By Michael Elkins
Reuters reports today, citing an internal memo and people with knowledge of the matter, that Tesla (NASDAQ:TSLA) will suspend Model Y assembly at its Shanghai plant between Dec. 25 and Jan. 1.
The interruption of assembly at the end of the month would be part of a cut in planned production of about 30% in the month for the Model Y, Tesla's best-selling model, at the Shanghai factory, the two people said.
Tesla is targeting production of just over 20,000 Model Y vehicles for the last three weeks of December combined, including the week of suspended output, according to the memo. It was not clear how and whether output of the Model 3 would be affected by the planned suspension of output of the Model Y in the last week of the month. The Model Y represents the largest share of production at the Shanghai plant.
Reuters and Bloomberg reported on Monday that Tesla planned to cut December output of the Model Y at its Shanghai plant by more than 20% from November. A Tesla representative had said then the news was "false", without elaborating.
While Beijing made significant relaxations to its zero-COVID policy this week, an auto industry body said on Thursday that demand was weakening faster than expected. Tesla has been cutting prices and offering incentives to buyers in China. It posted record sales for November in China. On Wednesday, it offered a limited-time discount of 6,000 yuan ($860) to buyers in China on some models through the end of 2022.
Shares of TSLA are up 4.42% in mid-day trading on Friday.