The timing of the reopening of Tesla, Inc.'s TSLA Giga Shanghai has been the talk of the town over the past few days. The unanimous thinking is that the shuttered plant will have a limited opening some time beginning this week.
What Happened: Even with a limited start as early as Monday, it would take at least until mid-May for Tesla to start producing at levels seen before the shutdown, prominent Apple analyst Ming-Chi Kuo said in a series of tweets on Twitter.
The TFI Securities analyst said production lines at Giga Shanghai will reopen on Monday at the earliest. Upon reopening, the plant will function with one shift as opposed to the two shifts ahead of the lockdown, he added. The job per hour (JPH) will therefore be reduced from 80-85 to 40-50. A 40-50 JPH would equate to 25,000-30,000 units of shipments per month, Kuo said. The analyst also delved into when normalcy will return.
"The schedule of JPH to return to above 80 depends on the epidemic control in the factory, the resumption schedule of suppliers, and the improvement of logistics," the analyst said.
Tesla's JPH at Giga Shanghai can return to above 80 by mid-May at the earliest, he added.
What Happened: With already three weeks of production lost due to the shutdown, reports suggested Tesla stands to lose about 500,000 units of production.
Now that Giga Shanghai is expected to operate only at half of its capacity at least until May, there could be a further hit to production. A shortage of components is another dark horse. The current component inventory level will be adequate to support another 2.5 weeks of production, Kuo said.
Bloomberg reported on Friday that Tesla will restart operations at Giga Shanghai on Sunday under the "closed loop production system." This would mean people called in to work will be made to stay on factory premises and will be regularly tested for COVID.
Related Link: How Tesla Stock Can Be Overvalued And Substantially Undervalued At the Same Time
Photo: Courtesy of Steve Jurvetson on Flickr
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