Chinese media, and reposted by Tesla watcher Jay in Shanghai. According to his summary of the report, just one of three production shifts will operate.

“Tesla’s production capacity will be restored to the level of full production in a single shift in the next 3 or 4 days. The current inventory of vehicle parts is expected to meet the production capacity in about a week,” he said in a post.

Approval to reopen the factory after a three-week shutdown will see workers enter a “closed loop” system in which they will receive a sleeping bag, mattress, meals and an extra $A85 a day, it was reported by Bloomberg on Monday. The closed loop system is set to operate until May 1, 2022, according to Bloomberg.

Before the forced shutdown was implemented, Tesla’s Shanghai factory had been working around the clock, three shifts a day. It is thought the factory makes around 2,100 cars a day including the Model 3 electric sedan, and the Model Y electric crossover.

The shutdown also throws into question Tesla’s ability to achieve its production goals. As reported by Reuters, Credit Suisse has cut its predictions by 100,000 to 1.42 million cars for the entire year.

And though the EV maker has navigated the logistics and supply chain issues caused by the pandemic with successive earnings increases over the last seven quarters, there are also questions about whether the last quarter will deliver the same.

The EV maker is set to announce its first-quarter earnings on the morrow, and Refinitiv estimates indicate an expected drop in earnings.

In early April, Tesla reported another production and delivery record for the first quarter with 305,000 cars produced and 310,000 cars delivered globally.

In Australia, 4,417 Model 3 sedans were delivered in the first quarter as the EV maker shared its official local sales data for the first time.