Tesla Shanghai factory Q2 output may drop by a third compared with Q1

According to foreign media reports, productionat Tesla's Shanghai plantmay fall by more than a third this quarter compared with the first quarter, as the production interruption caused by the epidemic exceeds that of the company's CEO Elon Musk. expected.

The U.S. automaker is aiming to produce more than 71,000 vehicles at its Shanghai plant in June, according to an internal Tesla production memo seen by Reuters.Data from the China Passenger Car Association shows that in April and May of this year, Tesla’s Shanghai plant produced a total of 44,300 vehicles. In addition to the expected output in June, Tesla’s Shanghai plant’s output in the second quarter will reach about 11.53%. 10,000 vehicles.By comparison, Tesla's Shanghai plant produced 178,887 vehicles in the first quarter of this year.

Tesla did not immediately respond to a request for comment.

Image credit: Tesla

In April, Musk said on a conference call with analysts that Tesla’s Shanghai plant would produce“roughly the same, or maybe even a little bit higher” ofcars in the second quarter than in the first.

Obviously, Musk had good expectations when he said this.More recently, though, Musk has been warning of the risk of a recession.According to news site Electrek, Musk told employees it would be a very stressful quarter, as the temporary closure of the Shanghai factory, which has only just returned to full production, posed a major challenge.

Musk also said in an email to Tesla executives on June 2 that he had a "super bad feeling" about the economic situation in the U.S. and that Tesla needed to cut about 10% of its workforce.In a separate email to Tesla employees on June 3, Musk said Tesla would cut 10% of its salaried workforce due to "overstaffing in many areas," but that "hourly worker numbers will be reduced." will increase".But in another tweet that followed, Musk changed his mind andpredictedthat the company's headcount would increase over the next 12 months.

Tesla has managed to increase weekly production at its Shanghai factory to more than 90% of its pre-lockdown levels as Shanghai recently eased its containment measures, according to people familiar with the matter.Tesla's Shanghai plant plans to produce 17,000 vehicles a week starting June 13, when it plans to end a closed-loop production system that would allow workers to commute between home and the factory, according to an internal memo seen by Reuters.

Analysts warned that Tesla's gross margin of nearly 33% in the first quarter is unlikely to be replicated this quarter due to rising commodity costs and the temporary closure of its Shanghai factory.Tesla's shares have fallen by nearly a third since the start of the year.