Tesla (NASDAQ: TSLA) faced a decline in sales of China-made vehicles in January, as the Chinese New Year holiday impacted production and deliveries, a trend seen across Chinese electric vehicle (EV) makers.
According to data released by the China Passenger Car Association (CPCA) today, Tesla China sold 63,238 vehicles in January, including those sold in China and those exported from China to overseas markets. This figure represents a decrease of 11.49 percent from the previous year’s sales of 71,447 vehicles and a 32.56 percent drop from December’s sales of 93,766 vehicles.
The Chinese New Year holiday, which took place from January 28 to February 4 this year, traditionally leads to a significant decrease in production and deliveries due to the one-week break. Tesla’s Shanghai factory, which produces the Model 3 sedan and Model Y crossover for both local customers and export markets, was affected by this holiday disruption.
In a bid to optimize its equipment, Tesla had reportedly planned to suspend some of its production lines in Shanghai for about three weeks during the Chinese New Year, as per a previous report. This move was aimed at enhancing the production efficiency of the factory and increasing the output of the new SUV model.
The suspension of production lines included a halt in the production of the revamped Model Y from January 22 to February 14, as well as the closure of a section of the factory producing the Model 3 from January 26 to February 3. These temporary shutdowns were part of Tesla’s strategy to prepare the production lines for increased production of the new Model Y SUV.
In January, Tesla introduced the facelifted five-seat Model Y in China, marking the first major update of a model to be unveiled in the country. The launch of the facelifted Model Y was met with enthusiasm, with over 70,000 orders placed within the first five days of its release, according to local media reports.
On the first working day of the Chinese lunar calendar’s Year of the Snake, Tesla announced an insurance subsidy of RMB 8,000 ($1,100) for all variants of the Model 3 sedan in China, initiating a price war in the EV market.
As Tesla navigates the challenges posed by the Chinese New Year holiday and works towards optimizing its production lines, the company continues to make strategic moves to maintain its competitive edge in the rapidly evolving EV industry.
