Tesla to Ramp Up Shanghai Output As Price Cuts Fuel Demand

Tesla's price cuts have sparked what analysts have described as a price war in China. Photo: Reuters.

Tesla plans to step up output at its Shanghai plant over the next two months to meet demand ignited by aggressive price cuts on its best-selling models.

The EV-maker is aiming to produce an average 20,000 units per week at its Shanghai factory in February and March, according to a planning memo, which detailed output plans for Tesla’s most productive and profitable manufacturing hub.

That level of production would take the plant’s output to roughly its rate in September, when it turned out 82,088 Model 3 and Model Y cars, according to data from China Passenger Car Association.

Also on AF: Chinese Carmakers Are Tesla’s ‘Hardest, Smartest’ Rivals, Says Musk

In December, Tesla’s Shanghai plant had cut output by about a third from November to cope with rising inventory. It also extended a Lunar New Year holiday period for workers in January.

The automaker then announced price cuts of between 6% and almost 14% in China.

Chief executive Elon Musk said last week orders were roughly double the production in January after global price cuts.

2023 deliveries could hit 2 million vehicles, so long as there was no external disruption, he added.

Tesla’s price cuts have sparked what analysts have described as a price war in China. Automakers like Xpeng and Seres have followed the company in cutting prices.

In the first 29 days in January, Tesla’s average daily retail sales in China surged 36% over the corresponding period a year earlier, to 25,686 vehicles.

The growth was slightly higher than that of major competitor BYD, while overall car sales fell 45%, data from China Merchants Bank International showed.

Tesla’s Shanghai plant produces vehicles for the China market and for export to Europe.

Reuters, with additional editing by Vishakha Saxena

Tesla’s Mighty Profits Eat Into Asian Rivals in EV Price War

Buyers Say Tesla Forced Them to Close Orders Before Price Cuts

VinFast Plans Promotions in Response to Tesla EV Price Cuts

BYD Beats Tesla to be Top EV Seller in 2022 – SCMP

Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has been working as a digital journalist since 2013, and is an experienced writer and multimedia producer. As an eager stock market trader and investor, she is keenly interested in economy, emerging markets and the intersections of finance and society. You can tweet to her @saxenavishakha