By Michael Elkins
Tesla (NASDAQ:TSLA) is seeing positive movement in early trading on Thursday after the company announced that they were cutting the delivery waiting period for Model 3 and Model Y cars in China.
The waiting time for the rear-wheel drive Model Y sport utility vehicle is now four to eight weeks, while buyers of other versions of the SUV and Model 3 sedans need to wait for 12 to 20 weeks. Tesla previously said a buyer in China had to wait for eight to 24 weeks after placing an order for the best-selling models.
Tesla confirmed the changes on the company’s Chinese website, citing the output ramp-up at its Shanghai plant as one of the reasons.
The ramp up is part of a goal to reach a target of making 22,000 Model 3 and Model Y cars combined each week. To reach this goal, the company was forced to shut down its Shanghai gigafactory for a few weeks in July to upgrade the production lines. Now that the lines are finished, the company is on its way to reaching its goal.
CEO Elon Musk has said production is a bigger challenge for the company than demand. It is struggling to increase output in its Berlin and Texas plants, while production losses during a two-month COVID-19 lockdown in Shanghai hurt Tesla's profit margin in the second quarter.
With production backlogged in those other factories, Tesla has been forced to stop taking orders for its Cybertruck outside North America, and for Model 3 Long Range vehicles in the United States and Canada. At least until production in those areas can be ramped up as well.