After layoffs, Tesla has taken new actions. On May 24th, according to reports, starting from March, Tesla plans to reduce the production of the Shanghai super factory Model Y by at least 20%.
As Tesla’s second largest market after the United States, the Chinese market is crucial for it. The core issue is that in the face of multiple pressures and competition from Chinese new energy vehicle companies, from product strength to price, Tesla has to reconsider its production strategy.
The report mentioned that the factory plans to reduce Model Y production by at least 20% between March and June. In fact, the production data from the past two months already shows a significant downward trend.
According to data from the China Association of Automobile Manufacturers, Tesla China’s production in March and April this year was 49498 and 36610 vehicles, respectively, a year-on-year decrease of 17.7% and 33%.
In the first four months of this year, Tesla produced a total of 287000 Model Y and Model 3 cars in China, a decrease of 5% compared to the same period in 2023. Although the production of Model 3 increased by 10%, the overall decline in production is still significant.
It is worth noting that in order to stimulate sales, Tesla has launched multiple preferential policies in the Chinese market. In April of this year, Tesla lowered the Chinese selling price of Model Y to its lowest level since 2021, and also launched a limited time zero down payment plan for Model 3/Y.
Faced with significant sales challenges, Tesla expressed in its latest impact report that it hopes to replace fossil fuels by selling as many Tesla products as possible, as it did in previous years. However, the 2030 sales target that appeared in both the 2021 and 2022 reports has been removed, which is to sell 20 million cars annually by 2030.