BEIJING, April 22 (TMTPOST)— In spite of supply chain woes from ongoing Covid-19 pandemic, Tesla CEO Elon Musk showed confidence in the reopening of Shanghai Gigafactory, a key production powerhouse of his company.
Source: Visual China
“Tesla Shanghai is coming back with a vengeance,” Musk said at the investor conference call earlier this week. “So I think notwithstanding new issues that arise, I think we will see record output per week from [Tesla"s factory in] Shanghai this quarter, albeit we are missing a couple of weeks."
Prior to the call, Tesla just beat Wall Street’s expectation both top and bottom line in the first quarter of the year. Its revenue surged 81% from a year earlier to $18.76 billion, topping the previous high made in the last quarter of 2021. It posted earnings per share (EPS) of $3.22, representing a robust 246% year-over-year growth, and set a new record for five quarters in a row.
Despite the shockingly excellent financial results, Tesla admitted severe impact of supply chain disruption. “Challenges around supply chain have remained persistent, and our team has been navigating through them for over a year. In addition to chip shortages, recent COVID-19 outbreaks have been weighing on our supply chain and factory operations,” the U.S.-based electric vehicle giant said in a statement.The company warned again, as the financial report for the fourth quarter, of the supply chain issues. “Our own factories have been running below capacity for several quarters as supply chain became the main limiting factor, which is likely to continue through the rest of 2022,” it said.
According to the statement, Shanghai plant’s weekly production rates were strong in the first quarter, but the Covid resurgence in Shanghai led to the temporary shutdown of the plant and parts of its supply chain.
Tesla China halted production in its Shanghai factory on March 28 and just get about 8,000 workers back a day before the financial results released. It was reported that the plant was operating in a closed-loop system, restricting the contact with the outside world, and each worker was provided a sleeping bag and mattress as they had to sleep at the factory as a result.
Tesla said Shanghai factory recently restarted limited production and the company will continue to monitor the situation closely. Musk estimated the about three-week shutdown had made Tesla lost weeks’ of capacity, but he noted “Chinese production issues seem well managed”. He forecasted Tesla’s overall output for the current quarter to be flat compared with the first quarter, and the next two quarters would see “substantially higher” outputs. His company is expected to produce more than 1.5 million vehicles this year, about 60% more than the annual delivery in 2021.
