Tesla plans to run a scaled-down production program at its Shanghai plant in January, extending until next year the decline in its operations that began this month, according to an internal schedule reviewed by Reuters.
Tesla will operate with reduced production for 17 days, between January 3 and 19, and stop the development of electric vehicles from January 20 to 31 during an extended break for the Chinese New Year, according to the plan seen by Reuters.
Tesla did not specify the reason for the production slowdown in its plan. It was also unclear whether work would continue off the Model 3 and Model Y assembly lines at the plant during scheduled downtime. It has not been an established practice for Tesla to shut down operations for an extended period for Chinese New Year.
Tesla did not immediately respond to a Reuters request for comment.
Tesla suspended production at its Shanghai plant on Saturday, advancing a plan in place to halt most work at the plant by the last week of December, Reuters reported.
Tesla’s latest production cuts in Shanghai come amid a rising tide of infections, after China began gradually lifting its zero COVID policy earlier this month. That move has been welcomed by businesses, although it has disrupted manufacturing operations.
Like other automakers, Tesla has also faced declining demand in China, the world’s biggest auto market. Earlier this month, Tesla offered an additional incentive to buyers who got their hands on the vehicles in December. The company has offered price cuts for Model 3 and Model Y cars of up to 9% in China, plus a subsidy for insurance costs.
The Shanghai factory, the most important manufacturing hub of Elon Musk’s electric vehicle company, maintained normal activity during the last week of December last year and took a three-day break for Chinese New Year.
The period from January 21 to 27, 2023 is a Chinese New Year holiday in China.
Tesla’s Shanghai plant, a complex that employs about 20,000 workers, accounted for more than half of Tesla’s output in the first three quarters of 2022.
Tesla has set a target of 50% growth in electric vehicle production and deliveries by 2022. Analysts expect production to fall short of that target and will be around 45%, according to forecasts for the fourth quarter, which will soon end.