Tesla (NASDAQ:TSLA) reduced its electric vehicle production in China amidst slower growth in new-energy vehicle sales and heightened competition in the largest car market globally. Reports from Bloomberg indicate a shift in the work schedule at Tesla’s Shanghai facility, cutting down from six and a half days to five days per week, affecting the Model Y SUV and Model 3 sedan’s output. The adjustment took place earlier this month, and it’s uncertain when production will resume fully.
Despite a significant increase in China’s passenger vehicle and new-energy vehicle sales in early 2024, Tesla experienced a decline in its shipments. The company, competing with local brands like BYD offering more affordable and technologically advanced alternatives, relies heavily on its pre-2020 launched models, Model 3 and Model Y, which have seen only minor updates. The downturn in electric vehicle demand is not just confined to China but extends to the US and Europe. Furthermore, Tesla’s Shanghai plant, inclusive of its battery production lines, might experience extended production pauses, with employees and suppliers being alerted to anticipate prolonged production slowdowns into April.