Exclusive: Tesla to run reduced output in Shanghai in January, plan shows

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SHANGHAI (Reuters) – Tesla (TSLA.O) plans to cut production at its Shanghai factory in January and extend cuts that started this month into next year, according to internal schedules seen by Reuters.

According to plans confirmed by Reuters, Tesla will halt production of electric vehicles for 17 days from Jan. cease production of

Tesla has not specified a reason for the production slowdown in its production plans. It was also unclear whether work would continue outside the factory’s Model 3 and Model Y assembly lines during the scheduled downtime. It’s not established that Tesla will be shutting down operations for an extended period of time for the Chinese New Year.

Tesla did not immediately respond to Reuters’ request for comment.

Tesla shares fell 5.8% to $116 in premarket trading. Investor concerns over demand, including from China, CEO Elon Musk’s involvement with Twitter and the recent spike in Tesla stock sales have led to a 56% decline in shares since early October.

Tesla halted production at its Shanghai factory on Saturday, bringing forward an established plan to suspend most work at the factory in the last week of December, Reuters reported.

Tesla’s latest production cuts in Shanghai come amid a growing wave of infections after China withdrew from its zero-COVID policy earlier this month. The move has been welcomed by the company, although it has disrupted manufacturing operations outside of Tesla.

Like other automakers, Tesla is facing weak demand in China, the world’s largest car market. Earlier this month, Tesla offered an additional incentive to buyers who own the vehicle in his December. The company has slashed the prices of its Model 3 and Model Y vehicles by up to 9% in China and has also subsidized insurance premiums.

Securities firm China Merchants Bank International (CMBI) said Tuesday that Tesla’s average daily retail sales in China from Dec. 1 to Dec. 25 fell 28% year-on-year. said in a report. Tesla said he recorded 36,533 retail sales in China from Dec. 1 to Dec. 25.

A brokerage firm that tracks China’s weekly retail auto sales data as a snapshot of demand said industry-wide sales rose nearly 15% on the same metric through Dec. 25. .SZ) is Tesla’s biggest electric car rival in China, where he has risen 93% over the period.

Tesla’s Shanghai factory, the most important manufacturing hub for Musk’s electric vehicle company, maintained normal operations during the last week of last December, taking three days off for the Chinese New Year.

From January 21st to January 27th, 2023 is the Chinese New Year holiday.

Tesla’s Shanghai factory, a complex that employs about 20,000 workers. It accounts for more than half of Tesla’s output in his first three quarters of 2022.

Tesla has set a goal of increasing production and electric vehicle shipments by 50% by 2022. Analysts expect production to fall nearly 45% below its target based on forecasts for the forthcoming fourth quarter.

Reporting by Zhang Yan, Writing by Kevin Krolicki, Editing by Louise Heavens and David Evans

Our standards: Thomson Reuters Trust Principles.

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