A new report states that Tesla plans to ramp up electric vehicle production at Gigafactory Shanghai to 20,000 units per week after a surge in orders.
After years of claiming that demand was exceeding production capacity, we have seen plenty of evidence late last year that Tesla was starting to have some more serious demand issues.
However, Tesla countered that last month with significant price cuts across its entire lineup in all markets.
The price reductions appear to have worked, as there have been many reports of Tesla’s demand surging in several markets following the adjustment.
In China, there have been rumors that before the price cuts, Tesla has been throttling production output at Gigafactory Shanghai, which is Tesla’s most productive and profitable factory.
Tesla has disputed some of those reports, but the output has gone down in the last few months of the year from a high of over 80,000 units in September.
Now Reuters reports that Tesla is planning to ramp up production at Gigafactory Shanghai following a surge of orders due to the price reductions.
The publication is basing the report on a “planning memo” that it claims to have seen. Reuters reported:
The automaker plans to produce a weekly average of nearly 20,000 units at its Shanghai factory in February and March, according to the memo, which detailed output plans for Tesla’s most productive and profitable manufacturing hub.
The surge in orders justifying this alleged production ramp could come from China, but Tesla Gigafactory Shanghai also exports vehicles to other APAC markets and in Europe.
As I have previously stated, we need to be careful with Reuters’ Tesla reporting. They have had a lot of false and misleading reports about Tesla over the last year.
In this case, they do mention actually seeing a “planning memo” from Tesla, which does give a bit more credibility, but I would still take the report with a grain of salt.
With that said, it makes sense that Tesla’s price cuts would create a surge in orders big enough to justify ramping Shanghai back to full capacity.