Giga Shanghai's plan to resume production has been approved by the local government, but is still subject to change, according to Reuters.

(Tesla China video screenshot)

Tesla (NASDAQ: TSLA) is preparing to resume production at its Shanghai plant on Monday after a three-week halt, Reuters said today, citing two people familiar with the matter.

The company's plan to resume Giga Shanghai's production was approved by the local government, but is still subject to change depending on how the Covid pandemic in the city develops, according to the report.

Tesla plans to start with one shift and then gradually increase it, one of the people familiar with the matter said.

Giga Shanghai's most recent shutdown was the longest since the plant began production in late 2019, resulting in a loss of output of more than 50,000 units, according to calculations based on internal output plans seen by Reuters.

However, ongoing production at the plant could be affected by difficulties in sourcing auto parts, as logistics in and around the city have been severely disrupted by Covid measures, the report said.

Production at Tesla's plant in the city has been suspended since Shanghai went into a phased lockdown from March 28 until now.

Earlier today, there were rumors that Tesla said in an answer to a US investor that Giga Shanghai would not resume work until mid-May at the earliest, with the parts supply chain resuming at that time.

Grace Tao, Tesla's vice president of external affairs, later said on Weibo that the rumors were false.

The shutdown of that chain in Shanghai, a key city in China's auto industry, amid Covid controls has raised many concerns.

Those including Motors (NYSE: XPEV, HKG: 9868) chairman and CEO He Xiaopeng and Richar Yu, CEO of 's consumer business and CEO of smart car BU, have already warned that all automakers in China face significant losses if the auto supply chain in Shanghai and neighboring cities can't resume production anytime soon.

Earlier today, however, it appears that positive signals have begun to emerge, as China's largest car company SAIC is reportedly preparing for a resumption of production.

SAIC is conducting an internal assessment for launching a resumption of production and will launch a stress test on April 18, Sina Tech said today, citing a document.

SAIC will apply for a whitelist for its companies to restart production ahead of schedule, and the approved list will be filed in local communities. The list and timing of personnel returning to work will be determined, according to the report.

In principle, non-essential personnel, are still recommended to work from home. Employees working on-site will be required to undergo polymerase chain reaction (PCR) tests every 48 hours, according to the report.