Tesla Factory Upgrade Slashes Output of China-Made EVs

The expansion of Tesla’s electric vehicle factory in Shanghai seriously disrupted the group’s production output in China last month, although the group may make up the losses in the coming months.

The company sold 28,217 Chinese-made vehicles in July – nearly two-thirds less than its sales in June – and that decline appears to stem largely from the scheduled upgrade of its factory lines.

The US carmaker exported 19,756 Model 3s and Model Ys from China last month, the China Passenger Car Association (CPCA) said. In June, it sold 78,906 vehicles and exported 968.

Tesla China usually exports more cars at the beginning of a quarter while focusing more on domestic sales at the end.

Tesla suspended most of its production at the Shanghai plant in July due to the upgrade, which aims to bring the factory’s weekly output to around 22,000 units compared with levels of around 17,000 in June, according to internal memos.

The output ramp-up at Tesla’s most productive manufacturing hub comes after production losses during a two-month Covid lockdown in Shanghai hurt the company’s profit margin in the second quarter.

ALSO SEE: Tesla to Suspend Shanghai Production for 2 Weeks, Says Memo

China EV Sales Could Hit 6m This Year

China‘s overall passenger car sales in July jumped 20% from a year earlier to 1.84 million, the CPCA said.

Sales of electric cars accounted for 26% of the total in July and increased 117%, it added, with sales of plug-in hybrids outpacing pure electric cars.

The association now expects electric car sales for the whole year could reach 6 million units, higher than an earlier estimate of 5.5 million.

BYD led the EV players with 163,042 cars delivered in July, with plug-in hybrids accounting for more than half of its sales.

Nio, Xpeng and Li Auto delivered 10,052, 11,524 and 10,422 vehicles, respectively.

Sales of conventional hybrid cars in July also increased 81% from a year ago, with Japan’s Toyota Motor Corp and Honda Motor leading the segment.