Shanghai carmakers resume output but port still congested

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Elon Musk told analysts in a call he is looking to produce 1.5 million vehicles this year. Photo from Unsplash.
  • Shanghai carmakers resume output but port still congested
  • SAIC and Tesla at the forefront of production resumption in Shanghai’s car industry, with Tesla’s Elon Musk predicting the Shanghai plant will make 1.5 million cars this year
  • Even as factories restart, Shanghai’s supply chain remains at a standstill, with an estimated 470 to more than 500 ships waiting to dock at the ports
  • A record 38 deaths were reported on April 24 from Omicron infection

Shanghai carmakers have geared up against the pandemic as they resumed production with two leading producers, SAIC Motor and Tesla, ramping up production to make up for their factory closures amid a wave of infections.

Li Feng, vice-governor of the Jiading district, was quoted in a Xinhua report on Sunday (April 24) as saying most of the district’s 125 manufacturing companies are located in Jiading. He said 97 of them are in involved in the car manufacturing.

Western news reports and industry observers, however, said Shanghai’s supply chain remains at a standstill. Visual Capitalist published satellite images showing the growing number of cargo ships anchored in waters outside the ports.

Satellite Maps: Shanghai’s Supply Chain Standstill

As of April 19, more than 470 vessels were still waiting to deliver goods to China. Loadstar said the number had increased to 506 on April 22 due to about 90% of trucks that support import and export activities being offline, causing longer dwell time for containers at port.

Li said, however, that several key players in the industrial and supply chains have restored their operations to ensure the smooth flow of production materials along the industrial chain SAIC Motor.

About 70% of Shanghai’s 666 key enterprises have now resumed operations, with their capacity utilization continuing to rise, city officials said last week.

Reports said vehicles at the SAIC and Tesla plants are continuously rolling off the production lines. Their renewed production has restarted activity at manufacturers of related parts and components.

Enterprises have categorized their staff returning to work according to their COVID-19 risk profile and limited their contact with other groups of workers, said Li.

The city’s health authorities have required production and living materials entering the factories to be subject to strict disinfection and are transported without contact between people. All enterprises are also required to draft emergency plans and set aside quarantine rooms in case of emergencies.

Last week, Tesla chief executive Elon Musk told analysts in a call he is looking to produce 1.5 million vehicles this year and over 50% growth over 2021 numbers, as the Shanghai factory has resumed production “at fairly high levels” after a month-long COVID-related closure.

Musk said that with a lot of important days for build volume out of Shanghai, he expects production in the second quarter to be roughly similar to the first quarter.

“Giga Shanghai is coming back with a vengeance. I think we will see record output per week from Giga Shanghai this quarter, albeit missing a couple of weeks,” Musk said.

He added production has also resumed among Tesla’s suppliers, which should drive a substantially higher output for the third and fourth quarters. “So, it seems likely that we’ll be able to produce over 1.5 million cars this year,” he added.

On the COVID-19 front, a record were 39 deaths reported on April 24 from the Omicron infection as Vice-Premier Sun Chunlan called for timely treatment of patients.

A total of 21,058 new cases were recorded in Shanghai in the last 24 hours, 10% fewer than on Saturday.

Beijing, meanwhile, added 13 new cases as of 4pm on Sunday, which raised the total number of infections in the nation’s capital to 41 in the latest outbreak. Local health officials said the virus had been spreading undetected in the city for about a week.