Tesla (TSLA) shares moved lower Monday following reports that the carmaker will reduce output at its key China factory amid fading demand in the world's biggest EV market.
Bloomberg reported Monday that Tesla is planning to cut production volumes at its Shanghai 'gigafactoy', which typically makes around 85,000 cars each month, by as much as 20% in December. Reuters reported planned reductions of more than 20% for Tesla's Model Y.
The move would mark the first time Tesla has voluntarily lowered output levels since the factory was opened in 2018, although Covid restrictions and scheduled maintenance clipped production earlier this year.
In late October, Tesla cut prices for its China-made cars for the first time this year, just days after its third quarter earnings report echoed the impact of rising production costs and indicating narrowing profit margins for the world's most-valuable car company.
Nonetheless, price cuts provided a big boost to Tesla's November sales tally, with overall shipments rising more than 90% from last year to a record 100,291 vehicles, according to data revealed Monday by the China Passenger Car Association.
The impressive November sales, however, were also clouded by the fact that Tesla's main China-based rival, BYD, sold nearly 230,00 cars over the same period, making it the biggest-selling brand in the world's larges electric vehicle market.
Tesla shares were marked 5.44% lower in early afternoon trading Monday to change hands at $183.88 each, a move that extends the stock's year-to-date decline to around 54%.
