Tesla's Shanghai Factory Reduces Model Y Production

TapTechNews May 24, Reuters reported that Tesla's Shanghai Gigafactory has reduced the production of its best-selling Model Y electric vehicle by more than 20% since March.

The Chinese market is currently Tesla's second-largest market after the United States, and most of the cars produced at the Shanghai factory are sold locally in China. With the slowdown of the economic situation, coupled with price wars among major electric vehicle manufacturers, the demand for this old model of Tesla has significantly declined in China.

People familiar with the matter said that Tesla's Shanghai Gigafactory plans to reduce the production of Model Y by at least 20% during March-June. As of TapTechNews' dispatch, Tesla has not yet responded, but Tesla just deleted the goal of 'delivering 20 million vehicles annually by 2030' in the latest impact report released on Thursday.

Data from the China Association of Automobile Manufacturers shows that the production of Model Y in China was 49,498 units in March and 36,610 units in April, down 17.7% and 33% respectively year-on-year.

In the first four months of this year, Tesla produced a total of 287,359 Model Y and Model 3 cars in China, a 5% decrease from the same period in 2023, while the production of Model 3 increased by 10%.

In fact, to boost sales, Tesla Model Y has reduced its Chinese price to the lowest level since 2021 last month, and also launched a limited-time 0 down payment plan for Model 3/Y: 0 down payment from the start, and the daily payment starts from as low as $2.25 (145 yuan).

Data from the Passenger Car Association shows that throughout 2023, Tesla Model Y was the best-selling new energy vehicle in China, selling 646,845 units, and BYD Song ranked second with 640,565 units. Tesla's share in the entire new energy vehicle market in China in 2023 was 7.8%, but it dropped to 6.8% in the first four months of 2024; BYD ranked at the top with a market share of 34.3% in the first four months.