SHANGHAI, Apr 18(SMM) - Since the outbreak of COVID-19 in 2020, the new energy vehicle industry chain has encountered challenges such as chip shortages and soaring raw material prices. Shanghai is now experiencing a new wave of COVID-19 at a time when the above-mentioned problems have not been solved, which has once again exacerbated the vulnerability of the supply chain. Under the impact of the pandemic, highway transportation in Shanghai and surrounding areas has been greatly restricted. A large number of new energy vehicle manufacturers have been forced to suspend production due to disrupted supply of core components.
In addition to international auto giants, Shanghai also gathers many new energy vehicle parts suppliers such as CATL, Joyson Electronics, and Horizon. Since the Tesla Gigafactory settled in Shanghai, it has attracted a large number of upstream suppliers, which coupled with policy support, has mde Shanghai and the Yangtze River Delta region the centre of the development of the new energy vehicle industry.
In order to effectively promote the resumption of work and production of enterprises and ensure the safety and stability of the supply chain, Shanghai issued the Guidelines for the Resumption of Work and Production of Industrial Enterprises in Shanghai (First Edition) and Work Plan for Guaranteed Transshipment for Key Enterprises (Trial) on the evening of April 16. The work plan covers 666 key enterprises. The list of enterprises who are allowed to resume production and work cover key industries such as automobile manufacturing, biomedicine, integrated circuits, and equipment manufacturing. The number of vehicle makers and auto parts suppliers account for more than 35% of companies in the white list.
The followings are some of the leading auto companies in the white list. Tesla: Its Shanghai Gigafactory has a production capacity of 450,000 vehicles in 2021, accounting for 50% of global production capacity. The shutdown continued for 3 weeks from March 28, and closed-loop production resumed on April 18.
SAIC Volkswagen: Its production base in Anting, Shanghai has an annual production capacity of 1.28 million vehicles in 2021, accounting for about 44% of the company’s total capacity. It suspended production for more than 2 weeks from March 31 and organized a stress test for resumption of work and production on April 18.
SAIC-GM: Its production base in Jinqiao, Shanghai has an annual production capacity of 480,000 vehicles in 2021, accounting for about 22% of the company’s total capacity. It organized a stress test for resumption of work and production, on April 18 to make preparations for resumption of production.
SMM believes that the gradual resumption of production has indeed brought positive news to the new energy vehicle industry, but there is still a long way to go before the industry's production and sales fully recover. The pandemic situation in Shanghai has not yet shown signs of easing. The number of employees who meet the working conditions (employees and the buildings where employees live have not report COVID cases for 7 consecutive days) is far less than expected. As such, it will be difficult to resume production on a large scale. The leading auto makers in the white list have auto parts inventory that can maintain their production for a certain period of time, but a large number of small and medium-sized auto parts enterprises are not allowed to resume production. If the logistics and transportation issues are not relieved, the closed-loop production will still encounter great challenges.
