Tesla Scales Back Production by 20%

Written by Camilla Jessen

May.31 - 2024 11:30 AM CET

Tesla has announced a significant reduction in production.

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Tesla has announced a large-scale reduction in production at its largest manufacturing hub in Shanghai, China, which has the capacity to produce over 950,000 vehicles annually.

This strategic cutback is reportedly due to declining demand and increasing competition within the Chinese market.

Cuts in Shanghai

New insights from Reuters reveal that Tesla is reducing operations at its Shanghai factory by 20%.

This decision follows a noticeable decline in production numbers reported by the China Association of Automobile Manufacturers, with Tesla’s production dropping by 17.7% in March and 33% in April year-over-year.

This decline has prompted Tesla to adjust production to current market conditions, and the Shanghai facility will soon experience the consequences of these cutbacks.

Despite these challenges, Tesla still aims to sell at least 600,000 cars in China this year, despite the recent production cuts.

There are no reports of similar reductions at Tesla's other factories, either in the United States or at the plant outside Berlin, which is Tesla's only production facility in Europe.

Recent Challenges

Earlier this year, Tesla presented an annual report that fell far short of expectations, disappointing many shareholders.

Meanwhile, the company is working to get a salary package of $60 billion approved for CEO Elon Musk.

Tesla has also encountered challenges at its European factory, where environmental activists claimed responsibility for an attack on the facility earlier this year.

This has added further uncertainty about future production levels.

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