Photo: Tesla
The Chinese journalist Yan Chang was the first to report that Giga Shanghai would have a production cut. Bloomberg and Reuters heard about that and confirmed the information with their sources: Tesla is indeed lowering production numbers in its Chinese plant to meet the decreasing demand in that market.
According to Yan Chang’s sources, the Model Y production hours were reduced from 11.5 to 9.5 hours. The company also took a break from November 28 until December 2, which made him suspect Tesla could try to give it a “hardware revision.” He must have guessed it could try to build its Chinese Model Y like the Texan EV, with two massive castings for the front and rear structure and a structural battery pack. Although that is what Tesla should do in all its factories soon, that depends on having 4680 cells in China or using CATL’s or BYD’s systems compatible with the idea.
Bloomberg did not mention how Tesla cut production at Giga Shanghai, but its sources said the measures allowed the EV maker to produce 20% fewer cars. If the factory can make around 90,000 cars per month, that reduction is equivalent to 18,000 vehicles. In other words, Tesla intends to make only 72,000 EVs monthly.
Curiously, the China Passenger Car Association (CPCA) said that Tesla delivered 100,291 in China in November. That must refer almost exclusively to the Model 3 and Model Y made in the country. That’s the best monthly result Tesla has ever presented in China.
That may sound like extraordinary news if you ignore that this figure was due to less demand in foreign markets, leaving most of the local production to be absorbed by Chinese customers. That drove lead times for the Model Y and Model 3 to drop sharply there. According to Bloomberg, Tesla delivers any derivative of these two models within a month, if not less. Customers in the U.S. are experiencing the same: some got a VIN 12 hours after ordering a new car.
Reuters added that the production cut will be superior to 20% and that the EV maker is facing high inventory levels. For a company that says it only manufactures EVs that a customer already ordered, this is weird. After all, all vehicles should already have owners: they just need to be delivered.
One possible explanation is that rejection at delivery may have increased, leaving Tesla with vehicles it will have to sell to someone else because the original buyer did not want a defective car. The list of complaints includes loose trim, cut seats, peeled paint, foggy headlights and taillights, and uneven panel gaps, to name those from the top of our heads.
Giga Shanghai was created to become an export hub. With Europe getting cars from Giga Grünheide, Tesla may have to expand to new markets, which will be difficult because all its service centers and Supercharging stations belong to the EV maker. In other words, it will have to make massive investments just to have new markets for its Chinese EVs. At the end of the day, that may not make much sense.
Bloomberg did not mention how Tesla cut production at Giga Shanghai, but its sources said the measures allowed the EV maker to produce 20% fewer cars. If the factory can make around 90,000 cars per month, that reduction is equivalent to 18,000 vehicles. In other words, Tesla intends to make only 72,000 EVs monthly.
Curiously, the China Passenger Car Association (CPCA) said that Tesla delivered 100,291 in China in November. That must refer almost exclusively to the Model 3 and Model Y made in the country. That’s the best monthly result Tesla has ever presented in China.
That may sound like extraordinary news if you ignore that this figure was due to less demand in foreign markets, leaving most of the local production to be absorbed by Chinese customers. That drove lead times for the Model Y and Model 3 to drop sharply there. According to Bloomberg, Tesla delivers any derivative of these two models within a month, if not less. Customers in the U.S. are experiencing the same: some got a VIN 12 hours after ordering a new car.
Reuters added that the production cut will be superior to 20% and that the EV maker is facing high inventory levels. For a company that says it only manufactures EVs that a customer already ordered, this is weird. After all, all vehicles should already have owners: they just need to be delivered.
One possible explanation is that rejection at delivery may have increased, leaving Tesla with vehicles it will have to sell to someone else because the original buyer did not want a defective car. The list of complaints includes loose trim, cut seats, peeled paint, foggy headlights and taillights, and uneven panel gaps, to name those from the top of our heads.
Giga Shanghai was created to become an export hub. With Europe getting cars from Giga Grünheide, Tesla may have to expand to new markets, which will be difficult because all its service centers and Supercharging stations belong to the EV maker. In other words, it will have to make massive investments just to have new markets for its Chinese EVs. At the end of the day, that may not make much sense.
Sources from Tesla's Shanghai factory tell me that the Model Y production capacity is scheduled to be cut this month, and I wonder if a hardware revision will be introduced.
— Yan Chang (@cyfoxcat) December 1, 2022
Model Y production work hours at Tesla's Shanghai plant were reduced from 11.5 hours to 9.5 hours per day, and a break was taken from 11.28 to 12.2.
— Yan Chang (@cyfoxcat) December 1, 2022
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