By Michael Elkins
Reuters reports today that electric vehicle giant, Tesla (NASDAQ:TSLA), plans to hold production at its Shanghai plant at about 93% of capacity through the end of the year. The story cites two people with knowledge of the matter.
The sources did not give a reason for the decision not to run the plant at full capacity, though one said the figure was lower than he had expected.
The electric automaker's Shanghai factory was recently upgraded and can produce up to 14,000 Model Ys and 8,000 Model 3s for a maximum of 22,000 vehicles. The company had sought to keep the factory running at full capacity except during the upgrades and the two-month lockdowns earlier this year.
Now, Tesla plans to turn out 20,500 units a week for the rest of the year, for a total of 13,000 Model Ys and 7,500 Model 3s, the sources said.
According to the China Passenger Car Association, Tesla's China sales jumped nearly 60% in the first eight months of this year. However, that pace is weaker than the overall EV market which saw sales more than double in the same period.
Since last month, the company has cut delivery waiting times in China at least four times and began offering an 8,000 yuan rebate to Tesla insurance customers who take delivery between Sept. 16 and 30. Analysts believe that the move aims to lock in more orders as competition in the market continues to rise.
In the next few months, rising competition is expected to intensify a price war among EV makers, said Shi Ji, an analyst at China Merchants Bank International.
Shares of TSLA are up 2.2% in pre-market trading, Tuesday.