Tesla has been challenging itself in the Chinese market, and now, it achieved a new record of producing over 100,000 cars in a month! This could have been good news, but its stock slumped after the news that it could reduce its output by 20% in December following lower local demand.
Tesla Delivered and Exported a Record 100,291 EVs in China for November 2022
Tesla delivered and exported 100,291 EVs in China, as confirmed by the China Passenger Car Association. However, according to reports, the company could be lowering its Gigafactory Shanghai production output due to China's lower demand.
According to the story by Electrek, this is shocking news because the 100K cars produced is a record 90% up year-over-year and 40% up month-over-month. The article notes that this would have been good news if only it weren't paired with a report saying Tesla could reduce production by about 20%.
Report Says Tesla Could Lower Its Production in China for December Because of Lower Demand
An article by Bloomberg describes how Tesla could lower its production output in China for December due to the lower demand. The news reportedly came from sources that chose to remain anonymous and said they estimated a production reduction of about 20%.
The publication reportedly linked the softening demand of Tesla in China to its decision to reduce production output from its Gigafactory Shanghai plant. This comes after the company tried other techniques in China to stir demand.
Tesla Tries Other Antics in China to Increase Demand for Its EVs
In October, Tesla even reduced the Model 3 and Model Y prices exclusively for China and launched a referral program. Per Electrek, this signifies that "demand wasn't where Tesla needed it to be."
On top of its price drop, Tesla also offered cash rebates that came with the Tesla insurance partners in China. This move resulted in several reports saying that the demand for Tesla in China was down, but the automaker reportedly "tried to squash the rumors."
Tesla Was Not Able to Compete With the Local Top-Selling Car Brand BYD with Over 200K EVs Sold
Despite achieving 100k cars produced in China, Tesla's outcome was not even half of the EV sales by BYD, the top-selling car brand in China. According to Reuters, China's number one company sold 229,942 electric cars, including hybrids and pure EVs.
The data came from the China Merchants Bank International, which shows BYD overtaking other competitors, not just Tesla. Aside from Elon Musk's company, the Chinese top-selling car brand also outplaced Volkswagen.
Should Tesla have continued their production trajectory, it would have had an output of 1.2 million vehicles a year, which could take place two years after starting with the new benchmark. However, this might not be the case, given the fact that, according to reports, the company has decided to cut back on production.
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