Tesla Inc. has made adjustments to its electric car production at its plant in China due to sluggish growth in new-energy vehicle sales and intense competition in the world’s largest automobile market. Here are the key points:

1. Production Reduction: Earlier this month, Tesla instructed employees at its Shanghai facility to reduce production of both the Model Y sport utility vehicle and the Model 3 sedan (the two types it manufactures in China). The change involves working five days a week instead of the usual 6.5 days.

2. Challenges in China: Tesla faces stiff competition in China, not only from homegrown competitor BYD Co., but also from other electric vehicle manufacturers producing more affordable and technologically advanced vehicles. Tesla primarily relies on two models unveiled prior to 2020—the Model 3 sedan and the Model Y—to compete in the Chinese market.

3. Slowing Demand: Demand for electric cars is slowing not only in China but also in other major regions like the US and Europe. Tesla exports tens of thousands of vehicles into other parts of Asia and Europe every month, in addition to producing cars for domestic consumption in its Shanghai factory.

4. Production Limits: Some production lines at Tesla’s Shanghai plant, including the battery workshops, are subject to longer suspensions. The company has informed staff and suppliers to be prepared for extended production limits through April. Additionally, China's upcoming Tomb Sweeping Day holiday may contribute to a quieter time for consumption.

5. Sales Data: In the first two months of 2024, Tesla delivered 131,812 vehicles in China, which represents a 6% decrease compared to the same period last year.

Despite these challenges, Tesla continues to navigate the evolving landscape of the electric vehicle market in China. The company's decisions reflect the complexities of balancing production, demand, and competition in this dynamic industry.