Production increase at Shanghai facility ‘likely indicates stronger demand’ By Investing.com

Despite earlier reports of production cuts, Tesla’s (TSLA) Shanghai Gigafactory is now operating at full capacity, according to a Chinese outlet Beijing News Shell Finance which visited the plant on July 15.

This update follows earlier concerns about potential production reductions at the Shanghai plant. In May, Reuters reported that Tesla (NASDAQ:) intended to cut production by at least 20% between March and June 2024.

During this period, Tesla China did not comment, and both new car registrations and export volumes were lower than in the same period in 2023.

However, with the start of the third quarter, Tesla appears to be ramping up production to meet its year-end goals. CEO Elon Musk has previously indicated that the company aims to exceed last year’s car sales figures, a target that relies heavily on the Shanghai factory operating at full capacity.

Barclays analysts said the production increase “indicates stronger demand, assuming limited inventory build,” implying a stronger second half of the year and reducing risk of negative year-over-year volume.

The report also noted an impressive automation level at Shanghai Gigafactory. The final assembly workshop features a vertically stacked, dual-line configuration, where vertical elevators transport doors, bodies, and other components, saving nearly 100 meters of production line space.

Furthermore, the four workshops are interconnected, facilitating efficient movement of manufactured parts within the facility.

Per the report, this high degree of automation results in a 95% fully automated production across the factory, with the welding workshop nearing complete automation.

A new Model Y car is reportedly completed on the production line approximately every 30 seconds.