If Shanghai does not resume production, all technology and industrial sectors involved with the Shanghai supply chain will be completely shut down after May, especially the automotive industry, Yu said.
Shanghai's Covid lockdown has had a big impact on the auto supply chain, and a Huawei veteran who is one of the most influential in China's tech industry is also calling for a quick return to work after the helmsman of XPeng Motors (NYSE: XPEV, HKG: 9868).
If production does not resume in Shanghai, all technology and industrial sectors involved with the Shanghai supply chain will be completely shut down after May, especially the automotive industry, Richar Yu, CEO of Huawei's consumer business and CEO of the smart car BU, said today.
Yu made the comment in his WeChat status while sharing media reports about XPeng chairman and CEO He Xiaopeng's concerns about the impact of the lockdown in Shanghai on the supply chain of automakers.
If this situation continues, the economic damage will be significant, Yu said, adding that some companies have already started shutting down production since mid-April due to supply chain disruptions caused by the Shanghai lockdown.
Yu is one of the most influential people in China's tech industry, turning Huawei's mobile business from zero to one of the strongest in the world, although it has since been weakened by US sanctions.
Huawei announced on April 20, 2021 that the company officially began selling cars, with the Seres SF5 from Seres, a brand owned by Chongqing Sokon, as the first model to enter its channels.
Seres announced the launch of a premium smart car brand with Huawei called AITO on December 2 last year, and on December 23, Yu unveiled the first model of the AITO brand, the Wenjie M5, an SUV with extended-range technology that was delivered to its first owners on March 5 this year.
(Image credit: AITO)
Shanghai has yet to see any sign of lifting travel restrictions since it entered a phased lockdown on March 28, and Tesla has been out of production since then. A few days ago, NIO announced a temporary production shutdown after Covid caused several of its suppliers to stop production.
China added 3,472 confirmed local Covid cases and 20,694 asymptomatic infections on Thursday. Among them were 3,200 confirmed cases and 19,782 asymptomatic infections in Shanghai, according to health authorities.
If companies in the auto supply chain in Shanghai and neighboring cities can't find a way to dynamically resume production, then all Chinese car companies could shut down production by May, XPeng CEO He said Thursday in his WeChat status.
He did note, however, that Chinese regulatory authorities are doing their best to coordinate. "Expect more government and regulatory authorities' support and joint efforts," he said.
Shanghai's neighboring provinces of Jiangsu, Zhejiang and Anhui are key supply areas for core auto parts, and the Covid outbreak in Shanghai will have a big impact on the supply of key parts for the auto industry, the Securities Times quoted Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), as saying on April 11.
NIO's Hefei plant gradually resuming production, report says