It is reported that some of Tesla's production lines in Shanghai were suspended until the end of February and upgraded to produce an improved version of Model 3.
According to people familiar with the matter, some of the production lines at Tesla's Shanghai factory will be suspended until the end of February. In the meantime, the company will upgrade its plant to launch an improved version of Model 3 in the more competitive Chinese market.
Auto production at Tesla's Shanghai plant is divided into two stages, with some workers in the first stage no longer allowed to enter the production line as early as Sunday, according to people familiar with the matter.
In fact, Tesla has been upgrading the production line in stages over the past two months and is expected to start delivering a new version of Model 3 later this year. However, the company has not publicly confirmed this.
Tesla Shanghai Factory currently mainly produces Model 3 and Model Y.
The upgrade comes at a time when Tesla is facing increasing competition in China, the world's largest electric car market. Sales of the Model 3 in China have been declining, with sales of about 125000 vehicles in 2022, down 17% from the previous year. As local competitors such as BYD and Xilai continue to launch new models, Tesla has had to cut prices on domestic models to boost sales.
Nonetheless, orders for domestic Tesla have begun to level off since the beginning of this month after the initial frenzy after the price cut, according to people familiar with the matter.
Tesla produced 1.37 million electric cars worldwide last year, more than half of them in Shanghai factories. After several upgrades, the annual production capacity of the Shanghai plant has reached about 1 million vehicles, more than double the original plan of 450000 vehicles. Representative Tesla didn't immediately respond to a request for comment.
Total shipments of new energy passenger vehicles from Chinese dealers almost doubled to 6.5 million in 2022, according to the passenger car Association. The agency expects that number to grow by 30% this year. Carmakers including Xilai, Xiaopeng and Geely are launching new electric models to compete for market share.
Tesla shares rose 2.38% to close at $214.24 on Wednesday local time. By Wednesday's close, the stock had risen more than 70% so far this year.
