Tesla suspends manufacturing at its Shanghai facility

According to an internal notice and two people with knowledge of the situation, Tesla ceased car production at its Shanghai plant. Before the end of December, when most work at the plant was supposed to cease, this occurred.

The U.S. automaker cancelled the morning shift and told all workers at its most productive manufacturing hub they could start their break, according to the people and the notice seen by Reuters. The EV maker did not give a reason.

It was reported earlier this month that the company that makes electric cars would stop making Model Y at the plant from December 25, 2022, to January 1, 2023.

The suspension coincides with a rising wave of infections after China eased its "zero-COVID" policy earlier this month, a sudden move that was welcomed by businesses and the general public but ruthlessly disrupted business operations in the short-term.

One of the people said that Tesla employees and suppliers have also been sick in the past week, which is making it hard to run the business.

As its second-biggest market gets ready for a slowdown, Tesla also has to deal with a lot of extra inventory.

In the past week, the Shanghai plant has prioritized the production of models for export, the source added.

As part of a 30% cut in planned production of Tesla's best-selling model for the month, the Shanghai factory will stop putting together Model Y at the end of the month.