No, the Shanghai Gigafactory is not (yet) idle, here’s why
While Tesla’s situation in China is quite worrying, the Shanghai factory has been idle for several weeks. And it should continue even in January, when news broke that it would be closing its doors for a few days. We assess the situation.
If Tesla is doing very well in Europe, with the Model Y dominating the list of best-selling models since the beginning of the year, it is not at all rosy for the American manufacturer. Indeed, its situation in China has been quite worrying for several months now, while demand as well as sales are declining. So much so that it now has a large inventory of new cars to sell, and the manufacturer should bring back the sponsorship program as well as offer big discounts.
Is production discontinued?
However, the Model Y was the second best-selling car in China last November Over 100,291 vehicles It left its factory in Shanghai. This will be a record for the site the most productive of the brand. If all of Tesla’s assembly lines are working at full speed to break the record of one million vehicles delivered by the end of the year, a small grain of sand stops the machine.
Indeed, on December 24, the American agency Reuters announced Tesla was going to stop production at the Gigafactory in Shanghai. Information related disclosureAutomotive Newswhich earlier in the month announced reduced shift times for Chinese factory workers, as well ashiring freeze. In addition, Bloomberg It announced a 20% reduction in Model Y production.
All of this obviously doesn’t bode well for the brand, which is struggling to sell its cars in the U.S. as well despite heavy discounts. And it doesn’t look any better Reuters announcement Production interruption at the Shanghai factory from January 20 to 31. Dates corresponding to Chinese New Year celebrations. According to an internal company source, the site should work for only 17 days from January 3 to 19.
In turn, the spokesperson of the brand wanted to deny this information through the media Caijing.com. According to Tesla’s China division, this break will be shorter, then it will last from January 21 to 28. This would allow workers to stay home for the holidays, but would have nothing to do with the manufacturer’s economic situation. Especially since he ” During this period, some workshops still need to continue working at high speed“.
An uneasy situation
If Tesla wants to be reassured, this announcement confirms it the plant will be idle during this time. This means that there is no need to produce at high speed, which shows us that demand is relatively low. And for good reason, an article Capital it became known to us that last November New car sales in China fell by 9.2%export increased by 56% compared to the same period last year.
Many cars are then sold in Europe, where 20% of cars sold are produced in the Middle Kingdom. Is Tesla cutting China production to focus on Europe? It is absolutely possible. According to the expert Teslarati at the beginning of the month Speeding up the Berlin factory Production of the Model Y will cause a slowdown in the assembly of SUVs in China. And the SUV is doing very well in Europe Best selling electric model in Novemberthere is every interest in producing it on the site.
Especially since the government plans to cancel the environmental bonus for all cars that are not assembled on the Old Continent, such as the Model 3. Therefore, Tesla needs to run the German factory at full speed to fill the European market. As the Gigafactory breaks a new production record, what exactly is it doing? Other manufacturers are also adopting this strategy, such as BYD, which will set up factories on European soil.
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