:max_bytes(150000):strip_icc()/GettyImages-2153285300-a2a20a2a52e640db96c34988048807be.jpg "Tesla Reportedly Cuts Output of Best-Selling Model Y in Shanghai")
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Key Takeaways
- Tesla has cut output of the best-selling Model Y at its Shanghai plant amid slowing demand for its cars in China, where domestic rivals have come up with cheaper EVs.
- Data from the China Association of Automobile Manufacturers showed Tesla’s Shanghai factory produced 33% fewer Model Y vehicles in April than the same month last year.
- China is Tesla’s second-largest market after the U.S.
Tesla (TSLA) has slashed production of its best-selling Model Y at its Shanghai plant, according to Reuters, amid slowing demand for its cars in China, where a price war has erupted between the electric vehicle maker and domestic rivals.
The Shanghai plant, Tesla’s biggest manufacturing hub, planned to cut Model Y output by at least 20% between March and June, Reuters said, citing an undisclosed source.
Meanwhile, recent data from the China Association of Automobile Manufacturers (CAAM) appeared to bear out the claim. Tesla produced 36,610 Model Y cars in April, 33% fewer than a year ago, according to CAAM data.
Tesla reportedly slowed down production at its Shanghai facility in March as the EV market’s growth cooled.
China is Tesla’s second-largest market after the U.S. The EV maker reportedly won tentative approval from Chinese regulators last month to deploy its Full Self-Driving (FSD) software. Expanding this service, which Tesla owners can pay a monthly fee for or purchase outright, could significantly enhance the company’s revenue and profit margins, which have suffered in recent quarters after a string of price cuts in the U.S. and abroad.
Tesla’s shares were up 3% at $179.28 as of about 1:30 p.m. ET Friday but were still down more than 27% this year.