Shanghai reopening: Tesla’s Chinese buyers face up to 24 weeks for delivery as carmaker scrambles to catch up with demand in ‘China’s Motown’

The waiting time for the entry-level Model 3 electric cars, priced at 279,900 yuan each, is between 20 and 24 weeks, according to Tesla’s website
The waiting time for the Model Y is between 10 and 14 weeks, Tesla said

Shanghai reopening

Daniel Renin Shanghai

Published: 7:30pm, 6 Jun 2022

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Tesla’s customers in China must wait up to six times longer for their favourite electric cars to be delivered, as the carmaker is still scrambling to restore output at Gigafactory 3 to full capacity, five days after Shanghai formally ended the city’s lockdowns.

The waiting time for the entry-level Model 3 electric cars, priced at 279,900 yuan (US$42,122) each, is between 20 and 24 weeks, according to Tesla’s website. The waiting period across all made-in-China models has stretched from the average three to four weeks last year to between 10 and 24 weeks, the carmaker said.

The longer wait underscores how Shanghai, dubbed China’s Motown for the city’s 11 per cent share of automobiles made last year in the world’s largest vehicle market, is struggling to repair the broken supply chains and production disruptions from two months of shutdown. That customers are willing to wait so long for a Model 3 or a Model Y shows how far Tesla’s competitors must go to snatch market share from the electric car industry’s bellwether brand.

“Tesla is still the first choice among Chinese fans of intelligent electric cars,” said Tian Maowei, a sales manager with Yiyou Auto Service in Shanghai. “The longer delivery time will not dent the buying interest of Tesla supporters.”

A view of Tesla’s Gigafactory 3 at the Lingang free trade area in Shanghai on May 13, 2021. Photo: Reuters.

The enthusiasm has been ignited by the Shanghai government’s largesse, where a 10,000-yuan subsidy is granted to every purchase of a so-called new energy vehicle (NEV) for replacing an automobile powered by the internal combustion engine (ICE).

The grant, part of a 60-billion yuan financial package of tax breaks, incentives and subsidies, also applies to plug-in hybrid cars and hydrogen fuel-cell vehicles. The government is anxious to protect jobs and bolster consumption in an industry that hires one in six urban jobs.

‘Just in time’ morphs into ‘just in case’ as Covid-19 cuts supply chains

Some local authorities have gone a step further. Jiading district in northern Shanghai said the owner of a petrol-guzzling vehicle would receive 20,000 yuan for replacing it with an NEV priced above 150,000 yuan.

Tesla does not publish monthly sales in China, nor does it reveal the number of orders it receives. In April, Tesla delivered only 1,500 vehicles to Chinese customers, about 98 per cent fewer than a month earlier, according to data provided by the China Passenger Car Association (CPCA).

The US carmaker, a bellwether of China’s EV sector, is ramping up manufacturing at the Giga Shanghai, its global export hub, after losing about 50,000 units in production it idled assembly from March 28 to April 18. Giga Shanghai did not restore production to pre-Covid levels until May 26, churning out about 2,600 vehicles everyday.

Tesla’s Model 3 sedan sits in a near-empty lot at a Tesla dealership in Littleton, Colorado on June 27, 2021. Photo: AP

The two-month shutdown of Shanghai that ended on May 31 due to the Covid-19 outbreak strained the automotive supply chain even after Tesla resumed production under a “closed loop” system – workers essentially sleeping on-site to avoid contact with outsiders. The waiting period for the Model Y is between 10 and 14 weeks, Tesla said.

“Investment in Giga Shanghai will increase as [Tesla] faces pressure to churn out more vehicles in mainland China for export,” said Gao Shen, an independent analyst in Shanghai. “Tesla will expand capacity here very soon.”

In early May, Tesla said it would add a second assembly line near the Shanghai Gigafactory to add 450,000 units of annual capacity.

The Shanghai-based factory is still operating in a “closed loop,” even after Shanghai lifted the citywide lockdown on June 1, because city officials remained wary of a resurgence of the outbreak and required large manufacturers to continue operations in the bubbles.

Shanghai health authorities said another three community infections were spotted on Monday, taking the total to 16 since the city reopened on June 1.