Earlier this month, news media outlets stated that the Gigafactory Shanghai would be reducing its vehicle production. In November the automaker hit a record high, but the reports stated that the company is facing a demand decline. There have been a number of efforts from the company like price cuts and other notable perks in China. Now, Tesla china posted in a rebuttal that the claims were all untrue.
Bloomberg initially claimed that the China factory would be trimming its 20% production this month. While Reuters reported that Model Y production would decline by 20%. The decline was expected despite Tesla China initiating a number of efforts to make its vehicles more attractive to potential buyers. Despite the rebuttal post from Tesla China to the reports, there was a follow-up report from Reuters that the Model Y production will be cut down to some extent in December. The report says that Gigashanghai will be halted between December 25, 2022, and January 1, 2023.
Citing a Tesla China employee, local Chinese media outlet IT Home noted that the reported Model Y production halt at the end of the month was not accurate. While the publication did not name its source, only noting that its information came from Tesla China’s internal staff, the denial was notable. “It’s not true. Why stop (vehicle) production? It’s a rumor,” the Tesla China employee reportedly noted.
Record sales
The electric vehicle maker had some momentum this December. Last month, Tesla China sold a record 100,291 vehicles made at Giga Shanghai, a new record for the electric vehicle factory. Cui Dongshu, secretary-general of the China Passenger Car Association (CPCA), has also noted that Tesla China’s annual sales for 2022 have the potential to reach 750,000 units.
Piper Sandler analyst Alexander Potter argued against Reuters’ claim that Tesla planned to cut Model Y production by 20% in December. However, he also stated that if Tesla does cut Giga Shanghai production, it would “NOT” be due to competition from other Chinese EV automakers. Potter theorized that Tesla might cut Giga Shanghai production due to macro headwinds and Giga Berlin in Germany. Tesla Model Y production plays a crucial role in the company’s skyrocketing delivery numbers. The Model Y has slowly become Tesla’s top-selling vehicle in many countries. Tesla still aims to make the Model Y the top-selling car of any category across the globe. So cutting Model Y production by 20% might have been difficult to fathom for TSLA bulls. However, there is the argument that Tesla Giga Berlin’s Model Y production would lead to Giga Shanghai’s production cut.
