May 20, 2024


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Parts Shortage Causes Tesla to Halt Shanghai Production

3 min read


Tesla’s been on a strong run lately, including setting new sales and financial records in the first quarter, but it’s hit a snag. The EV maker’s running short of parts at its Shanghai gigafactory, forcing production to grind to a near halt.

Model Y production Shanghai
Tesla’s been forced to basically stop production at its Shanghai gigafactory due to a parts shortage.

The problem, first reported by Reuters, comes as the company’s been forced to deal with weeks of COVID-related shutdowns hampering its ability to build vehicles — and for people to buy them. Tesla’s sales fell 98% last month, according to the China Passenger Car Association.

The company produced 10,757 vehicles last month, but sold just 1,512, the group noted. On top of that, it didn’t export any vehicles last month. Shanghai had been producing vehicles for its markets in Asia, but also bolstering its European operations until the company opening its plant in Germany earlier this year.

The Shanghai plant already faced a three-week closure starting in late March, and was just ramping production back up, according to Reuters. Tesla planned to produce less than 200 vehicles daily, which is well below the 1,200 it was producing after it recently reopened in mid-April.

The company’s not alone in its struggles, as auto sales fell 48% in April due to the lockdowns, which closed plants and kept potential buyers home. With the shutdowns continuing, Tesla looks to be facing a struggle for several more weeks.

Problems at home too

Tesla Gigafactory Shanghai
The Tesla vehicles built at its Shanghai plant and shipped to Australia and parts of Europe.

The Shanghai shutdown is problematic, but not the company’s only issue right now as it just announced it is recalling 130,000 vehicles in the U.S. due to problems with the center touchscreens, Reuters noted.

Affected vehicles include 2021 and 2022 Model S and X vehicles as well as Model 3s and Model Ys from 2022. Fortunately, the repair will be conducted with an over-the-air update, according to the National Highway Traffic Safety Administration.

The CPUs for the infotainment system may overheat. This may prevent the center touchscreen from displaying the feed from the rearview camera, warnings lights and other information important to the driver.

Tesla officials say they are unaware of any injuries or deaths related to the problem, but they have received 59 warranty claims and 59 field reports about it. The company’s had a history of problems with its touchscreens, including just about two weeks ago when it recalled 48,000 Model 3 Performance sedans because when in Track Mode, the speedometer didn’t always get displayed. The company resolved that with an OTA update as well.

Tesla Sentry Mode view
Tesla’s touchscreen CPU can get hot enough to prevent it displaying the rearview camera feed, warnings lights and other information.

More touchscreen issues

In February 2021, Tesla recalled nearly 135,000 Model S and X vehicles due to the touchscreens simply shutting down and failing to operate. 

The problem had been widely reported by owners and Tesla was making free repairs on an ad hoc basis, but that didn’t satisfy NHTSA, which felt that the screens should be replaced before they fail, avoiding the chance that drivers would be left at risk.

The safety agency has been looking into the touchscreen problem since June 2020 — upgrading the probe in November after receiving 12,523 reports related to the problem.

It took the unusual step of requesting a recall in a letter sent to the EV manufacturer on Jan. 13. That followed discussed between Tesla and NHTSA officials, including a presentation that, regulators said, “confirmed that all units will inevitably fail.”

What has become known as the “eMMC failure” issue involves the displays that are ubiquitous in all Tesla vehicles but, in particular, those used by 2012-2018 Model S sedans and 2016-2018 Model X SUVs. They rely on NVIDIA processors and an 8 gigabyte flash memory device known as an eMMC NAND. The memory systems have a limited capacity and lifecycle. Once exceeded, they fail, taking down the Tesla display screen.


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