Tesla (TSLA, Financial) plans to temporarily suspend some of its new Model Y production lines in China during the Lunar New Year to optimize equipment, according to insiders. This pause is expected to help the company prepare for increased production of the new model. The Model Y is one of Tesla's best-selling vehicles, and the company started accepting orders for the new version recently, with deliveries anticipated in March.
Sources indicate that the affected Model Y production lines will be shut down from around January 22 to February 14. Additionally, another section of Tesla's Shanghai plant that produces the Model 3 will be closed from January 26 to February 3. Stopping production during the Lunar New Year is not unusual for Tesla or any Chinese automaker.
The new Model Y provides a much-needed boost to Tesla's lineup amid fierce competition in the world's largest automotive market. Tesla experienced its first annual decline in global vehicle deliveries in over a decade last year due to weakened demand, narrowly maintaining its lead over BYD as the top seller of all-electric vehicles in 2024.
Notably, the annual output of Tesla's Shanghai factory fell for the first time since mass production began in 2020, reflecting the intensifying competition. Data shows Tesla accounted for about 10.6% of China's battery electric vehicle retail sales in the first eleven months of last year, down from a market share close to 16% in 2020.
