Tesla (TSLA) achieved record deliveries and exports in China in November with over 100,000 China-made vehicles in a single month.
Nonetheless, reports are suggesting that Tesla is now slowing down its production output at Gigafactory Shanghai as a result of lower demand in China.
Update: Tesla China is now denying the reports of production decelerate in Shanghai.
The China Passenger Automotive Association released its November data and confirmed that Tesla delivered 100,291 China-made cars in November.
That’s a big recent output capability out of Tesla Gigafactory Shanghai.
Output is up almost 90% year-over-year and 40% month-over-month.
It must have been excellent news for Tesla this morning, but the corporate’s stock (TSLA) is down in pre-market trading because the discharge of the November data was accompanied by two reports claiming that Tesla is cutting down the output in December as a result of lower demand in China.
The output cuts will take effect as soon as this week, said the people, who asked to not be identified because the data isn’t public. They estimate the move could reduce production by about 20%.
Reuters also got here out with the same report based by itself source – though it also references Bloomberg‘s report.
The publications are linking the reduction in planned production output out of Gigafactory Shanghai to Tesla’s demand in China softening.
We reported in October that Tesla reduced the worth of the Model 3 and Model Y in China and launched a brand new referral program – a primary sign that demand wasn’t where Tesla needed it to be.
Later, the automaker also launched a brand new money rebate with its insurance partners in China.
The moves led to several reports last month claiming that Tesla’s Chinese demand was significantly down, however the automaker tried to squash the rumors.
Gigafactory Shanghai now officially has an output of 100,000 electric vehicles monthly, which is totally insane. That’s 1.2 million vehicles per 12 months virtually two years after starting production.
It will be a bummer if it needed to already throttle that capability down as a result of demand.
But I’d take the reports with a grain of salt. With regards to China, now we have seen the data get quite murky before it arrives here.
With that said, there have been some clear signs of Tesla attempting to create more demand in China. Due to this fact, it’s not not possible that it’s having some demand issues within the country in the meanwhile. Enough to chop production by 20%? Production it could also export to other markets? I don’t know.