According to an internal schedule retrieved by Reuters, Tesla intends to run a limited production schedule at its Shanghai facility in January, extending the decreased output it began this month into the new year.
The timetable indicates that the auto giant would produce electric vehicles for 17 days in January, from Jan. 3 to Jan. 19, and then suspend production for a longer break for the Chinese New Year from Jan. 20 to Jan. 31.
(Photo : STR/AFP via Getty Images)
Tesla boss Elon Musk (L) walks with Shanghai Mayor Ying Yong during the ground-breaking ceremony for a Tesla factory in Shanghai on January 7, 2019.
Tesla's Output Forecast
In its output forecast, Tesla did not give an explanation for the production slowdown. It was also unclear whether production at the factory would continue while the Model 3 and Model Y manufacturing lines were shut down.
In premarket trade, Tesla shares were down 5.8% at $116. Investors' worries regarding demand, notably those from China, as well as the uncertainty surrounding Elon Musk's role on Twitter and his recent Tesla share sales have contributed to the stock's 56% decline since the beginning of October.
According to Reuters, Tesla pulled ahead of a predetermined plan to halt the majority of operations at the plant in the final week of December and stopped production at its Shanghai plant on Saturday.
Tesla's most recent production reductions in Shanghai came amid an uptick in infections following China's earlier this month decision to abandon its zero-COVID policy.
In China, the biggest auto market in the world, Tesla has also experienced a decline in demand, much like other automakers.
Tesla provided an additional incentive earlier this month for purchasers taking ownership of vehicles in December.
Along with an insurance subsidy, the EV giant has lowered the price of the Model 3 and Model Y in China by up to 9%.
Average Daily Sales
Tesla's average daily retail sales in China from December 1 through December 25 decreased 28% from a year earlier, according to research published on Tuesday by the brokerage China Merchants Bank International (CMBI).
The data indicates that the EV giant made 36,533 retail sales in China between December 1 and December 25. The brokerage reported that industry-wide sales were up about 15% by the same metric through December 25 as well.
The larger electric vehicle rival to Tesla in China, BYD, reportedly saw a 93% increase in average daily sales over that time.
The most significant center of production for Musk's electric vehicle company, Tesla's Shanghai facility, ran normally during the final week of December 2017 before taking a three-day holiday for the Chinese New Year.
In 2023, China will observe a public holiday from January 21 to January 27 in honor of the Chinese New Year.
More than half of Tesla's output in the first three quarters of 2022 came from its Shanghai plant, according to Reuters.
Tesla has set a goal for 2022 that calls for a 50% increase in output and electric vehicle deliveries. Based on projections for the fourth quarter, analysts anticipate that output will fall short of that target by roughly 45%.
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