Tesla Shutters Shanghai Gigafactory Amidst COVID19 Outbreak

Tesla has shuttered its Shanghai Gigafactory as another variant of the coronavirus starts to inflict the Chinese city of Shanghai. China has already imposed containment in the city of Shenzhen after another spike which has seen more cases in 2022 than the entirety of 2021.

Tesla announced that its employees and suppliers would be shutting down production on Wednesday and Thursday at the Gigafactory in Shanghai something which Reuters has reported.

"Electric vehicle giant Tesla is suspending production at its Shanghai factory for two days, according to a notice sent internally and to suppliers, as China tightens COVID restrictions to curb the country's latest outbreak," said the Reuters report.

Tesla Model Y render

The gigafactory in Shanghai is arguably the most important production facility Tesla has. It serves the critical Chinese market and was also supporting its European and American operations. It is one of the main hubs for the manufacturing of the Tesla Model 3 and Tesla Model Y, especially for the European market, but the impact of this shutdown could be padded as the Berlin gigafactory has gone live while the new Texas gigafactory has also been activated.

Tesla is not the only major manufacturer which has been forced to shutter its operations in China as Toyota and Volkswagen have joined it as well. Tesla, however, hasn't confirmed if the shutdowns are related to the latest surge in COVID19 in China. There could also be supply chain issues.