Category: China

Tesla Shanghai plant nears completion of production line tuning for revamped Model 3, report says

Prototypes of the revamped Model 3 are currently being tested on the road at 's Shanghai factory over weekends, with the production line doing further refinement work, according to local media.

(Image: Screenshot from a Tesla China video.)

At Tesla's (NASDAQ: TSLA) Shanghai plant, the Model 3's production workshop is currently under a high level of secrecy, but production line tuning is almost complete, local media Jiemian said today, citing an employee of a third-party supplier working at the plant.

Prototypes of the revamped Model 3 are currently being tested on the plant's roads over weekends, with the production line doing further refinement work, the employee said.

Tesla is planning to launch an updated Model 3 to compete more favorably with local Chinese car companies, the report said.

One of Tesla CEO Elon Musk's key trips to China previously was to visit Tesla's Shanghai factory to inspect the new Model 3, the report said.

Musk visited China in late May and toured the Tesla Shanghai factory, which is Tesla's largest factory in the world, producing the Model 3 and Model Y with a current annual capacity of more than 1 million vehicles.

On March 1, Reuters reported that Tesla was working to retool its Shanghai assembly plant for a revamped version of the Model 3, a project codenamed Highland by Tesla.

The Highland version of the Model 3 is expected to go into production in Shanghai in September, the Reuters report said, citing a person familiar with the matter.

With Highland, Tesla aims to cut production costs and boost the appeal of the electric sedan, which debuts in 2017, people involved in the project said, according to the previous Reuters report.

On May 16, Bloomberg reported, citing people familiar with the matter, that Tesla was nearing the final stages before starting trial production of its revamped Model 3 sedan in Shanghai.

The revamped Model 3 is slightly longer, sportier and has a sleeker interior design than earlier versions, those people said, according to the report.

Earlier today, Bloomberg reported that Tesla is laying off some battery production workers at its Shanghai plant, amid steep discounts on cars from all manufacturers.

Earlier this week, Tesla began notifying some employees on the battery assembly line at the first phase of its plant in Shanghai about the layoffs, the report said.

Jiemian's report today said two Tesla factory floor employees in Shanghai confirmed the information, but they were not sure of the percentage of layoffs.

Yesterday, local media outlet Shifang Zhixing reported that the layoffs on Tesla's battery assembly line in phase 1 would exceed 50 percent.

The layoffs are partly due to the US government's ban on subsidies for batteries imported from China, requiring local car companies to use US-made batteries, the report said, citing an insider.

Jiemian's report today cited a person familiar with the matter as saying that the batteries made at Tesla's Shanghai plant are for domestic models and not for North America.

Tesla sells 93,680 China-made vehicles in Jun

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Chinese industry regulator says automakers should not compete with abnormal prices

Auto industry players should not disrupt fair competition with abnormal prices and should avoid cutting prices in a reckless manner, a MIIT official said.

(Image credit: CnEVPost)

Price wars are clearly not what China's main industry regulator wants to see.

An official from China's Ministry of Industry and Information Technology (MIIT) said at the 2023 China Auto Forum in Shanghai on July 6 that participants in the country's auto industry should not compete with abnormal prices, according to a report on state broadcaster CCTV today.

So far this year, the Chinese auto industry has seen the largest wave of price cuts in its history, including more than 100 models from more than 30 brands, some at any cost, the report noted.

In response to the phenomenon, the MIIT source said that the development of China's auto industry has entered a new phase, with new energy vehicles (NEVs) forming a certain lead and auto companies should regulate their marketing activities, the report said.

Auto industry players should not disrupt fair competition with abnormal prices and should avoid reckless price cuts, while strengthening technological innovation and improving product quality, the MIIT official Miao Changxing was quoted as saying in the report.

Yesterday, the China Association of Automobile Manufacturers (CAAM) and 16 major automakers jointly signed a pledge to maintain fair market order in the auto industry.

The 16 car companies include , , , , , SAIC, and Great Wall Motor, who pledged to maintain a fair competition order and not to disrupt the order in the market with abnormal prices.

The initiative is just the beginning, and further restraint on bad behavior, including malicious price cuts, will depend on self-regulation and regulatory means, Fu Bingfeng, executive vice-president and secretary general of the CAAM, was quoted by CCTV in the report today.

Separately, Xu Changming, vice director of the National Information Center, said yesterday at the 2023 China Auto Forum that Tesla's average profit per vehicle is high enough that it has ammunition if it wants to fight price wars.

Tesla has previously cut its price in China by RMB 30,000 yuan ($4,140), and its average profit per vehicle is $10,426, leaving room for a 40,000 yuan price cut if the price war continues, Xu said, according to a video circulating on social media.

The calculation is based only on Tesla's 1.31 million global deliveries last year, and if it reaches its 1.8 million delivery target this year, then costs are expected to fall further, Xu noted.

Tesla's average profit per vehicle is 8.5 times that of BYD, whose figure last year was RMB 8,854 yuan per vehicle, according to Xu.

($1 = RMB 7.2401)

Carmakers, including Tesla, BYD, Nio, Xpeng, Li Auto, pledge to jointly maintain order in China auto market

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Tesla reportedly laying off some battery workers at Shanghai plant

Earlier this week, began notifying some employees on the battery cell assembly lines at the first phase of its plant in Shanghai about that layoff, according to Bloomberg.

(Image: Screenshot from a Tesla China video.)

Tesla (NASDAQ: TSLA) is laying off some battery production workers at its Shanghai plant, amid heavy discounts on cars from all manufacturers, Bloomberg reported today.

Earlier this week, Tesla began notifying some employees on the battery cell assembly lines at the first phase of its plant in Shanghai about the layoffs, the report said, citing people familiar with the matter.

Some employees have been allowed to move to another shop, such as stamping, painting or general assembly, the people said. It's unclear how many battery workers may be let go, or the specific reasons behind the layoffs, according to the report.

Tesla employs about 20,000 people at its Shanghai plant, which can produce about 1 million vehicles a year, the report noted.

While Tesla uses batteries made by LG Energy Solution and in its vehicles, those battery cells must be made into battery modules and packs before they can be installed in the cars, a process that is done for the most part in Tesla's battery workshop.

Some automation equipment that could help replace human labor on the battery production line is in the design and construction stages, one of the people said, according to the report.

The report did not provide more details on the layoff plan, though a local media outlet reported yesterday that more than 50 percent of the phase one battery assembly line workforce would be cut.

The layoffs are partly due to the US government's ban on subsidies for batteries imported from China, requiring local car companies to use US-made batteries, Chinese media outlet Shifang Zhixing said in a report yesterday, citing an insider.

In addition, the ample battery assembly capacity at Tesla's Shanghai plant is also a major reason for the layoffs, according to the report.

The battery assembly line in phase two has a capacity of 870 batteries on a single shift, while the day shift plus the night shift in the two battery plants can provide 3,400 batteries, more than the amount needed for vehicle production, according to the report.

Vehicle manufacturing-related jobs have not been affected by the layoffs yet, after all, Tesla vehicle sales are still strong, the report said.

Tesla sold 93,680 China-made vehicles in June, including exports, the second highest on record after 100,291 in November 2022, according to data released by the China Passenger Car Association (CPCA) on July 4.

Tesla's Shanghai plant produces the Model 3 and Model Y, and their breakdown sales figures are currently unknown.

In May, Tesla sold 42,508 vehicles in China, ranking third in China's new energy vehicle (NEV) market with a 7.3 percent share, according to the CPCA. Tesla's Shanghai plant exported 35,187 vehicles in May.

Model Y retail sales in China in May were 31,054, making it the best-selling SUV in China that month, according to the CPCA's rankings.

From January to May, Model Y retail sales in China were 152,461 units, also the best-selling SUV in China during that period.

Yesterday, 16 car companies, including Tesla, , , and , signed a pledge in Shanghai to jointly maintain order in China's auto market and not to disrupt fair competition with abnormal prices.

Earlier today, Tesla ramped up referral incentives for the Model 3 and Model Y in China to boost sales of the two models.

Tesla to equip revamped Model 3 in China with CATL's new battery, report says

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Tesla ramps up referral incentives for Model 3 and Model Y in China

sold 93,680 China-made vehicles in June, including exports, the second-highest number on record after November 2022's 100,291 vehicles.

(Image credit: CnEVPost)

Tesla (NASDAQ: TSLA) has increased referral incentives in China for the Model 3 and Model Y to boost sales of the two locally produced models.

Starting July 7, Tesla owners who refer others to buy the Model 3 and Model Y will receive an upgraded benefits package, the US electric vehicle (EV) maker said today on Weibo.

The package includes a RMB 3,500 ($410) cash bonus for the purchaser, which can be used against the purchase price, and a free 90-day trial of Enhanced Autopilot (EAP) assisted driving software.

Referrals will be rewarded with 7,000 points that can be redeemed for gifts including a TeslaMic, Model Y for toddlers, or supercharging miles.

Tesla has previously run an owner referral program in China for several years, which offers 1,500 kilometers of free supercharging for both the referrer and the purchaser.

The referral program was discontinued on September 18, 2021, and reinstated on October 24, 2022, but only offered bonus points.

The upgrade to the referral bonus for the Model 3 and Model Y comes on the heels of Tesla's July 1 announcement of an RMB 35,000 to RMB 45,000 discount for the full line of Model S and Model X in China.

The Model S and Model X are not produced in China, and their deliveries here began in late March.

Tesla was also encouraging owners to recommend friends to buy the two models. If a customer buy the Model S and Model X on someone else's referral, they would receive an additional RMB 7,000 bonus, free supercharging benefits for three or six years, and 90 days of free EAP benefits. The referrer will then receive a 48,000-point bonus that can be redeemed for supercharger miles.

Tesla sold 93,680 China-made vehicles in June, including exports, the second highest on record after 100,291 in November 2022, according to data released by the China Passenger Car Association (CPCA) on July 4.

That's up 18.72 percent from 78,906 units a year ago and up 20.57 percent from 77,695 units in May.

Tesla's June sales in China and the breakdown of China-made vehicles exported are expected to be known in the coming days.

($1 = RMB 7.2439)

Tesla offers up to $6,200 discounts for Model S and Model X in China

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China issues new rules that will give automakers 40% fewer credits for each NEV produced

China has revised its dual-credit policy, one of the key drivers of the rapid growth of the NEV industry, and the changes will take effect on August 1.

(Image credit: CnEVPost)

China's so-called dual-credit policy, implemented over the past several years, has been a key driver of the rapid growth of the new energy vehicle (NEV) industry. Now the policy is seeing the latest revisions, with car companies earning fewer credits for producing NEVs.

China's Ministry of Industry and Information Technology (MIIT) today released the latest update to the policy, which will go into effect on August 1.

One of the most significant changes is the average reduction of about 40 percent in credits for standard models of new energy passenger vehicles, according to the MIIT.

After the adjustment, car companies will receive credits for each NEV produced calculated as follows:

For pure electric passenger cars, the credit calculation formula for standard models is 0.0034 x R + 0.2, where R is the range in km.

For plug-in hybrid passenger cars, a standard model's credit is 1.

For fuel cell vehicles, the credit formula for a standard model is 0.05×P, where P is the rated power of the fuel cell system in kW.

The upper limit of the standard model credit for pure electric passenger vehicles is 2.3, and the upper limit of the standard model credit for fuel cell passenger vehicles is 4.

Prior to this adjustment, NEV credits were calculated as follows:

For pure electric passenger vehicles, the standard model credit calculation formula was 0.0056 x R + 0.4.

For plug-in hybrid passenger vehicles, the standard model credit was 1.6.

For fuel cell vehicles, the standard model credit calculation formula is 0.08×P.

The upper limit of standard model credit for pure electric passenger cars is 3.4, and the upper limit of standard model credit for fuel cell passenger cars is 6.

Take a model with a CLTC range of 500 km as an example, before the latest adjustment, a car company could earn 3.2 credits. After August 1, the credit will be 1.9, a reduction of 40.63 percent.

China released the dual-credit policy in 2017, which is known as the " Parallel Management Measures for Average Fuel Consumption of Passenger Vehicle Enterprises and New Energy Vehicle Credits". The policy has been in effect since April 1, 2018.

Automakers that fail to meet the fuel consumption control requirements can offset the negative credits from excessive fuel consumption by generating their own NEV credits, or by purchasing credits from other companies.

If a car company is unable to get its negative credits to zero, then they need to submit a product adjustment plan to the MIIT and set a deadline for compliance.

Until their negative credits are zeroed out, the substandard products cannot be sold to the public.

In essence, this amounts to penalizing car companies that continue to produce vehicles powered entirely by internal combustion engines and using these fines to subsidize the production of NEVs.

In addition to reducing the number of credits generated per NEV produced, the latest adjustments include the establishment of a credit pool management system.

Under this system, when there are too many credits, automakers can voluntarily store positive credits in the pool, which is valid for five years. When the number of credits is too low, they can withdraw their stored positive credits.

BYD, Tesla top winners under China's 'dual credit' policy

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BYD launches Dolphin EV in Singapore

launched the Dolphin in Hong Kong in late May and brought the model to Australia and Brazil in late June.

(Image credit: BYD)

BYD (OTCMKTS: BYDDY) has launched the Dolphin in Singapore as it introduces the compact electric vehicle (EV) to more markets.

The Chinese new energy vehicle (NEV) giant held a launch event for the BYD Dolphin with Singapore dealer Vantage Automotive on July 3, its second all-electric passenger car model offered in the Southeast Asian country after the Atto 3, according to an announcement from the company today.

BYD launched the Atto 3 in Singapore in 2022, and the model was the top-selling all-electric vehicle in the region in the January-May period, according to James Ng, managing director of BYD Singapore.

The BYD Dolphin is expected to be popular with customers of all ages in Singapore and will enter the lives of more Singaporeans, he said.

The BYD Dolphin, which went on sale on August 29, 2021, is an all-electric compact car with a current starting price of RMB 116,800 ($16,120) in China.

The model is the first to be built on BYD's pure electric platform e-Platform 3.0 and is equipped with a blade battery.

The BYD Dolphin currently has a starting price of S$156,888 ($115,990) in Singapore, a price that includes COE (Certificate of Entitlement), which gives residents the right to own and use the vehicle in Singapore.

This is the latest market that the Dolphin has entered, with the model entering the Hong Kong market in late May and Australia and Brazil in late June.

BYD sold 253,046 NEVs in June, up 88.79 percent from 134,036 units in the same month last year and up 5.34 percent from 240,220 units in May, according to data released earlier this month.

In June, BYD sold 10,536 NEVs in overseas markets, up 3.26 percent from 10,203 units in May.

($1 = RMB 7.2458, $1 = S$1.3526)

BYD launches Dolphin in Brazil, enters South African EV market with Atto 3

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Svolt Energy begins construction of battery pack assembly facility in Thailand

The plant will have two production lines for assembling battery modules and packs, with construction expected to be completed by the end of 2023.

(Image credit: Svolt Energy)

Svolt Energy, the battery maker that became independent from Great Wall Motor, has started construction of its battery module and pack plant in Thailand, as the Chinese electric vehicle (EV) industry chain targets international markets.

Svolt Energy held a ceremony on July 5 local time to celebrate the start of construction of the plant based in Sriracha Chonburi, according to an announcement yesterday.

The ceremony was attended by Thai officials, Svolt Energy's chairman and CEO Yang Hongxin, and representatives from Hozon Auto, the Chinese EV company that owns the brand.

Svolt Energy's plant is based on the renovation and upgrade of a locally leased facility with a projected capacity of 60,000 packs per year, according to its announcement.

According to current plans, the plant will have two production lines, one for HEV, PHEV and BEV battery module production and the other for battery pack assembly.

Construction of the plant is expected to be completed by the end of 2023, Svolt Energy said.

While working with existing customers including Great Wall Motor and Hozon, Svolt Energy will also develop new customers and has started business talks with local Thai companies, it said.

The company will also join with local Thai partners to expand into energy storage, lightweight power batteries and battery recycling, Svolt Energy said.

Svolt Energy's announcement did not mention the amount of investment, although last month local media Cailian reported that the battery maker was planning to invest $30 million in the plant.

Svolt Energy was originally Great Wall Motor's power cell division, which began research and development of power cells in 2012.

It became independent from Great Wall Motor in February 2018 and works on next-generation battery materials, cells, modules, packs, BMS, and energy storage technologies.

The battery manufacturer currently has 11 production sites in China and one overseas production site in Heusweiler, Saarland, Germany, according to its website.

Svolt Energy is one of the largest battery manufacturers in China, with 0.35 GWh of batteries installed in May, ranking 11th in the country with a 1.23 percent share, according to the China Automotive Battery Innovation Alliance (CABIA).

Svolt Energy's Dragon Armor Battery makes real-life debut at Shanghai auto show

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