Tesla's trims car output in China as EV sales growth slows; share price dips nearly 4%

Tesla Inc. has reduced production at its plant in China, according to a Bloomberg report, amid sluggish growth in electric vehicle sales and intense competition in the world’s biggest auto market.

The US carmaker earlier this month instructed employees at its Shanghai facility to lower production of both the Model Y and Model 3 — the two vehicles Tesla makes in China — by working five days a week instead of the usual 6 1/2 days, the report said.

The carmaker’s stock — already the worst performer in the S&P 500 Index this year — slumped as much as 3.9% before the start of regular trading Friday, the report added.

While overall passenger-vehicle sales in China increased 17% in the first two months of the year and sales of new-energy vehicles rose 37.5%, Tesla recorded a decline in shipments from the same period a year ago, the Bloomberg report said.

Elon Musk’s carmaker is up against the increasingly stiff competition in China, not only from homegrown competitor BYD Co., but from a raft of other EV manufacturers churning out more affordable and tech-laden vehicles, it added.

Tesla delivered 131,812 vehicles in the first two months of 2024, a 6% drop from the same period a year ago, data released by China’s Passenger Car Association show, the report said, while adding that only 53% of shipments went to the local market, despite price cuts Tesla has been carrying out since the start of the year.