WionDrive News Desk 
TESLA has reduced production of its best-selling Model Y electric vehicle by a double-digit percentage at its Shanghai plant since March. This move aims to address weakening demand for the US automaker’s ageing model in China, its second-largest market, where the majority of cars produced at the Shanghai plant are sold. The reduction comes amidst a fierce price war among electric vehicle (EV) makers in China due to an economic slowdown.
The Shanghai plant, Tesla’s largest manufacturing hub globally, planned to cut Model Y output by at least 20% during the March to June period, according to an unnamed source familiar with the matter.
Data from the China Association of Automobile Manufacturers (CAAM) showed that Model Y output in China stood at 49,498 units in March and 36,610 in April, 17.7 per cent and 33 per cent lower, respectively, compared to the same period last year.
In total, Tesla produced 287,359 units of Model Y and Model 3 cars in China in the first four months, 5% lower than the same period in 2022, with Model 3 output 10 per cent higher, according to CAAM data.
It remains unclear whether the output cut will extend to the second half of the year or to the Model 3, and if Tesla’s plants in the United States and Germany have also implemented similar production cuts.
Tesla has omitted its goal of delivering 20 million vehicles annually by 2030 in its latest impact report published on Thursday (May 23), indicating the company’s shift away from electric cars as it focuses on robotaxis. Tesla has been accelerating its pivot to bet on a breakthrough in artificial intelligence to drive new revenue growth.
Despite the output cuts and recent layoffs at Tesla’s China sales and charging service teams, the company still aims to sell 600,000 to 700,000 cars in China in 2024 out of the two million EVs it aims to sell globally, unchanged from the targets set at the beginning of the year, according to another unnamed source.
In April, Tesla cut Model Y prices in China to their lowest levels since the model’s launch in the country in 2021, while offering a zero-interest financing scheme for Model 3 buyers to boost sales.
Tesla’s share in China’s overall pure electric and plug-in hybrid market has declined to 6.8 per cent in the first four months of this year from 7.8 per cent in all of 2022, when it sold 603,664 cars in the country, according to the China Passenger Car Association. The domestic automaker BYD led the segment in China with a 34.3 per cent share for the first four months, down from 35 per cent for the whole of 2022.
