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Tesla China denies rumors of production cuts at Gigafactory Shanghai

Tesla Model 3 production line in Gigafactory 3, Shanghai, China. (Credit: Tesla)

Tesla China has denied rumors of potential production output cuts at Gigafactory Shanghai. The company’s China division officially stated that several media reports speculating that Tesla would cut production by as much as 20 percent in Shanghai were  “untrue.”

Just hours before Tesla’s announcement of over 100,000 vehicle sales in November in China, a new company record, several media outlets reported the company was weighing its options to potentially trim output at the China plant by 20 percent in December.

The Tesla China production cut rumors began last Friday when Rob Maurer of Tesla Podcast said that the company was considering cutting production by roughly 4,500 units per week, beginning on December 11. Maurer said the news came from a reliable source but that it had not been verified by a second source3, and it was possible it could be untrue.

Bloomberg said, citing people familiar with the matter, that Tesla was set to trim production targets by 20 percent across the plant, without mentioning a specific reason, such as cooling demand. In its report on the situation, Reuters stated that Model Y production at the plant would be trimmed by 20 percent, not vehicle production as a whole.

Following the publication of the reports and Tesla’s sales numbers in China in November, notable bulls called on CEO Elon Musk to make a statement regarding the alleged production cuts, which did not seem to align with typical moves the company makes at the end of the year. After requesting a statement, Tesla China officially denied rumors of the production cuts, stating it was “untrue.”

Tesla has routinely stepped up production rates at its factories toward the end of the year in an attempt to drive delivery numbers up. Competition in China has increased, but Tesla’s demand from countries utilizing China-built Model 3 and Model Y units has not.

Tesla’s most recent indication of non-cooling demand for China-built vehicles came this morning with reports of over 100,000 car sales during the month.

Tesla was the second-best-selling car company in China in November, trailing only BYD, who had a monumental 229,942 units sold in November.

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Tesla China denies rumors of production cuts at Gigafactory Shanghai
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