May 25, 2022

Tesla is closing its Gigafactory in Shanghai for the second time this month due to a surge in local COVID-19 cases. Volkswagen and General Motors said on Monday that their operations in Shanghai were unaffected.

Tesla’s 24-hour factory has suspended production for four days starting Monday as Shanghai remains closed. The automaker closed the plant for two days in mid-March due to a resurgence of the virus there.

Gigafactory Shanghai, the world’s largest electric vehicle factory, produces about 2,000 vehicles a day, mainly Model YS and Model 3S for Chinese consumers and the automaker’s important European markets, including Germany and Japan. Combined with global supply chain rigidity, the shutdown could thwart Tesla’s recently announced Part 3 master plan, which CEO Elon Musk tweeted and discussed the automaker’s strategy to scale “extreme” dimensions.

Most of the new cases of the virus in China are in Shanghai, with most cases asymptomatic. On Monday, local authorities began a two-stage quarantine to conduct mass testing. The plant is located in the area affected by the first phase of the lockdown, which will last until Friday.

On March 15, Tesla opened its first $5 billion European plant in Berlin.

Tesla also announced Monday in a filing with the U.S. Securities and Exchange Commission that it plans to split its shares to pay dividends to shareholders. The company plans to submit a proposal to the annual shareholders’ meeting to “permit a split of the company’s common stock in the form of share dividends…to increase the number of shares of common stock permitted.”

The company last distributed its shares from 5 to 1 in August 2020.

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