Tesla halts Shanghai output to expand capacity

Tesla plans to shut down production at its Shanghai plant in China for two weeks in July to make capacity upgrades, according to a Reuters report that cited an internal memo sent by the automaker.

Tesla had planned to increase capacity at the plant to 22,000 vehicles per week, or more than 1 million units per year, earlier this year, but this was delayed by the city’s two-month covid lockdown. The plan includes increasing the capacity of the Model 3 to 8,000 units per week and the Model Y to 14,000 units.

Combined production of the two models at the factory was reported to ramp up to about 17,000 units per week in the third week of June as the company tried to make up for lost production over the past two months. New Model Y customers in Australia currently have to wait until Q1 2023 for delivery, while those in Europe must wait until Q4 2022.

Tesla produced about 484,000 vehicles in China in 2021, or more than half of its global production, of which about 320,000 were sold locally. With costs much lower than in the US, the Chinese branch has helped Tesla become more competitive in global markets, including Asia and Europe.

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