by SHANGHAI, Dec 5 (Reuters) – Tesla (TSLA.O) plans to cut December production of the Model Y at its Shanghai plant by more than 20% month-on-month, two people with knowledge of the electric vehicle maker’s production schedule said on Monday .
The planned production cut comes after Tesla reported record sales in China for November.
The production cut was first reported by Bloomberg, which said the move was a reflection of sluggish demand.
Reuters could not determine the reason for the planned reduction in production at the Shanghai factory, Tesla’s largest manufacturing hub.
A Tesla representative did not initially respond to a Reuters request for comment.
Late Monday, the Tesla rep responded with “fake news” without elaborating. The spokesman didn’t respond to Reuters questions about whether Tesla was denying a power cut or whether the move tied to weaker demand.
Tesla shares fell 2.1% in premarket trading in New York from previous lows following the company’s statement.
Inventories at Tesla’s Shanghai plant rose sharply after it completed a modernization of production facilities over the summer, with EV stocks rising at an all-time high in October.
The US automaker has slashed prices for Model 3 and Model Y cars in China by up to 9% and offered insurance incentives, which helped boost November sales of its China-made cars by 40% from October and year-on-year to increase by 89.7%.
Tesla shipped 100,291 Chinese-made electric vehicles in November, the highest monthly sales since its Shanghai factory opened in late 2020, Xinhua reported Monday, citing Tesla.
The company’s high inventory levels in Shanghai come as the Chinese auto market faces slowing demand and disruptions to local supply chains.
Uncertainty over when China will take significant steps to ease its “dynamic zero-COVID” strategy has clouded prospects for the world’s largest auto market, although some Chinese cities have taken steps to ease some restrictions following protests in recent weeks .
Globally, Tesla had planned to ramp up production of its Model Y and Model 3 electric vehicles sharply in the fourth quarter as newer factories in Austin, Texas and Berlin ramp up production, Reuters reported in September.
The automaker plans to start production of a facelifted version of the Model 3 in Shanghai in the third quarter of 2023 in a bid to reduce production costs and boost the appeal of the five-year-old electric sedan, Reuters reported.
Reporting by Zhang Yan and Brenda Goh; Edited by Kim Coghill, Kenneth Maxwell, Simon Cameron-Moore and Susan Fenton
Our standards: The Thomson Reuters Trust Principles.
