This indicates Giga Shanghai currently has ample production capacity, with the order backlog largely cleared.
Historically, when Tesla’s delivery wait times in China reach shortest point, it is typically followed by new market initiatives.
(File photo shows a Tesla Model 3. Image credit: CnEVPost)
Tesla (NASDAQ: TSLA) vehicle delivery wait times in China have dropped to historic lows, hinting at abundant production capacity at the Shanghai factory.
As of February 26, estimated delivery times for all versions of the Model 3 sedan and Model Y SUV on Tesla China’s official website have been reduced to 1-3 weeks, according to CnEVPost’s daily monitoring.
This delivery cycle represents a significant reduction from the several weeks or even two months seen late last year and early this year, indicating that Giga Shanghai currently has ample production capacity and has largely cleared its backlog of orders.
To stimulate market demand while ramping up production, Tesla announced earlier today that it would extend the validity period of its 7-year ultra-low-interest and 5-year interest-free financing purchase plan until March 31. This marks the second time this year the company has extended this policy.
Meanwhile, the competitive landscape in China’s market is shifting. Against a backdrop where regulators discourage direct, destructive price wars, automakers are increasingly turning to more lenient auto consumer finance policies.
This includes China’s largest new energy vehicle (NEV) maker BYD (HKG: 1211, OTCMKTS: BYDDY), as well as Nio Inc (NYSE: NIO, HKG: 9866), Xpeng (NYSE: XPEV, HKG: 9868), and Li Auto (NASDAQ: LI, HKG: 2015), have all followed suit with similar extended loan policies.
The dramatic shortening of delivery cycles has drawn attention. Historically, when Tesla’s delivery wait times in China reach their shortest point, it typically precedes new market initiatives.
For instance, on January 19, 2024, after both Model 3 and Model Y delivery cycles were reduced to 1-3 weeks, Tesla announced a RMB 10,000 ($1,460) instant discount on Model Y final payments on November 25 of the same year.
This marks Tesla’s second extension of its 7-year low-interest financing plan this year, following its unconventional launch of the promotion on January 6.
($1 = RMB 6.8403)
