Tesla kicked off 2023 with price cuts to its popular Model 3 and Model Y cars in China, leading to a surge in orders for both vehicles. That has had a ripple effect in which Tesla is now planning to increase production at Giga Shanghai to meet the increasing demand.
According to an internal document seen by Reuters, Tesla is planning to increase production to about 20,000 units per week. The increased production is slated for February and March, but the document did not detail how many units of each vehicle will be produced during that time. However if they are able to meet that target it would equate to about 160,000 new Model 3 and Model Y cars rolling off the production lines.
It should be noted that given Giga Shanghai’s production cycles, in which the first half of production in a quarter is mostly for exports, the majority of the cars that will be built during February and March will be for the domestic Chinese market, and not for other markets like Europe, which also saw price cuts last month.
News of an increase in production comes after rumours that Tesla was scaling back production at Giga Shanghai towards the end of last year due to softening demand. In its quarterly shareholder deck published last month Tesla noted that the factory has been “running near full capacity for several months” and that they “do not expect meaningful sequential volume increases in the near term.”
Giga Shanghai remains Tesla’s primary vehicle export hub, and is Tesla’s most productive factory. After production line upgrades last year it now has a production capacity of over 1 million cars per year.