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Spokane, Washington  Est. May 19, 1883

Tesla’s China production roars back with output tripling

Tesla vehicles waiting for shipping transport are shown in a large lot near the Waigaoqiao Container Port in Shanghai on June 3, 2022.   (Bloomberg )

Tesla has staged a remarkable comeback in terms of its production in China, with May output more than tripling despite the electric carmaker only recently getting its Shanghai factory back up to speed after the city’s punishing lockdowns.

The U.S.-headquartered electric vehicle maker produced 33,544 cars from its Shanghai plant last month, versus 10,757 in April, China Passenger Car Association data released Thursday showed.

Shipments came in at 32,165 units, with 22,340 of those cars exported to markets in Europe and the rest of Asia, and 9,825 of the vehicles going to domestic buyers.

Tesla has gone to extraordinary lengths to keep its factory in China up and running during Shanghai’s months-long lockdown to eliminate the spread of Covid-19.

The facility, which is capable of making 2,100 cars a day in normal times, was shut for three weeks through mid April and staff were only recently able to resume double shifts, working around the clock in an elaborate so-called closed loop system.

Even so, EVs produced in May were still only about 50% of what Tesla’s China plant does in a regular month when operations are running as normal.

March shipments were 65,814, for instance, and as high as almost 71,000 in December.

Tesla’s shares climbed 2.6% at 9:56 a.m. in New York. The stock fell 31% this year through Wednesday’s close.

Overall, passenger vehicle sales in China fell 17.3% year-on-year to 1.37 million units in May, PCA data show.

Month-on-month, sales rose 29.1%, not a surprise considering the dearth of activity in April.

New-energy vehicle retail sales jumped 91.2% from May 2021 to 360,000 units.

BYD Co., the automaker backed by Warren Buffett, led NEV sales with 114,183 units.

“The industry has witnessed a strong improvement in its supply chain under the current policy of ensuring production in Changchun and Shanghai,” PCA Secretary General Cui Dongshu said during a briefing Thursday.

The PCA expects a continued rebound in June, given the pandemic has eased and vehicle production and sales are recovering.

Both car production and sales should increase more than 10% in June versus 2021, the association said.

Beijing has introduced several consumer incentives around automobiles to offset the negative impact from China’s stringent pandemic control policies and waning economy growth.

The purchase tax levied on some low-emission passenger vehicles has been cut by half, and local authorities and automakers have followed with a string of incentives of their own.

“Steadily increasing car consumption will play a significant role in driving the recovery of overall consumption and maintaining the sustainable development of the auto industry,” Sheng Qiuping, a deputy commerce minister said at a briefing held in Beijing last month.