Tesla Shanghai Gigafactory Photo: Courtesy of Tesla

As production at Tesla's Shanghai Gigafactory is challenged after COVID-19 infections have been found at one of its major suppliers, local authorities are moving to accelerate work resumption and ensure a quick restoration of the whole industry chain.

Reuters reported that Aptiv, Tesla's supplier of wire harnesses, stopped shipping from a Shanghai plant that supplies Tesla after coronavirus infections were detected among its workers.

The company confirmed to the Global Times on Tuesday the emergence of the cases at the plant but it didn't say whether Tesla's production will be affected.

One of Aptiv's plants in Shanghai, which makes wiring harnesses, has halted production temporarily in compliance with the government's guidance, the company said. "We have been in touch with our customers, [and] are working closely with them to mitigate the impact," it said.

Tesla declined to comment when reached by the Global Times on Tuesday. Production at the factory has gradually resumed since April 19.

A Shanghai-based company that supplies electronic components to Tesla, which declined to be identified, told the Global Times on Tuesday that for the safety of workers, it's common practice in the whole industry chain that if COVID-19 infections are found, production within the chain has to be halted. 

"So, we conduct nucleic acid tests and antibody tests for our workers every day to ensure production resumption," said the company. Operations are normal now, although capacity has not fully restored.

Despite the headwinds of COVID-19 flare-ups, Tesla's Shanghai factory delivered 1,512 vehicles in April, the China Passenger Car Association (CPCA) said in a report released on Tuesday. In the first four months of the year, the factory sold 183,686 cars globally, over 1.7 times the amount sold for the same period last year.

Tesla is confident in China's development, and the epidemic is only a temporary challenge, Vice President Tao Lin was quoted as saying in a press release sent to the Global Times. "We've also seen the ability of all walks of life to cope with challenges from the process of resumption of work, and believe that [production] will soon return to normal."

Amid complex internal and external environments, "we need to ensure the establishment of a unified national market to cement the advantages of China's auto manufacturing industry with Shanghai as the hub, and to effectively prove our capability in ensuring international supply", said CPCA.

To help factories resume production, China has rolled out measures to remove logistics congestion and smooth the supply chain.

The authorities created a "whitelist" of leading enterprises to this end, and they are streamlining logistics for companies working in key sectors such as automobiles and integrated circuits, according to the Ministry of Industry and Information Technology (MIIT).

In order to support the smooth production of key enterprises in Shanghai, three nearby provinces have set up a special work group to coordinate the production and supply of upstream and downstream enterprises to ensure smooth intra-provincial transport of components and raw materials.

A Tesla supplier based in East China's Jiangsu Province told the Global Times on Tuesday that he is waiting for logistics improvement in the Yangtze River Delta region - including Shanghai, East China's Jiangsu, Zhejiang and Anhui provinces - so that he could conveniently supply components to Tesla.

According to the supplier, the logistics fee for a large truck has skyrocketed to about 10,000 yuan ($1,489) from around 2,000 yuan.

Despite uncertainties and challenges for work resumption in the automobile industry in the Yangtze River Delta region, manufacturers are expected to achieve normal production by June and make up for the losses in the second half of the year, an industry analyst told the Global Times recently.

Major companies in the automobile sector in Shanghai are also accelerating work resumption to make up for lost production and drive the recovery of the whole industry chain.

CATL, the world's largest battery maker, told the Global Times that more than 1,000 workers at its Shanghai factory have returned to their posts, accounting for 90 percent of its total staff, and production capacity has returned to the level before the latest outbreak.

The factory in Shanghai is CATL's third-largest production base in the world, mainly manufacturing power battery modules. It's located in Lingang, near Tesla's Shanghai Gigafactory. In 2021, Tesla was the largest client for the company's power battery products.