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Volkswagen forced to pause production in China

Credit: Volkswagen Group China

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Volkswagen has been forced to pause production at its Chengdu, China plant due to a wave of COVID cases.

China has continued its aggressive “zero-COVID” policy, aiming to rid itself of the virus completely. The Chinese government hopes to accomplish this through forced quarantines, mass testing, and numerous other measures. As the city of Chengdu, among many others, has hit a wave of COVID cases, Volkswagen has been forced to pause production at its facility there, as reported by Reuters.

Volkswagen (VW) began to pause production last week but has been forced to continue as COVID cases persist. At the same time, VW has put holds on two of the five production lines at the facility, citing a lack of parts. Volkswagen has not specified when production will resume, nor has the Chinese government given any indication of when restrictions may be relaxed. In all likelihood, VW, and other manufacturers, may be forced to wait until the wave of cases passes.

According to Volkswagen Group’s Chinese site, the Chengdu plant has a production capacity of 600,000 units annually. Currently, the facility produces the VW ID.4, the VW Golf, the VW T-Roc, and the Audi Q2 (both gas and fully electric versions). Volkswagen has not specified which vehicles have been affected by parts shortage.

Volkswagen is far from the only car maker affected by the recent COVID wave. While not pausing production, BMW has sent office workers to work at home, and Tesla has similarly felt the pressure as COVID testing has increased in Shanghai following a wave of cases there.

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As if the situation couldn’t get worse for automakers, it did just that over the weekend as protests erupted in many major cities in China, including Chengdu. According to Reuters, the protests were against the Chinese government’s heavy-handed COVID policy.

While compared to the rest of the world, China has been able to keep COVID cases low. However, the government’s sensitivity to case numbers has been detrimental to automakers. It is unclear if these production halts from many manufacturers will lead to supply shortages or price increases elsewhere. For the time being, car-makers like Volkswagen, BMW, Mercedes, Porsche, and Tesla, who have major manufacturing locations in the country, will continue to feel the effects of these COVID policies.

What do you think of the article? Do you have any comments, questions, or concerns? Shoot me an email at william@teslarati.com. You can also reach me on Twitter @WilliamWritin. If you have news tips, email us at tips@teslarati.com!

Will is an auto enthusiast, a gear head, and an EV enthusiast above all. From racing, to industry data, to the most advanced EV tech on earth, he now covers it at Teslarati.

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Tesla takes first step in sunsetting Model S and X with drastic move

Tesla won’t be taking custom orders of the Model S or Model X in Europe any longer.

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Credit: @supergeek18 | X

Tesla has seemingly taken the first step in sunsetting two of its older vehicles, the Model S and Model X, by ending international orders.

The flagship sedan and SUV from Tesla are the two oldest cars in the company’s lineup. They account for a very small portion of overall sales, and several years ago, CEO Elon Musk admitted that Tesla only continues to build and sell them due to “sentimental reasons.”

Earlier this year, there were calls for Tesla to end the production of the two cars, but Lars Moravy said that the Model S and Model X were due to get some love later in 2025. That happened, but the changes were extremely minor.

Tesla launches new Model S and Model X, and the changes are slim

Some took this as an indication that Tesla has kind of moved on from the Model S and Model X. A handful of people seemed to think Tesla would overhaul the vehicles substantially, but the changes were extremely minor and included only a few real adjustments.

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In Europe, customers are unable to even put a new order in on a Model S or Model X.

We noticed earlier today that Tesla pressing the ‘Order’ button on either of the flagship vehicles takes you to local inventory, and not the Design Studio where you’d configure your custom build:

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Tesla simply does not make enough Model S or Model X units to justify the expensive logistics process of shipping custom orders overseas. It almost seems as if they’re that they will essentially build a bunch of random configurations, send them overseas every few months, and let them sell before replenishing inventory.

Inversely, it could also mean Tesla is truly gearing up to sunset the vehicle altogether. It seems unlikely that the company will fade them out altogether in the next couple of years, but it could absolutely think about ending international orders because volume is so low.

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Energy

Tesla inks multi-billion-dollar deal with LG Energy Solution to avoid tariff pressure

Tesla has reportedly secured a sizable partnership with LGES for LFP cells, and there’s an extra positive out of it.

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Credit: Tesla

Tesla has reportedly inked a multi-billion-dollar deal with LG Energy Solution in an effort to avoid tariff pressure and domesticate more of its supply chain.

Reuters is reporting that Tesla and LGES, a South Korean battery supplier of the automaker, signed a $4.3 billion deal for energy storage system batteries. The cells are going to be manufactured by LGES at its U.S. factory located in Michigan, the report indicates. The batteries will be the lithium iron phosphate, or LFP, chemistry.

Tesla delivers 384,000 vehicles in Q2 2025, deploys 9.6 GWh in energy storage

It is a move Tesla is making to avoid buying cells and parts from overseas as the Trump White House continues to use tariffs to prioritize domestic manufacturing.

LGES announced earlier today that it had signed a $4.3 billion contract to supply LFP cells over three years to a company, but it did not identify the customer, nor did the company state whether the batteries would be used in automotive or energy storage applications.

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The deal is advantageous for both companies. Tesla is going to alleviate its reliance on battery cells that are built out of the country, so it’s going to be able to take some financial pressure off itself.

For LGES, the company has reported that it has experienced slowed demand for its cells in terms of automotive applications. It planned to offset this demand lag with more projects involving the cells in energy storage projects. This has been helped by the need for these systems at data centers used for AI.

During the Q1 Earnings Call, Tesla CFO Vaibhav Taneja confirmed that the company’s energy division had been impacted by the need to source cells from China-based suppliers. He went on to say that the company would work on “securing additional supply chain from non-China-based suppliers.”

It seems as if Tesla has managed to secure some of this needed domestic supply chain.

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Tesla brings perhaps the coolest interior feature to cars in latest update

Tesla adds on to the “fun” aspect of its vehicles.

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Credit: Tesla

Tesla has brought perhaps the coolest interior feature to its cars in a new update that is rolling out to vehicles now.

The feature will require a newer vehicle that has interior ambient lighting, which is present on the new Model S, Model X, Model 3 “Highland,” and Model Y “Juniper.” The Cybertruck also has ambient lighting strips throughout.

Tesla Model Y’s ambient lighting design changes revealed in leaked video

With the Version 2025.26+ Software Update, Tesla is rolling out a new “Sync Accent Lights w/ Music” feature, which is available on the Tesla Toybox:

To enable the feature, you’ll access the Toybox, choose “Light Sync,” and then choose “Sync Accent Lights w/ Music.”

Although it does not improve the performance of the vehicle, it is yet another example of Tesla making one of the coolest cars out there. This is truly a cool add-on that can be used to impress your friends and family.

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