In a Rare Move, Tesla Set to Downgrade Production in China Factory

Tesla is discussing to downgrade production at its Shanghai plant by 7% of capacity through the end of the year, despite a recent capacity boost. The move is considered rare for the world’s largest electric vehicle (EV) producer. Since Tesla opened the Shanghai plant in its second largest market in late 2019, it has been looking to run the facility at full capacity and recently upgraded the output by 30% to a maximum of 22,000 vehicles per week.

Although the decision for the downgrade has not been revealed yet, some say the figure was lower than they anticipated.

Tesla’s move comes amid increasing competition from domestic EV makers and a sharply shrinking economy, as consumption drops amid Beijing’s strict Covid-19 curbs.

The upgraded factory can produce 14,000 Model Ys and 8,000 Model 3s. Tesla has aimed to keep it running at full capacity, except during the upgrade and a city-wide COVID-19 lockdown for two months this year.

Tesla now plans to manufacture 20,500 units per week for the rest of the year, for a total of 13,000 Model Ys and 7,500 Model 3s.

Tesla’s China sales climbed nearly 60% in the first eight months of this year. However, that figure is much lower than the overall market for EVs over the same period, which saw the sales more than double.

Since last month, the company has cut delivery waiting times in China at least four times, to a minimum of a week now, besides offering a rebate of 8,000 yuan ($1,100) to buyers of Tesla insurance who take delivery between Sept. 16 and 30.

In the next few months, rising competition is expected to intensify a price war among EV makers.

Tesla sold 60% of its China-made cars in the domestic market during the first eight months, and exported the rest to overseas markets such as Australia, Europe, Japan and Singapore.

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now

Need to access the insight?

Start your 7-day free trial now


Do you need to access special insights on this matter?

Start your 7-day free trial  and become a member today


Subscribe to Top Insights Today

Subscribe to Executive Newsletter Top Insights Today

The Executive Newsletter -Top Insights Today- puts global business events in perspective through special insights

Join the ranks of global executives and subscribe to Top Insights Today

Top Insights Today covers insights on energy, clean-tech, oil&gas, mining, rare earths, defense, aviation, infrastructure, manufacturing, electrical vehicles, big-tech, finance and politics of business

By clicking subscribe you agree to our privacy and cookie policy and terms and conditions of use.

Read more insights

Special Report-U.S. Imposes New Sanctions on Nord Stream 2 Activities

The United States has imposed more sanctions in connection with the Nord Stream 2 pipeline. U.S. Secretary of State Antony Blinken said the sanctions targeted Russia-linked Transadria Ltd. and its vessel. The State Department submitted a report to the Congress mentioning one additional vessel, but did not give details on the it. 

Russia Made Some Bond Payments to Avoid Historic Debt Default

Russia may have prevented its first external bond default in over a century after some creditors received payments of Russian bond coupons in dollars. Russia had to make payments until Wednesday. 

China Looking to Boost Strategic Mineral Supplies

China is looking to boost domestic prospecting and build strategic reserves for energy and critical mineral supplies. “China will launch a new round of domestic prospecting operations, focusing on strategic bulk minerals that are in short supply,” Chinese Minister of Natural Resources Wang said. He added that the government intends to develop projects to bolster strategic reserves and ensure long-term supply security. It will also further optimize incentives to encourage private capital to participate in exploration and prospecting, he stated.

Stay informed

error: This content is protected !!