Tesla’s China Production Declines in February

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Tesla’s production in China declined in February, according to data from the China Passenger Car Association (CPCA). The company produced 60,365 vehicles in February, down 18.87% year-over-year and 15.51% month-over-month.

Decline due to Lunar New Year

The decline in production was likely due to the Lunar New Year holiday, which took place in February this year. During the holiday, many factories in China close for a week or more. This year, the holiday fell from February 10 to 17.

Tesla was not the only automaker to experience a decline in production in February. Other automakers, including BYD, NIO, and Xpeng, also reported lower production numbers.

Assembly Line

Photo by BYD

BYD was the hardest hit, with production down 36.84% year-over-year and 39.30% month-over-month. NIO production fell 33.11% year-over-year and 19.12% month-over-month. Xpeng production fell 24.38% year-over-year and 44.91% month-over-month.

Despite the decline in production, Tesla still fared better than its Chinese competitors. The company’s production decline was smaller than the declines reported by BYD, NIO, and Xpeng.

Tesla’s Shanghai Gigafactory remains the company’s largest factory. The factory produced 950,000 Model 3 and Model Y vehicles in 2023. The cars are sold in the local market, but a large number are also exported to other countries.

Despite the February decline, Tesla has already produced more than 132,000 vehicles in China since the beginning of the year. Less than half of those vehicles have been exported.

Tesla is expected to continue to ramp up production at its Shanghai Gigafactory in 2024. The company is reportedly planning to increase production capacity to 2 million vehicles per year.

The Lunar New Year holiday will likely continue to impact production in China in the coming years. The holiday is a major event in China, and it is a time for families to come together. As a result, many factories close for a week or more during the holiday.

Tesla and other automakers will need to find ways to mitigate the impact of the Lunar New Year holiday on production. One way to do this is to build up inventory ahead of the holiday. Another way is to stagger production so that not all factories are closed at the same time.

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