Tesla cuts Model Y output for December at its Shanghai plant

Tesla plans to cut December output of the Model Y at its Shanghai plant by more than 20% from the previous month, two people with knowledge of electric vehicle (EV) giant's production plan said on Monday.

Tesla did not immediately respond to a request for comment on the planned cut, first reported by Bloomberg, and Reuters was unable to immediately ascertain the reason for reduction.

Inventory levels at Tesla's Shanghai plant rose sharply after it completed an upgrade of the manufacturing facilities in summer, with EV inventory increasing at its fastest pace ever in October.

The US automaker has cut prices for Model 3 and Model Y cars by up to 9% in China and offered insurance incentives, which helped boost the November sales of its China-made cars by 40% from October and 89.7% more compared to a year ago.

Tesla delivered 100,291 China-made EVs in November, the highest monthly sales since its Shanghai factory opened in late 2020, Xinhua reported on Monday citing Tesla.

Tesla's high inventory levels in Shanghai come as China's auto market faces slowing demand and disruptions to local supply chains.

Uncertainty over when China will make significant move to relax its "dynamic zero-Covid" strategy have clouded the outlook for the world's largest car market, though some Chinese cities have taken steps to ease some restrictions following protests in recent weeks.

Globally, Tesla had planned to push production of the Model Y and Model 3 EVs sharply higher in the fourth quarter as newer factories in Austin, Texas and Berlin ramp production, Reuters reported in September.

The company is planning to start production of a revamped version of Model 3 in the third quarter of 2023 in Shanghai, as it aims to cut production costs and boost the appeal of the five-year-old electric sedan.

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