Tesla Confirms Shanghai Gigafactory Shutdown, But Says It's All 'According To Plan'

Tesla Inc. TSLA on Thursday confirmed that its Shanghai Gigafactory is currently shut down for production, the Nikkei Asian Review reported on Friday (Tokyo time).

What Happened

The electric vehicle maker however denied earlier reports that suggested the closure was due to a "component shortage" that the manufacturing plant was facing.

"Tesla Shanghai is adjusting to normal production due to test run[s] and maintenance of production lines that were carried out during the recent holidays," Tesla said in a statement, according to the Nikkei. "All work is being executed according to plan."

Bloomberg earlier reported that following a five days long public holiday in China starting May 1, workers at the Shanghai plant were asked to extend the break until May 9.

Why It Matters

The Chinese gigafactory was the sole Tesla plant that was still seeing manufacturing, as the automaker's facilities in the United States remain shut due to shelter in place orders imposed to curb the novel coronavirus (COVID-19) pandemic.

Analysts deem Tesla's Shanghai plant to be critical in getting in near to its touted production target of 500,000 units for the year 2020.

Tesla is also reportedly looking to restart production at its Fremont factory on Friday through next week in a phased manner.

TSLA Stock Price

The company's shares closed 0.32% lower at $780.04 on Thursday and traded 0.4% higher in the after-hours at $783.50.

Photo courtesy of Tesla.