WASHINGTON —

The world's richest man, Elon Musk, may reduce or suspend Model Y production in December at his electric car gigafactory in Shanghai.


Reuters quoted an internal memo and two people familiar with the matter as saying that assembly of the Model Y electric car would be suspended between Dec. 25 and New Year's Day next year.

According to a Reuters report, Tesla plans to cut its vehicle production target for December by 30% to "just over 20,000 vehicles."


"Tesla's target for Model Y production in the final three weeks of December is just over 20,000 vehicles, including the week during which production was suspended," said an internal memo cited by Reuters.



Tesla did not say whether the plan to suspend production would actually be carried out, or why it would do so. But Reuters reported that Tesla did not suspend electric vehicle production in the last week of December last year.

At the same time, Tesla's sales of electric vehicles in November this year hit a record high, exceeding 100,000 vehicles. Not only are the local sales in China strong, but the vehicle's export performance is also very good.

While sales of Tesla's electric vehicles have skyrocketed in China, the company's offers to customers have also increased. Tesla announced in October this year that it would cut the price of China-made Model 3 and Model Y electric vehicles by 5-9%. In addition to this, there is an incentive of 4,000 yuan (about $573) related to insurance, and a discount of 6,000 yuan (about $860) launched on November 7.

"Inside EVs" (Inside EVs) reported that by the end of this year, Tesla's subsidy of about 11,088 yuan (about 1,600 U.S. dollars) for Chinese-made electric vehicles to customers is about to expire. The measures have led to an increase in the inventory of Chinese-made electric vehicles. Therefore, Tesla's reduction or suspension of production at the Shanghai Gigafactory in the last week of December is only a production adjustment based on the market and inventory. Another factor worth considering is that China enters the long Lunar New Year holiday after the end of the year, and during the long holiday, car sales are usually not good.

"Electric Vehicle Insider" also pointed out that at the end of the year and the beginning of the year, the export potential of Chinese-made electric vehicles is also doubtful, because another European Tesla super factory in Germany is working hard to produce Model Y electric vehicles, so overseas Demand for Chinese-made EVs may not be as strong as it used to be.

According to a report by "Electric Vehicle Insider", Musk has decided to promote Zhu Xiaotong, Tesla's global vice president and head of Greater China, to Tesla's global CEO.


Zhu Xiaotong assisted Tesla in setting up a Gigafactory in Shanghai, making it a major global export hub for Tesla electric vehicles. Zhu Xiaotong not only contributed to the surge in sales of Tesla electric vehicles in China but also set up repair centers and outlets across the country.

Although China's electric vehicle market is hot, and the sales volume of electric vehicles is second to none in the world, foreign companies including Tesla are facing fierce competition from China's local electric vehicle manufacturers.

Skoda, one of Volkswagen's brands headquartered in Czech Mlada-Boleslav, is considering whether to divest its current joint venture factory in China.

"The competition there is very strong, so together with our joint venture partners we will consider the next steps," Skoda Auto Chief Executive Klaus Zellmer told reporters.


Zellmer said Skoda might consider continuing to sell cars in the Chinese market rather than build them there. But the company won't make a final decision on that until next year.