By Michael Elkins
In an exclusive story, Reuters reported Wednesday that electric vehicle giant Tesla Inc (NASDAQ:TSLA) plans to step up output at its Shanghai plant over the next two months to meet demand ignited by aggressive price cuts on its best-selling models. The report cited a planning memo seen by Reuters and a person with knowledge of the plan.
According to the memo detailing output plans for the factory, Tesla plans to produce, on average, nearly 20,000 units a week at its Shanghai factory in February and March. The accelerated production rate would bring giga Shanghai’s output to roughly its rate in September, when it turned out 82,088 Model 3 and Model Y cars.
In December, the Shanghai plant had cut output by about a third from November, and extended a Lunar New Year holiday period for workers in January, to cope with rising inventory, before its price cuts of between 6% and almost 14% in China. Following the price cuts, CEO Elon Musk mentioned during the 4Q conference call that orders were roughly double production in January after global price cuts.
In the first 29 days in January, Tesla's average daily retail sales in China surged 36% over the corresponding period a year earlier, to 25,686 vehicles, slightly higher than that of major competitor BYD (SZ:002594).
Musk said Tesla's deliveries in 2023 could hit 2 million vehicles, so long as there was no external disruption.
Shares of TSLA were up 1.39% in premarket trading on Wednesday.