Tesla Denies Shanghai Factory’s Temporary Production Stoppage of Model Y

On December 12, Tesla denied a report from Reuters on December 9 indicating that the Amercian electric vehicle maker’s Shanghai factory will suspend production of its Model Y from December 25 to January 1 next year.

The memo obtained by Reuters detailed Tesla’s latest production plan. Tesla aims to produce over 20,000 Model Ys in the last three weeks of this month. By contrast, the output of the Model Y from Tesla’s Shanghai factory in November was about 13,000 vehicles per week. According to this calculation, the output of Model Y in this factory could reach nearly 40,000 units in the last three weeks of this year.

Last week, Reuters reported that due to lower-than-expected market demand, Tesla’s Shanghai factory reduced production of its Model Y by about 20%, which was denied by Tesla China’s spokesperson.

According to the China Passenger Car Association, the retail sales of new energy passenger cars reached 598,000 units in November, up 58.2% year-on-year and 7.8% quarter-on-quarter, of which Tesla China accounted for 10.5%. Tesla China sold 100,291 vehicles in November, while exporting 37,798 vehicles.

By the end of November, the Shanghai factory has delivered more than 650,000 new vehicles this year, and its annual production capacity is estimated to exceed 750,000 units, making it Tesla’s highest production capacity factory in the world. In order to replicate the success of its Shanghai factory in the United States, firm founder Elon Musk sent 200 engineers from Shanghai to the United States in November this year to guide the production of the company’s Fremont factory.

In order to improve sales, in addition to a recent price reduction and preferential treatment, Tesla has introduced subsidy policies in China as national subsidies are about to end. Consumers who purchase vehicles and pick them up on time in December are eligible to receive an insurance subsidy of 4,000 yuan ($573), while customers who place orders through online channels will receive 20,000 points, which can be exchanged for gifts such as charging services and roof racks.

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According to the research data of Wedbush Securities, Tesla’s global delivery volume is expected to reach 1.3 million vehicles in 2022, an increase of 33% from last year and a contraction compared with Tesla’s 50% growth target. Tesla CFO Zach Kirkhorn also said that the annual delivery growth rate of Tesla this year will be slightly lower than the planned 50%.