Tesla to reduce production of Model Y, its best-selling EV in China: Report
- Model Y is one of the flagship electric vehicles manufactured by the world’s largest EV maker in China, its second largest market outside home base.
World’s largest electric vehicle manufacturer Tesla has reportedly decided to cut down production of its flagship Model Y EV in China. According to a report by news agency Reuters, the EV maker will slash production of the Model Y by at least 20 per cent between March and June this year. Model Y is the best-selling electric car from Tesla in China which contributed nearly 77 per cent of its overall sales in the country till April this year.
Tesla manufactures the Model Y and other electric vehicles at its Gigafactory located in Shanghai. China is the second largest market for the EV maker outside United States, its home base. Besides Model Y, Tesla also sells the Model 3 electric car in the country. In recent times, raging competition from Chinese rivals had forced Tesla to engage in a price war to boost sales.
Tesla has not officially confirmed if it has reduced production of Model Y in China. However, the Reuters report quoted a source claiming that the EV maker has reduced Model Y production between March and June.According to data from the China Association of Automobile Manufacturers (CAAM), Model Y production in China fell to 49,498 units in March and 36,610 units in April. Till last month, Tesla has manufactured a little over 2.87 lakh electric cars in China, which is around five per cent less compared to the same period last year. Interestingly, the production of Model 3 EV is 10 per cent higher during this period.
The report comes amid Tesla’s drop in sales in China recently. The EV maker saw its market share drop by nearly seven per cent in the first four months in the electric and plug-in hybrid segment. Last month, Tesla slashed the price of Model Y in China to its lowest since its debut in 2021. It also offered zero-interest financing scheme on Model 3 to boost sales. However, Chinese EV giants like BYD have kept Tesla’s efforts at bay as it continues to lead the EV segment.
In 2024, Tesla aims to sell more than six lakh electric vehicles in China. However, if reports of production turn out to be true, Tesla may revise its annual outlook. It has also stepped back from its global ambition to sell 20 lakh electric cars in a year by 2030.
First Published Date: 25 May 2024, 08:35 AM IST
