Tesla (TSLA) – Get the Tesla Inc report. A bad week ends on a positive note.
Earlier this week, Tesla announced a price increase across its entire lineup of vehicles. It was the electric car maker’s second price hike this month after it increased the cost of some of its long-range models last week.
Inflation drives up the price of the entire fleet, but the Model 3 price may be the most important for Tesla, as this base model needs to be affordable.
The price of the rear-wheel drive Model 3 increased to $46,990 from $44,990, while the longer-range version of the car increased to $54,490 from $51,990.
More bad news came a few days later when Chinese officials battling a new Covid-19 outbreak began lockdowns of major population centers across the country to combat the spread.
Those lockdowns forced Tesla to close its Shanghai plant for a couple of days, but the company has now returned to car production at what has turned out to be its most important factory in the world.
Tesla resumes production in China
Tesla China is back, baby!
The company reportedly resumed production at its Shanghai plant on Friday after a two-day pause as a surge in coronavirus infections in China led to lockdowns across the country.
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Shanghai has begun loosening its grip on Covid, giving workers at the 24-hour plant the freedom they need to work regular shifts.
Enough workers have returned to their jobs to keep the plant running, Reuters reported, citing sources.
The plant has reportedly resumed two-shift production from 7 a.m. local time to operate around the clock. Returning workers must be tested for Covid-19.
Tesla has close ties with China
Tesla is the market share leader in the US, but Elon Musk and company know that much of the company’s growth aspirations stem from its overseas performance.
Unlike many US tech companies that have a rocky relationship with the Chinese government, Musk and Tesla have a fairly large seat at the negotiating table.
Earlier this month, Musk took a ride with Qin Gang, China’s ambassador to the US.
Close ties with government officials are paying off for Tesla, which has been able to surpass 50,000 vehicles delivered in each of the last three months of 2021. This figure allows Tesla to deliver more than 600,000 vehicles to China annually. The company produced 470,000 vehicles in China.
Last November, Tesla announced plans to invest 1.2 billion yuan ($187.91 million) to expand manufacturing capacity at its Shanghai plant. Tesla is the only foreign passenger car factory in China that is wholly owned by the company and does not have to be operated by a joint venture.
Musk said in 2021 that Tesla’s Shanghai plant had surpassed the capacity of its Fremont plant, which produced almost 450,000 units last year. Tesla has made the Shanghai plant its new main export hub just a couple of years after starting production in December 2019.