Tesla Inc (NASDAQ: TSLA) Expands Production Capacity in Shanghai

Tesla Inc (NASDAQ: TSLA) announced that it has cut back on delivery waiting time for its Model Y and Model 3 vehicles in China. This announcement comes after the company announced that it had reduced production time at its Shanghai plant by improving production lines.

Tesla reduces car wait times

Tesla’s China buyers previously had to wait 24 weeks after ordering the best-selling model to receive it. The new wait times mean they will receive the model Y vehicles in about 4 to 8 weeks. Model 3 sedans and SUVs will arrive in 12 to 20 weeks. The company first made this announcement on its Chinese website.

In addition, the company generally delivers its cars to its Chinese market in the second half of a quarter. However, this change means that the process will also be sped up. The upgrade to the Shanghai plant will also allow the company to increase its output of the model 3 and model Y vehicles to about 22,000 cars weekly.

Tesla faces challenges with production

According to the company’s CEO, Elon Musk, the company faces a more significant challenge with production than demand. As a result, Tesla is trying to increase its production in Texas and Berlin. He adds that production difficulties in the two months of the Shanghai COVID-19 lockdown hit the company’s revenue.

While the upgrade has been good for Tesla, the work that went into it also disrupted production. In July, the company’s regional sales went down by 64%. Fortunately, Tesla might recover just in time to leverage the increased demand for electric vehicles in China. Many car makers are trying to transition to electric vehicles as the demand for environmentally friendly products increases.

The transition could be simple for Tesla, which was already an electric car maker. Additionally, the Shanghai plant is the company’s most prominent manufacturer, and the upgrade could enable it to produce even more vehicles positioning it as a leader in the electric vehicle space.

Due to delivery backlogs, the company hasn’t been taking new orders for the Model 3 Long Range vehicles in the U.S and Canada and the Cyber truck outside North America.

 

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