Tesla Reportedly Plans To Scale Back EV Production In China

(RTTNews) - Tesla (TSLA) has reportedly cut down its electric vehicle production at its Giga Shanghai factory in China due to sluggish growth in the sales of new-energy vehicles, tough competition and price war, according to Bloomberg.

The article stated that the company has adjusted its work schedule for workers from 6 and half days to five days per week in order to reduce the production of its Model Y SUV and Model 3 sedan.

Earlier, the Shanghai factory, which is the world's largest all-electric car factory, used to manufacture about half of Tesla's global sales volume. The plant had produced more than 950,000 EVs annually, according to the company's fourth-quarter report of 2023.

In February, Tesla's EV production in China declined 19 percent to 60,365 units. During the first two months of 2024, the company delivered 131,812 vehicles, marking a 6 percent decrease from the previous year, out of which only 53 percent were sold in domestic market despite offering price cuts.

The article also indicated that Tesla had also limited manufacturing of EV parts, including battery production lines at some of its workshops and informed some of its suppliers to prepare for extended production limits through April, as the month is considered a slower one in China due to the Tomb Sweeping Day.

Tesla is also facing tight competition from domestic automakers like BYD which offers cheaper and more tech-savvy vehicles to the consumers.

The company is also facing a similar low demand in the U.S. and Europe.