Tesla Will Extend the Reduced Output at Giga Shanghai Throughout January 2023

Tesla will extend the reduced output at Giga Shanghai throughout January 2023 6 photos
Photo: Tesla
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Tesla reduced production at Giga Shanghai before Christmas, citing planned maintenance. New reports claim that Giga Shanghai production will be affected well into January, with a production halt scheduled between January 20 and January 31, supposedly for the Chinese New Year.
The end of the year is not looking good for Tesla, as it faces headwinds in the global markets. Its main production hub in Shanghai was rumored to stop production before Christmas, one of the reasons being a rising wave of infections after China lifted its zero-COVID policy. Other speculations indicate the need to cut output by as much as 30% as demand for Tesla vehicles has slowed, and the inventories have started to build up.

Tesla China later sought to clarify this matter to curb further speculations. According to a company statement, some sections of the factory are undergoing maintenance, while others will continue to operate normally. Of course, Tesla says there is no softening in demand and everything is going according to plan, a statement that has become familiar in the past year.

“The vehicle production will carry out the annual production line maintenance work as planned next week, and the workers will have a rest during the production line maintenance period after one year of hard work,” wrote Tesla China in a message to the Chinese media. “Workshops that produce charging poles and other auto parts have not stopped operation. It is not completely accurate to say the factory has been shut down.”

Nevertheless, it has not been common practice for Tesla to stop production at the end of the year. Giga Shanghai is the most important production hub for the EV maker, and the year’s end was traditionally a period when Tesla has pushed for increased production and sales. Giga Shanghai kept operating normally during the last week of December 2021 and only took a three-day break for the 2021 Chinese New Year. This year, things are different.

Not only has production been reduced on December 25, but Tesla is also planning an extended production break between January 20 and 31. This is more than the three days of production stopped in 2021 and the duration of the public holiday, which is celebrated between January 21 to 27 this year. Tesla has not specified a reason for the production slowdowns, although Reuters thinks this has to do with the increased inventories and the dwindling demand for Tesla electric vehicles.

Tesla has previously issued guidance stating that it expects a 50% growth in output and deliveries in 2022. Nevertheless, analysts expect production to fall short of that goal. Based on forecasts for the fourth quarter, Tesla should increase output by about 45% in 2024, although the recent production idling could make those estimates look too optimistic. We’re not sure to what degree the reduced output at Giga Shanghai will be canceled out by the production ramping up at Giga Texas and Giga Berlin. Nevertheless, the end of the year is nigh, and so is the moment when fourth-quarter results will be out.
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About the author: Cristian Agatie
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After his childhood dream of becoming a "tractor operator" didn't pan out, Cristian turned to journalism, first in print and later moving to online media. His top interests are electric vehicles and new energy solutions.
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