Tesla to keep Giga Shanghai workers in closed-loop setup even as Covid lockdowns end

Tesla China is planning to keep its workers at Gigafactory Shanghai isolated, even as authorities ease movement restrictions for residents in low-risk parts of the city. Tesla Giga Shanghai’s workers would be staying in a closed-loop system until June 10, 2022. 

Despite the city’s stringent Covid lockdowns, Tesla has been able to resume partial vehicle production at Giga Shanghai, which halted operations for about three weeks from late March to April. Workers that have since been brought back to their posts have been isolated and housed in disused factories and an old military camp as part of a “closed-loop” system. 

Yet, according to people familiar with the matter, Tesla has informed the more than 10,000 employees currently working at Giga Shanghai to be prepared to stay in a closed-loop system until June 10. This is being done so that the company can have a 10-day buffer to ensure the plant’s vehicle production stability, according to a Bloomberg News report. 

Tesla is not alone in its decision to keep its workers in a closed-loop setup despite Shanghai’s efforts to lift its Covid lockdowns. An internal notice from Volkswagen’s Shanghai factory, which is operated with local partner SAIC Motor, has reportedly told employees that the facility will stay in a closed loop system until June 10 as well. 

Tesla China has not issued a comment about the topic so far. A spokesperson for Volkswagen, on the other hand, has stated that “SAIC-VW is still under a closed-loop production system, and will further adjust production plans based on relevant policies.”

Shanghai’s strict Covid lockdowns have adversely affected the country’s economy, and companies that operate facilities in the city have taken massive blows as a result. Tesla’s Giga Shanghai, for example, is estimated to have lost about 40,000 vehicles’ worth of production due to the facility’s three-week halt. 

Elon Musk remains optimistic about Giga Shanghai’s potential this second quarter, however, with the Tesla CEO stating that the China-based facility will be coming back with a vengeance. Recent videos of Giga Shanghai’s operations suggest that Musk’s words may be accurate, as the factory has since returned to its role of being the company’s primary vehicle export hub, providing Model 3 and Model Y to foreign territories.