Tesla Inc. announced to suspend production at its Shanghai factory until Thursday after the financial hub imposed tighter COVID-19 restrictions.
The leading automaker initially attempted to create a closed-loop to continue its outputs. However, the company needed to comply with the government protocols.
Tesla has notified its workers and suppliers of the move on Sunday, allowing them to leave that evening.
The Chinese city said it would enforce a lockdown in two stages to carry out mass testing for coronavirus. Accordingly, it is the most enormous pandemic disruption to hit the region so far.
The local authorities explained that they would divide Shanghai in two for the exercise. They would use the Huangpu River that passes through the city as a guide.
The announcement also reflects a turnaround for the local government. Last week, officials denied that the financial hub would implement a lockdown.
Subsequently, China reported 6,886 domestic COVID-19 cases nationwide on Tuesday. Then, more than 4,400 of them were in Shanghai, the center of the country’s worst outbreak.
The Tesla factory is in the Lingang district of the Pudong new area. The location is part of the first lockdown stage. The isolation started early on Monday and could last until Friday morning.
In mid-March, the business had already halted production at the Shanghai facility for two days. This decision came after the city rolled out strict movement controls and mass testing.
The plant manufactures vehicles for the Chinese market. At the same time, it is a crucial export hub to Germany and Japan.
Last month, the company delivered 56,515 vehicles from the area. This includes 33,315 for export and amounts to an average of 2,018 cars per day.
Tesla joins mega-cap stock-splits
Moreover, Tesla also announced its plans to split its stock, joining a recent wave of mega-cap companies splitting their shares.
In a filing, the EV maker said it would hold a vote at its upcoming annual shareholder meeting. It aims to increase the number of authorized shares to enable a stock split.
The potential share division would be the electric car maker’s second since 2020.
Consequently, Apple, Nvidia, and Tesla have split their shares in the past two years. Likewise, Amazon and Google-parent Alphabet have recently announced upcoming share splits.
Major firms increase the number of their outstanding in making their stock prices appear less expensive to investors.
Tesla’s stock soared 8.03% or 81.20 points to $1,091.84 per share on Monday’s regular trading. In the after-hours market, it rose 0.36% or 3.96 points to $1,095.80 per share.