Shares of Tesla (TSLA) fell this morning following a report that automakers are reducing their electric vehicle production at Gigafactory Shanghai due to lower demand.

Bloomberg says Tesla has cut a day and a half of work at Gigafactory Shanghai:

The US automaker earlier this month instructed workers at its Shanghai factory to reduce production of both the Model Y and Model 3 – the two vehicles Tesla makes in China – by working five days a week instead of the usual 6 1/2. 2 day. said, asking not to be identified because they are not authorized to speak publicly.

The change reportedly happened earlier this month and Tesla has not communicated with employees when it plans to return to full capacity.

This comes after indications that Tesla was clearly having more difficulty than usual selling vehicles in China recently.

Earlier this week, Electricity reported how Tesla has offered bigger discounts and incentives to customers to take delivery by the end of the month.

The Bloomberg report also claims that the reduction in production capacity extends to areas of the factory other than Model 3 and Model Y production:

Some production lines at Tesla’s Shanghai factory, including the battery workshops, are subject to longer suspensions, one of the people said. Tesla has instructed employees and some suppliers to be prepared for extended production limits through April. In early April, China celebrates Tomb Sweeping Day, a holiday that is usually a quiet time for consumption.

In addition to the difficulties in selling current inventory, Tesla’s sales of Chinese-made vehicles have also fallen this year.

According to the Chinese Passenger Car Association show, Tesla delivered 131,812 vehicles in the first two months of 2024, down 6% year-on-year. Furthermore, only 53% of these Chinese-made vehicles were sold in China. Tesla exported the rest.

Competition in China is extremely high, with Chinese EV manufacturers offering cheaper EVs and increasing their quality.

FTC: We use monetized auto-affiliate links. More.

Leave a Reply

Your email address will not be published. Required fields are marked *