Tesla suspends Tesla Model Y production in China for a week

Tesla will suspend Model Y production in Shanghai in the last week of December.according to WedgeTechnique. The report was also approved Reuters. The latter may have obtained information from a leaked document detailing plans to shut down production this year. At the moment, yes, it is not entirely clear what the exact reason for this decision is.

Reuters indicates that the suspension is 30% reduction in production Tesla Model Y scheduled for December. The current plan is to produce 20,000 units of the above car during the last three weeks of the year. This period already includes a week in which a break will be made.

This figure is obviously significantly lower than in November, when 39,000 units were produced in the same three-week period.

Although the information is confirmed by two different sources, from Tesla make it clear that these are “false” rumors.

What could be the reason for the temporary suspension of Tesla Model Y production in Shanghai? Both media outlets agree that Asian Gigafactory Inventory Levels Soared after the company completed a major upgrade of its facilities last summer. They would increase the speed of production. The problem arises when the cars produced exceed your distribution capacity.

Car sales in China fell

Photo by Tyler Casey

Actually, clean technique says Tesla has been offering some since November Stock try to speed up Model Y sales in the region and therefore free up inventory. For example, buyers who insure their vehicle with a Tesla partner can receive up to $1,150 in final payment per unit.

However, according to local media CnEVPost, sales did not rise as expected. This situation would eventually cause Tesla to suspend Model Y production for an entire week. The temporary stop will give them a breather to manage their current inventory. Those led by Elon Musk are likely to announce more buying incentives in the coming days.

Another point that cannot be ignored is that China continues to bear the brunt of COVID-19. Several tech companies have been hit in recent months because sanitary restrictions have forced factories to close their doors temporarily due to a rise in infections.

However, it seems that the possible pause in Tesla Model Y production is not related to the pandemic, but to the aforementioned sales problem. A report from the China Passenger Car Association showed that demand for cars fell for the first time in six months in November. Thus, the less sales, the more inventory the car manufacturers have. The question that remains up in the air is whether these conditions will carry over to the Tesla Model 3 as well.