Tesla China shipments slump in December amid production cuts
DELIVERIES from Tesla’s Shanghai factory slumped in December after a record November, as production was temporarily suspended due to equipment upgrades and lacklustre consumer demand.
The Texas-based company shipped just 55,796 China-made vehicles last month, almost half the month prior, as indicated by preliminary data from China’s Passenger Car Association (PCA) on Thursday (Jan 5). The PCA did not provide a breakdown of the number of cars that entered the domestic market and the number exported.
That brings the total number of electric vehicles (EVs) made by Tesla in China to 710,865 for 2022, or around 54 per cent of the company’s worldwide sales of 1.3 million. Tesla increased global deliveries by 40 per cent last year, shy of the 50 per cent average annual growth rate it is expecting to achieve over multiple years.
Despite rolling out a slew of purchase incentives in China, including price cuts and insurance subsidies, Tesla voluntarily reduced production at its Shanghai plant for the first time last month and suspended output as of Dec 25. This came amid production-line upgrades and slowing demand.
While workers got back into the regular swing of things this week, the carmaker is going to let employees take at least eight days off during the Chinese New Year holidays to finish the upgrades, Bloomberg reported.
Tesla’s global deliveries missed estimates for a third straight quarter, prompting JPMorgan Chase analyst Ryan Brinkman to note that the EV maker’s year-on-year growth is “likely to decline each year from here on out”.
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In China, the world’s biggest electric car market, Tesla is also facing intensifying competition from local rivals such as BYD and Nio.
BYD reported annual sales of new-energy vehicles (NEVs), which includes pure electric cars as well as hybrids, of 1.9 million units in 2022, up from just 603,783 a year earlier. Of those, more than 910,000 were battery electric cars.
Nio founder and chief executive officer William Li said last month that EV makers in China may face a challenging first half, as state subsidies are phased out and supply chains and consumer confidence take time to recover from the pandemic.
Some competitors like Xpeng have said that they will compensate buyers for the lost subsidies; Tesla has opted to extend its insurance cover in an attempt to spur demand.
Overall retail sales of passenger vehicles in China rose to 2.4 million units in December, up 47 per cent from a month earlier, preliminary PCA data released on Wednesday showed. With the full year’s figures in, this meant that retail passenger car sales in 2022 rose 1.8 per cent to 20.7 million.
On Thursday, the PCA estimated that total NEV deliveries in December would be around 730,000 units, up 45 per cent from December 2021. It now expects total NEV wholesales for 2022 to be around 6.49 million units, slightly lower than the 6.5 million initially forecast. BLOOMBERG
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