Tesla will produce less of its best-selling electric car Model Y in China, claims report

The largest electric vehicle manufacturer in the world, Tesla, has decided to stop producing its flagship Model Y in China. The news organization reported that the manufacturer of electric vehicles will reduce production of the Model Y by a minimum of 20 percent this year, between March and June. China's top-selling electric vehicle from Tesla is the Model Y. Which up until April of this year accounted for roughly 77 percent of the company's total sales in the nation.

At its Shanghai-based Gigafactory, Tesla produces the Model Y and other electric cars. Outside of its native US market, China is the second-largest electric vehicle manufacturer. Tesla offers the Model 3 electric vehicle for sale in the nation in addition to the Model Y. In recent times, intense competition from Chinese rivals has forced Tesla to engage in a price war to increase sales.

Tesla has not officially confirmed that it has reduced Model Y production in China. However, Amar Ujala quoting a source has claimed that the electric vehicle maker has reduced Model Y production between March and June. Model Y production in China fell to 49,498 units in March and 36,610 units in April, according to data from the China Association of Automobile Manufacturers (CAAM). As of last month, Tesla has manufactured a little more than 2.87 lakh electric cars in China. That is about five percent less compared to the same period last year. It is noteworthy that the production of Model 3 electric vehicles is 10 percent more during this period.

This report comes amid the recent decline in Tesla sales in China. The electric vehicle maker's market share in the electric and plug-in hybrid segments has declined by nearly seven percent in the first four months. Last month, Tesla slashed the price of the Model Y in China to its lowest in 2021. It also offered an interest-free finance scheme on the Model 3 to boost sales. However, Chinese electric vehicle giants like BYD have maintained Tesla's efforts as it leads the electric vehicle segment.

In 2024, Tesla aims to sell more than six million electric vehicles in China. However, if the production reports are true, Tesla may change its annual target. It has also backed down from its global ambition to sell 2 million electric cars a year.