AUTO Tesla

Tesla temporarily discontinued the Model S and Model X production until early 2021 due to low demand

Tesla’s Model S and Model X production lines will begin to cease operations on December 24 through January 11, 2021, as production output has exceeded market demand.

Tesla informed employees of the plans last Friday (December 11), via email. Affected employees will be paid one week (plus paid holidays) for a period of two and a half weeks.

In addition, workers can cooperate with other departments to earn extra income during the leave if they want.

Tesla delivered only 15,200 Model X and Model S units, out of a total of 139,300 vehicles to global consumers.

In the third quarter, Tesla delivered only 15,200 Model X and Model S units, out of a total of 139,300 vehicles to global consumers.

According to an internal email to employees, Tesla executives rated market demand for their electric cars “slightly higher than supply”, meaning “cheap” Model 3 sedans and The Model Y mid-size SUV is still selling well.

“Tesla is fortunate to have the high-end problem that market demand is slightly higher than output this quarter,” said Ceo Tesla billionaire Elon Musk.

It is possible that the production suspension is related to the needs of the market, but not quite according to what the email message Tesla sent to its employees. According to a CNBC report, Tesla’s third quarter figures showed little interest in the Model S and X models, which account for just 11% of the company’s total sales since January. 7 to September.

In particular, demand for low-cost electric cars has long outstripped luxury lines. In the third quarter of 2020, the American electric car company delivered only 15,200 Model X and Model S units, out of a total of 139,300 cars to global consumers.

The readiness to stop production of two high-end models also shows that Tesla has changed its electric car strategy. Even in the early days of the Model 3, the Model S and X models still played a very important role in Tesla’s product portfolio. Now, they are classified in the group of “strange” products – only meeting the needs of a few users.

Tesla itself has recently focused on investing efforts in cars in the mainstream segment, although this group of cars still has a slightly higher price than the general ground. In the next few years, the company also expects to be able to launch new generation electric cars with prices from only $ 25,000 (in the US), which is as cheap as 2/3 of the current Model 3.

Earlier in 2018 Tesla made a similar move, When it temporarily discontinued Model 3 production and the reason given was due to generally high demand. Although Tesla claimed that a production stoppage, which occurred in April, had been planned since January, reports at the time revealed that the employees on the production line were taken by surprise. This state and forced to use PTO or take unpaid leave.

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