Tesla is on the cusp of tackling what Barclays identifies as a sign of rising demand for its vehicles from the Giga Shanghai plant in China. Recent reports indicate the facility is operating at full capacity, suggesting a surge in vehicle demand.
After a series of reports earlier in the year flagged production volume declines, the tide seems to have turned. Tesla is now driving production at Giga Shanghai to its limits, responding to what appears to be heightened demand in both China and international markets where the plant’s vehicles are exported.
While the automaker has witnessed robust insurance registration numbers, it has also faced increased competition from more affordable electric vehicle (EV) options. However, now that Tesla has cleared the year’s first half, the company appears ready to meet what could be an escalating demand, supported by Chinese media’s confirmation of the factory’s full-capacity operations.
Barclays analysts recently highlighted to investors that this ramp-up in production capacity likely mirrors stronger demand, provided inventory levels remain low. The financial firm stated that the ramped-up production in China “indicates stronger demand,” potentially driving Tesla’s delivery numbers higher in the second half of 2024.
In the first half of the year alone, Tesla has delivered 830,766 vehicles, positioning it to reach an estimated 1.6 million deliveries for 2024. This would mark a slight dip from the 1.81 million vehicle deliveries recorded in 2023.
As stated in Tesla’s Q4 2023 Shareholder Deck, the development of their next-generation platform might result in a “notably lower growth rate” in 2024 compared to the previous year:
“Our company is currently between two major growth waves: the first one began with the global expansion of the Model 3/Y platform, and the next one we believe will be initiated by the global expansion of the next-generation vehicle platform. In 2024, our vehicle volume growth rate may be notably lower than the growth rate achieved in 2023 as our teams work on the launch of the next-generation vehicle at Gigafactory Texas.”
Additionally, Tesla is gearing up to unveil its Robotaxi soon. Initially set for an August launch, the event was delayed due to design changes requested by CEO Elon Musk.
In summary, Tesla’s full-capacity operations at Giga Shanghai signal a strong response to amplified demand, offering a potential boost to their delivery figures in the latter part of 2024. By bridging current operations with the launch of a next-gen platform, Tesla demonstrates its strategic foresight and adaptability in a competitive EV market.
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William Kouch, Editor of Automotive.fyi
