Tesla stops production at the factory in Shanghai for a planned break

Tesla suspended production at its Shanghai factory on Saturday, underscoring an earlier plan to halt most work at the plant in the last week of December, Reuters reported on Saturday.

Reuters reported earlier this month that the electric car giant planned to halt production of the Model Y at the plant from December 25 to January 1.

The suspension comes amid a growing wave of infections after China eased its zero-Covid policy earlier this month, a swift move hailed by businesses and the public, but Covid cases are rising fast, filling hospitals and emptying pharmacy shelves.

TeslaTSLA,
-1.76%
is also struggling with high inventory levels as its second-largest market braces for a downturn.

The factory’s suspension of Model Y assembly at the end of the month would be part of a planned production cut of about 30% for the month for the model, Tesla’s best-selling model, at the end of the month at the Shanghai plant.

The Shanghai factory, the main production center for Elon Musk’s electric car company, maintained normal operations in the last week of December last year.

Tesla stock has reached 55% of its value in the past three months. Two issues weighed heavily on stocks: CEO Elon Musk’s handling of social media platform Twitter after taking it private hurt investor sentiment and widespread anxiety over weakening demand for electric vehicles.

See: Tesla short sellers have raised nearly $14 billion since Elon Musk agreed to buy Twitter, making Tesla the most profitable after 2022

Car factories usually take breaks during holidays. Some GM GMs,
+0.89%
factories will be closed next week, and Ford Motor F,
+0.44%
is also taking a vacation, Barron’s reported.

Wait times for new Tesla vehicles are falling, and Wall Street is cutting deliveries in the fourth quarter. The Street now expects about 420,000 units to be sold in the fourth quarter, up from about 440,000 a few weeks ago.

Also see: Here are the Chinese stories to watch in 2023

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