Tesla reportedly trims production output at Giga Shanghai

2024.03.22 3 min read

Tesla is reportedly trimming production output at Gigafactory Shanghai, attempting to match manufacturing levels with demand in a strong market with plenty of worthy competitors.

A new report from Bloomberg suggests that Tesla employees at the plant in Shanghai were told it would lower production of both the Model 3 sedan and Model Y crossover. These are the two vehicle models built at the factory.

In early March, Tesla told employees at the plant that it would trim output by scaling back on work days, going from 6.5 days per week to just five days a week, the report states.

The electric vehicle market in China is significantly different from the U.S. landscape, as the world’s largest automotive market has a vast array of EV models and companies alike.

There are various EV models available at several price points, ranging from ultra-cheap vehicles like the WulingHongGuang Mini EV to more premium offerings.

Tesla to sell zero cars in China by 2030, Morgan Stanley’s Jonas says

There is no shortage of competition in China, and some consumers are more concerned with bargains than quality, features, and vehicle technology.

Tesla is in the process of developing its next-generation platform, which aims to bring vehicle costs down significantly. However, the automaker is still over a year away from introducing this new vehicle, based on its own timeline.

It also told investors earlier this year that 2024 would see a notably lower growth rate than experienced in past years as it has positioned itself between two growth waves. The new EV it plans to roll out in late 2025 will help combat this slowing growth rate and reintroduce higher sales figures as more people will be able to afford the vehicle.

Interestingly, Tesla raised Giga Shanghai’s estimated annual vehicle capacity in October 2023, as the company’s Q3 2023 Update Letter saw the number swell to over 950,000 from its previously-listed 750,000 vehicle rate.

The most recent figures out of China have seen Tesla accumulate over 12,000 insurance registrations for the week of March 11-17. These figures are down 3.9 percent year-over-year.

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