By Michael Elkins
Reuters reported today that electric car giant, Tesla (NASDAQ:), plans to keep production at its Shanghai plant at around 93% of capacity through the end of the year. The story cites two people familiar with the matter.
The sources did not give a reason for the decision not to operate the plant at full capacity, although one said the number was lower than expected.
Shanghai Electric Vehicle Factory has been recently upgraded and can produce up to 14,000 Model Y and 8000 Model 3s with a maximum of 22,000 vehicles. The company sought to keep the plant operating at full capacity except during upgrades and a two-month shutdown earlier this year.
Now, Tesla plans to produce 20,500 units per week for the rest of the year, totaling 13,000 Model Y and 7,500 Model 3, sources said.
According to the China Passenger Car Association, Tesla’s sales in China jumped nearly 60% in the first eight months of this year. However, this pace is weaker than the overall electric vehicle market, which has more than doubled sales in the same period.
Since last month, the company has cut delivery waiting times in China at least four times and started offering a discount of 8,000 yuan to Tesla insurance customers who receive between September 16-30. Analysts believe the move is aimed at securing more orders as market competition continues to rise.
In the next few months, increased competition is expected to intensify the price war among electric car makers, said Shi Jie, an analyst at China Merchants Bank International.
TSLA shares were up 2.2% in premarket trading, Tuesday.