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Tesla suspends production at Shanghai plant to implement upgrade

In this photo released by China’s Xinhua News Agency, Tesla vehicles are seen on an assembly line at Tesla’s gigafactory in Shanghai, Tuesday, Jan. 7, 2020. Tesla’s Shanghai factory delivered its first cars to customers Monday, and chief executive Elon Musk said the electric automaker plans to set up a design center in China to create a model for worldwide sales. (Ding Ting/Xinhua via G3 Box News) Ding Ting/G3 Box News

Tesla suspends production at Shanghai plant to implement upgrade

Christopher Hutton

June 23, 08:30 AM June 23, 08:30 AM

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Tesla has brought one of its major China-based factories to a standstill while it implements an internal upgrade.

Tesla Giga Shanghai, the 210-acre factory in China, has shut down for two weeks to upgrade the site, according to an internal memo viewed by Reuters. The upgrade comes after a two-month delay due to Shanghai authorities’ decision to lock the city down to quell a COVID-19 outbreak.

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It’s unclear what the upgrade will include. However, once it is finished, it will allegedly help boost the plant’s output to record highs by the end of July. It will also help the factory move toward its goals of producing 22,000 vehicles per week, according to Tesla’s memo.

The factory has consistently produced 17,000 Model 3 and Model Y cars per week since mid-June. The company attempted to maintain production levels amid the Shanghai lockdown by having workers sleep on-site rather than leave or go home. However, its production declined significantly as supply lines slowed down.

“Our constraints are much more in raw materials and being able to scale up production,” Musk said during his Tuesday appearance at the Qatar Economic Forum.

Not all of Tesla’s factories have succeeded, however. The company’s recently opened plants in Germany and Texas have been “gigantic money furnaces,” Musk said in a May 30 interview at a Tesla owner’s club.

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“Overwhelmingly, our concern is, how do we keep the factories operating so we can pay people and not go bankrupt?” Musk said.

These upgrades also come as Musk considers laying off up to 10% of his Tesla workforce due to having a “bad feeling” about the economy. The layoffs have already led to one lawsuit in the United States alleging that Musk breached labor laws through his layoffs.

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