Monday, July 22, 2024

EVs manufacturers in China may be forced to suspend production next month

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Automakers in China may have to suspend production in May if suppliers in Shanghai and beyond are unable to resume work, said electric carmaker Xpeng chief executive He Xiaopeng. Widespread lockdowns to stop the spread of Covid-19 in China are “clogging” roads and ports and closing many factories.

Quoted from Reuters on Saturday (4/16/2022), several Chinese authorities are trying to resolve the situation, He said on his personal Wechat feed seen by Reuters. He said he hoped more government departments would provide support.

His comments were echoed by Huawei Consumer Business Group CEO Richard Yu who also warned of the huge economic costs if the factory in Shanghai was unable to resume production. Yu said all technology and industrial companies should stop production in May if their suppliers are in Shanghai, according to an official Securities Times report, Friday (15/4/2022).

Sales in the world’s biggest auto market plunged in March due to Covid-19 restrictions. Tesla Inc is among the automakers feeling the pain of production curbs.

The US automaker has suspended production at its Shanghai plant since March 28. That has led to an output loss of more than 40,000 units, according to Reuters calculations.

The manufacturing center in Shanghai makes 10,000 Model Ys and 6,000 Model 3s a week, said a person familiar with the matter. Nio also stopped production at the Hefei plant because suppliers from other regions had stopped working.

Meanwhile automakers with production facilities in China’s northeastern province have resumed production. State-owned Chinese automaker FAW Group has restarted some production at its Hongqi plant in Jilin, while BMW said all of its factories in the city of Shenyang restarted operations on Thursday.

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