Tesla is pausing its output assembly stages at its Shanghai plant starting late December to January next year. This update is amid reports that the electric car factory is under production line upgrades and seeing a slowing market.

China Plant Halts in the Holiday

Unknown sources working closely with the company told Bloomberg that many factory workers assigned to both Tesla Model Y and Model 3 assembly lines would not be required to put up work in the last week of December.

The people who refused to be named as they are not authorized to speak publicly about the company also said that Model Y productions could be halted until early January.

Furthermore, production of the Model 3 sedan may also be suspended again during Chinese New Year, which falls in late January 2023, to allow additional upgrades and equipment maintenance to accommodate the model’s revamped version.

Officials Refused to Comment

Tesla officials in China have yet to issue statements or reply to numerous media inquiries. Meanwhile, Reuters reported on December 9 that Tesla would cease Model Y assembly at its Shanghai facility between December 25 and January 1, according to an internal memo seen by Reuters detailing the automaker’s most recent production schedule.

The memo also said that the electric car company would make just over 20,000 units of Model Y vehicles for the remaining weeks of December combined.

People who spoke to Reuters mentioned that the suspension of the assembly later this month is part of a cut in planned production of about 30% for Tesla’s best-seller Model Y.

Reports tell us that these developments differed greatly from last year’s production course. It is even more noticeable since the Shanghai plant is one of Tesla’s most extensive facilities. If confirmed, this would be the first time the company would shut down for the remainder of the holiday.

Declining Customer Demand

According to Transport Topic, consumer demand for automobiles in China has been hampered by the country’s continued adherence to strict COVID policies, which has resulted in snap lockdowns and kept customers away from showrooms.

Retail sales of all passenger vehicles in the United States also fell in November, down nearly 11% from October, according to Passenger Car Association figures released on December 8.

The slowing demand comes after Tesla upgraded its Shanghai facility in August to increase production to about 1 million vehicles per year.

The Musk-owned company also reduced its rates and launched a marketing campaign. More than 100,000 EVs were exported from the factory in November, a record, with over 70% of them being Model Y SUVs.

Per another Bloomberg article, Tesla is reportedly curtailing production shifts at the facility as early as Monday and has postponed onboarding some new staff, as other people familiar with the matter stated earlier this week.

why is tesla suspending output from its biggest china factory this month?

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