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Tesla shelves plan to build second assembly line at Shanghai Gigafactory amid weak demand for premium electric vehicles in China
- Tesla does not expect a near-term volume increase at its Shanghai Gigafactory, which it says ‘has been running near full capacity for several months’
- The company’s statement validated earlier media reports about its decision to put off building another assembly line inside that production complex
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Daniel Renin Shanghai
Tesla confirmed that there are no plans to increase capacity at its Shanghai Gigafactory, as the US carmaker grapples with weakening demand in the world’s largest electric vehicle (EV) market.
“Production and delivery challenges in 2022 were largely concentrated in China,” the Texas-based EV giant said in a statement after reporting record quarterly profit for the three months ended December 31. “Since our Shanghai factory has been successfully running near full capacity for several months, we do not expect meaningful sequential volume increase in the near term.”
The statement validated media reports earlier this month about the premium electric carmaker’s decision to put off building another assembly line at its Gigafactory 3 complex in Shanghai’s Lingang free-trade zone because of a lacklustre sales outlook.
On January 13, the Post reported that Tesla put on hold plans for a second assembly line after it failed to receive approval from Chinese authorities. The new line was expected to double the Shanghai Gigafactory’s capacity to 2 million units a year.
Tesla started drawing up plans to expand its Shanghai plant early last year amid strong domestic sales of its locally built Model 3 and Model Y EVs.
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