Tesla is reportedly reducing production output at its Giga Shanghai plant for the Model 3 and Model Y in response to the competitive and diverse electric vehicle market in China. The company aims to align production with demand and is adjusting work schedules accordingly. With increasing competition and consumer focus on affordability, Tesla is working on a next-generation platform to lower vehicle costs, but expects a slower growth rate until the introduction of the new EV in late 2025. Despite previously raising Giga Shanghai's annual capacity estimate, recent figures show a decrease in insurance registrations year-over-year.
Tesla China's sales of Giga Shanghai-made vehicles declined by 18.87% year-over-year in February 2024, in line with a general trend in the country's automotive sector during the Chinese New Year holiday. The decrease, totaling 60,365 vehicles, mirrored similar trends seen in other automakers such as BYD, Nio, and Xpeng. Despite the decline, Tesla's Giga Shanghai facility remains a key production hub, with an annual capacity of over 950,000 vehicles, catering to both domestic and international markets.
Tesla's Giga Shanghai factory saw a 19% year-over-year decrease in overall wholesale vehicle shipments of its Made-in-China Model 3 and Model Y cars in February 2024, amounting to 60,365 units, attributed to the Chinese New Year holiday falling in February this year. Despite the drop, the plant exceeded 60,000 units, slightly beating its 2022 result, and the total wholesale sales for the year so far have exceeded 131,000 units, showing a 6% decrease compared to the previous year. The year 2024 will be crucial for Tesla's growth in the competitive Chinese EV market, with anticipation for a major refresh of the Model Y and ongoing price wars.
Tesla China recorded over 18,000 new vehicle insurance registrations in the third week of December, indicating a strong focus on the domestic market. This represents an 18.83% increase from the previous week and brings the total registrations for December to around 41,700. With two weeks remaining in the quarter, Tesla China is on track to surpass its previous domestic delivery record and contribute significantly to the company's goal of delivering 1,800,000 vehicles this year.
Tesla's sales in China continue to surge, with the company selling over 80,000 units in August, marking a 31% increase compared to the previous month. From January to August, Tesla China sold a total of 624,983 units. The company's strong sales are attributed to price cuts and increased customer traffic. Despite a truce signed to end the EV price war, Tesla lowered the price of certain models, prompting other automakers like Volkswagen SAIC to follow suit.
Tesla China set a new wholesale record by selling 93,680 Giga Shanghai-made vehicles in June, surpassing the previous record of 88,869 vehicles in March. This represents an 18.72% increase from the same period last year and a 20.57% improvement from May. In Q2, Tesla China sold 247,217 vehicles, accounting for 53% of the automaker's global deliveries. Tesla's Q2 vehicle production and delivery report revealed a total of 466,140 vehicles delivered worldwide, exceeding market expectations. The Model 3 and Model Y comprised 96% of Tesla's total deliveries, while the Model S and Model X also saw strong sales. Gigafactory Shanghai contributed 53.6% of Tesla's global deliveries in the first half of 2023.
Elon Musk visited Tesla's Giga Shanghai and praised the work ethic and productivity of his executive team and employees there. He emphasized the positive energy and drive to get things done at the factory, which produces Tesla's electric cars and SUVs for the domestic market and for export. Musk also expressed his admiration for China's adoption of EVs and the impact it will have on the rest of the world.
Elon Musk has completed his two-day trip to China, during which he visited Tesla's biggest production hub, met with government ministers, and dined with the chairman of battery supplier Contemporary Amperex Technology Co Ltd. Musk's visit was met with praise from the Chinese public, but he has yet to make any public statements about his trip. His private jet departed from Shanghai for Austin, Texas, where Tesla's global headquarters is located.
