Reuters reported that Tesla plans to implement production cuts at its Shanghai plant in January.

(Reuters file photo)

[Financial Channel/Comprehensive Report] According to an internal timetable seen by Reuters, the electric car manufacturer Tesla (Tesla) plans to implement production cuts at its Shanghai plant in January, which was originally scheduled to begin in December. The production cut plan has been extended to 2023.

According to the plan seen by Reuters, Tesla will produce 17 days between January 3 and 19, 2023, and will suspend production from January 20 to 31 to extend the Lunar New Year holiday.

Tesla did not specify the reasons for the production slowdown in the plan, and it remains unclear whether work outside the Model 3 and Model Y assembly lines at the factory will continue during the planned shutdown.

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Tesla did not immediately respond to reports.

On Tuesday (27th), Tesla’s stock price fell 11.4% to $109.1. Since the beginning of October, Tesla has fallen 56%, mainly because investors are worried about demand including China, and CEO Musk (Elon Musk) selling Tesla stock and buying Twitter (Twitter).

Reuters previously reported that Tesla suspended production at its Shanghai factory on Saturday (24th), bringing forward plans to suspend most of the factory's work in the last week of the year.

In response, Tesla said the report was not entirely correct.

Like other automakers, Tesla is facing sluggish demand in China, the world's largest auto market.

Tesla has cut the prices of Model 3 and Model Y cars by 9% in China, and provided insurance subsidy, hoping to stimulate buying momentum.

Securities firm China Merchants Bank International (CMBI) said in a report released on Tuesday (27th) that Tesla’s retail sales in China from December 1 to 25 were 36,533 vehicles, and the average daily retail sales were higher than the same period in 2021. down 28%.

Judging from the factory production activities in the previous year, the Tesla Shanghai factory will maintain normal operations in the last week of December 2021, and will suspend work for 3 days during the Spring Festival.

The Chinese New Year holiday in 2023 will occur from January 21 to January 27.

The Shanghai factory is Tesla's most important manufacturing center, with about 20,000 employees, accounting for more than half of Tesla's production in the first three quarters of 2022.

The company has determined a target of 50% growth in electric vehicle production and vehicle delivery in 2022, but as Q4 is coming to an end, analysts predict that production will be lower than this target, which should fall around 45%.

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