SHANGHAI (Reuters) – Tesla (NASDAQ:) has cut production of its best-selling Model Y electric car at its Shanghai plant by a double-digit percentage since March, according to industry data and a source.
The move is aimed at addressing weakening demand for the U.S. automaker’s aging model in China, the second-largest market into which most vehicles produced at the Shanghai plant are sold and where a brutal price war has erupted among electric vehicle makers amid the economic crisis. slow down.
The Shanghai plant, Tesla’s largest production center in the world, planned to cut production of the Model Y by at least 20% between March and June, said the person, who asked not to be named because the matter is private.
Data from the China Association of Automobile Manufacturers (CAAM) showed Model Y production in China stood at 49,498 units in March and 36,610 in April, down 17.7% and 33% respectively from a year earlier.
Tesla produced a total of 287,359 Model Y and Model 3 vehicles in China in the first four months, down 5% from the same period in 2023, with Model 3 production 10% higher, CAAM data shows. .
It’s unclear whether production cuts will be extended into the second half of this year or for the Model 3, or whether Tesla’s U.S. and German plants will adopt similar production cuts.
Tesla did not respond to requests for comment.
Tesla made no mention of its goal of producing 20 million vehicles a year by 2030 in its latest impact report released Thursday, another sign that the company is moving away from electric vehicles and shifting its focus to robotaxis. The company is accelerating its pivot to bet on breakthroughs in artificial intelligence to drive new revenue growth.
Despite production cuts and recent layoffs at Tesla’s sales and charging divisions in China, the company still aims to sell 600,000 to 700,000 vehicles in China in 2024, out of the 2 million EVs it plans to sell worldwide, unchanged compared to early 2024 targets. year, a separate source said. The source did not want to be identified because he was not authorized to speak to the media.
In April, Tesla cut Model Y prices in China to the lowest level since the model was first launched in the country in 2021, while offering a zero-interest financing scheme for Model 3 buyers to boost sales.
Tesla’s share of the overall market for electric vehicles and plug-in hybrids in China fell to 6.8% in the first four months of this year from 7.8% for all of 2023, when it sold 603,664 vehicles in the country, according to the China Passenger Car Association. .
Homegrown BYD (SZ:) led the segment in China with a 34.3% share in the first four months, down from 35% for all of 2023.