Elon Musk at the GPU Technology Conference in 2015. (Source: Flickr)

China’s Covid Rules Slow Down Production at Tesla’s 3 Gigafactories

The whole thing about Elon Musk trying to purchase Twitter is a great headline grabber. But there are some signs that washingtonpost.com says are showing Musk is having some problems in China where he runs his Gigafactory. Mainly the article covers a lot of twists and turns than keep Musk on his toes and much of the world’s attention focused on him.

Tesla’s Shanghai “Gigafactory,” where it makes some of its electric sedans and crossover SUVs, has been shuttered for weeks as a result of China’s “zero covid” policy. Additionally, Tesla a standard charging cable with its cars, a move that hints at possible supply chain woes — and amounts to what analysts are calling a backdoor price increase.

The company recently announced it would not be including charging cables with its new cars, prompting an outcry from even Musk’s most fervent supporters. Eagle-eyed followers of the company noted that the $400 component was axed from new car purchases and could not be bought on Tesla’s website because it was sold out.

Really? A $200 price hike for a part that was once included in the price. Only Musk could take a problem and begin to make more money.

Analysts and investors have expressed concern that Musk is stretched too thin — not only by the demands of Tesla, which has opened multiple new factories in recent weeks but other responsibilities as CEO of rocket builder SpaceX and several smaller companies. If he succeeds in his bid to buy Twitter, Musk will have a historic, and largely unprecedented, catalog of tech companies under his helm even after questioning last year how long he could keep up with overflowing demands.

On one hand, it is hard not to root for such a dynamic entrepreneur.  But when you add in the number of government loans and tax breaks he receives it seems like it may have gone to his head. And now even supply chain problems have found him somewhat vulnerable.

Musk and Tesla did not respond to requests for comment. Musk praised Tesla’s performance despite the challenges in a tweet this month. He tweeted on Wednesday he would be on the earnings call.

“This was an *exceptionally* difficult quarter due to supply chain interruptions & China zero Covid policy,” he wrote earlier this month. “Outstanding work by Tesla team & key suppliers saved the day.”

Already Tesla buyers are waiting in some places for more than six months to get their new vehicles, analysts said. Those wait times could remain as the China closure could cut into Tesla’s production by as many as 50,000 vehicles in the next quarter.

Tesla’s China production halt began in late March. Reuters reported Tuesday that the factory had reopened, citing Xinhua News Agency, though Reuters reported a day earlier that a reopening would initially be in a limited capacity with one shift — and workers would have to live on-site. Musk liked a tweet on Wednesday showing a report from Xinhua that said the factory had reopened.

So between his Twitter battles and his supply chain problems that may or may not exist, the article provides more of Musk’s take on it all. And as always he does not disappoint when it comes to addressing any problems with his amazingly positive approach to the many successful businesses he owns.

read more at washingtonpost.com