Tesla suspended production at its Shanghai Giga plant on Saturday, according to an internal notice and two people with knowledge of the situation, which led to the suspension of most of the scheduled shifts at the Shanghai Giga plant for the last week of December.
The report said Tesla's Shanghai Giga plant canceled its morning shift, telling all workers at the manufacturing center only that they could begin their break, but gave no reason.
The source said that the adjustment was made due to a significant drop in orders, which was part of Tesla's previous plan to reduce production by 30 percent, and that the suspension would reduce production of the Model Y by about 30 percent compared to November.
In fact, it was reported not long ago that Tesla plans to reduce the capacity of the Shanghai Giga plant by 20%, in addition to suspending the production of Model Y at the end of this month, Tesla Shanghai plant.
On December 7, news broke that Tesla was planning to reduce the capacity of the Shanghai Giga plant by 20 percent, saying it was the first time Tesla had voluntarily reduced production at the Shanghai Giga plant. At the time, sources familiar with the matter said the move was related to the fact that demand in China had not met Tesla's expectations and was also a decision made by Tesla after evaluating its recent performance in the Chinese market and that Tesla had enough flexibility to increase production if demand increased. The news was later officially denied by Tesla, which said: " Reports that the company's Shanghai Giga plant will reduce production are untrue, and the production pace at Tesla's Shanghai Giga plant is all normal".
On December 9, an internal memo revealed that Tesla's Shanghai Giga plant will suspend production of Model Y models from December 25, 2022 to January 1, 2023. Tesla is aiming to produce just over 20,000 Model Ys in the last three weeks of December, including the week of this upcoming production suspension. By way of comparison, Model Y production remained at around 13,000 units per week in November, which equates to 39,000 units in three weeks. People familiar with the matter also said at the time that the suspension of Model Y production was part of Tesla's previous plan to reduce production by 30 percent, and that the suspension would reduce Model Y production by about 30 percent from November. At the same time, a message that "Tesla will shorten the working hours of the production line employees at the Shanghai Giga plant as early as next Monday and has delayed the start of some new employees" also circulated online. But this news, Tesla internal staff responded that the news is not true and said: " Why to shut down production? This is a rumor." And a week ago, Tesla sources also said the shutdown is a rumor.
In addition, it is worth noting that after entering the fourth quarter, Tesla has staged a rare series of price cuts in the Chinese market.
First, the Model 3 price was reduced by up to $2,600, and the Model Y price was reduced by up to $5,300, followed by a $570 insurance offer, 20,000 bonus points (redeemable for 3,100 charging miles), free 90-day auto-assisted driving and other benefits. And on December 7, customers will also receive a further $850 subsidy.
For Tesla's successive price cuts, some people believe that it is Tesla's declining orders in China, which is also related to the news of Tesla's factory being exposed to production shutdown. However, Tesla's order status in the end, we still have to wait for the December delivery data to be released to know.