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Exclusive Tesla to carry out reduced production in Shanghai in January, the plan shows

Exclusive Tesla to carry out reduced production in Shanghai in January, the plan shows
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SHANGHAI (Reuters) – Tesla plans to implement a reduced production schedule at its Shanghai plant in January and to extend reduced production started this month into next year, according to an internal timeline verified by Reuters.

Tesla will shut down production for 17 days in January between 3/1 and 1/19 and will end production of electric vehicles from January. 20 to 1. 31 for a longer break for Chinese New Year, according to Reuters plan.

Tesla hasn’t given a reason for the production slowdown in its production plan. It was also not clear whether work outside the Model 3 and Model Y assembly lines at the plant would continue during the planned shutdown. It is not common practice for Tesla to suspend operations for an extended period of time around Chinese New Year.

Tesla did not immediately respond to a request for comment from Reuters.

Tesla suspended production at its Shanghai plant on Saturday, advancing an established plan to halt most work at the plant in the last week of December, Reuters reported.

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

A truck transports new Tesla cars at its plant in Shanghai, China May 13, 2021. REUTERS/Aly Song

A truck transports new Tesla cars at its plant in Shanghai, China May 13, 2021. REUTERS/Aly Song

Like other automakers, Tesla is facing a drop in demand in China, the world’s largest auto market. Earlier this month, Tesla offered an additional incentive to buyers who take ownership in December. The company has slashed the prices of Model 3 and Model Y cars in China by up to 9%, in addition to a subsidy towards insurance costs.

The Shanghai factory, the main manufacturing hub for Elon Musk’s electric vehicle company, maintained normal operations during the last week of December last year, taking a three-day hiatus for the Chinese New Year.

The Jan 21st to 1st 27th period in 2023 is a public holiday for Chinese New Year in China.

Tesla’s Shanghai plant, a complex that employs around 20,000 people. accounted for more than half of Tesla’s production in the first three quarters of 2022.

Tesla has set a goal for 50% growth in EV performance and deliveries in 2022. Analysts expect the performance to miss that target by about 45% based on forecasts for the soon-to-be-ended fourth quarter.

(Reporting by Zhang Yan, Writing by Kevin Krolicki, Editing by Louise Heavens)

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