Tesla has reportedly scaled back its electric vehicle production in China due to slowing growth in new energy vehicle sales and intensifying competition in the country’s auto market.
The electric vehicle maker fell more than 3% in pre-market trading on Friday, March 22nd.
According to Bloomberg, the company has adjusted employee working hours at its Shanghai factory from six and a half days a week to five days a week, affecting the production of its Model Y SUV and Model 3 sedan.
The change was said to have been implemented earlier this month and it is unclear when production levels will return to normal.
While overall passenger car sales in China grew 17% and new energy vehicle sales grew 37.5% in the first two months of this year, Tesla’s shipments fell from the same period last year.
Elon Musk’s automaker faces increasing competition in China, not only from local rival BYD but also from companies churning out more affordable, higher-tech cars. Other electric vehicle manufacturers.
Tesla’s current sales rely on two models launched before 2020: the Model 3 and Model Y, which they have given minor updates to help compete in the market.
Additionally, Tesla faces a broader slowdown in demand for electric vehicles not just in China but also in the United States and Europe.
