Tesla is boosting production of electric cars at its factory in China

Production at Tesla’s Shanghai factory rebounded in August, a jump needed for the company to meet production targets on Wall Street.

Tesla (Ticker: TSLA) shipped 84,159 units from its Shanghai factory in August, according to local sources. reports Citing data from the China Passenger Car Association. The number rose from 64,285 in July and 76,695 in August 2022.

Production fell in July because Tesla needed to retool the factory. Summer vacation for automakers to upgrade facilities, and for workers to take vacations, is not unusual. CEO Elon Musk mentioned the upgrades on Tesla’s second-quarter July earnings conference call.

The new figure for August is total wholesale shipments, which includes exports to other markets. Domestic sales numbers are usually available a few days after wholesale numbers.

Overall, the new wholesale number reflects strength in both production and strong demand. Most of the Tesla cars sold have been ordered by a real customer because Tesla is their dealer. Traditional automakers sell to dealer networks that don’t own them, who sell them to the public.

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So far in 2023, Tesla has produced about 625,000 vehicles in China, up from about 400,000 during the same period in 2022. Factory capacity has increased, but 2022 has also been affected by COVID-19 lockdowns that have restricted production for the entire Chinese auto industry.

Tesla started manufacturing cars in Shanghai around the end of 2019. The August result is the fourth highest month for the Shanghai factory, which produced 100,291 units in November 2022, a figure that shows how Tesla’s Shanghai factory has grown to a huge scale. There are other large factories, but the typical auto plant produces approximately 500,000 cars annually.

Tesla stock doesn’t really react to the wholesale number. Shares fell 0.2% in pre-market trading, while futures contracts fell on the New York Stock Exchange

Standard & Poor’s 500


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They fell 0.1% and 0.2%, respectively.

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The lack of a reaction is not surprising. The company was expected to ramp up production after the July holiday, which would curb the sequential growth in quarterly deliveries. Wall Street expects about 470,000 Tesla units to be delivered in the third quarter, not much changed from the 467,000 Tesla units achieved in the second quarter.

For the whole of 2023, analysts expect about 1.8 million vehicles to be delivered, including about 500,000 in the fourth quarter. Tesla will deliver about 1.3 million vehicles in 2022.

Shares fell 5.1% on Friday as investors digested the pricing-related news. Tesla introduced its upgraded Model 3 sedan in China and Europe and raised the price of the updated model. This was expected to drive up the share price, but the stock fell anyway. The new Model 3 was widely expected and investors may have been disappointed that it didn’t include more new features.

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It’s also possible that the drop in share prices could also be the result of people buying shares in anticipation of selling the Model 3 news after it went down. Tesla stock rose nearly 20% in the two weeks leading up to the launch.

Also weighing on the share price on Friday was Tesla’s cut in the price of its fully self-driving driver assistance software to $12,000 from $15,000. It also lowered the prices of the lower-volume S and X models.

Going into trading on Tuesday, Tesla stock is up about 99% so far this year.

Write to Al Root at allen.root@dowjones.com

(tags for translation)cars

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