Tesla Shanghai Factory to Halt Model Y Production for 8 Days at Year-End

Interpreted as a Measure to Reduce Model Y Production Volume

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Naju-seok] Electric vehicle manufacturer Tesla is reportedly set to halt production of the Model Y at its Shanghai factory from Christmas through New Year's Day.

On the 9th, major foreign media outlets cited sources reporting this development. It has not been customary for Tesla's Shanghai factory to close between Christmas and New Year's Day.

Sources also explained that this production halt is a measure to reduce Model Y production by about 30%.

Tesla's Shanghai factory, which produces the Model Y and Model 3, is Tesla's most important production facility. According to memos cited in reports, Tesla has set a goal to produce only about 20,000 Model Ys in the remaining three weeks of this month.

Earlier, Bloomberg News also reported, citing sources, that Tesla would reduce Model Y production at the Shanghai factory by more than 20% compared to the previous month. Tesla denied that report.

However, there have been reports that inventory has been accumulating since the expansion of the Shanghai factory. Tesla aimed to reclaim the world's top electric vehicle production spot, lost to Chinese EV maker BYD in the first half of this year, through production line expansion, but inventory levels in October reached an all-time high.

In fact, automobile demand in the Chinese market is rapidly slowing down. The China Association of Automobile Manufacturers stated the day before that passenger car sales in China fell last month for the first time in six months and forecasted that sales next year would also be sluggish.