Report: Tesla To Halt Model 3 Production In Shanghai Ahead Of Upgrade

The rumor says that the company is preparing to produce a "revamped" version of the Model 3.

Tesla Giga Shanghai (Tesla Gigafactory 3)

Mark Kane

By: Mark Kane

Feb 15, 2023 at 1:04pm ET

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Production of the Tesla Model 3 at the Tesla Giga Shanghai plant might be halted to upgrade the production line to handle an upcoming new "revamped" version of the car.

According to Bloomberg, unofficial and undisclosed sources say that Model 3 production in China will be temporarily paused (from Sunday, February 19) until the end of February.

"The plant has two phases for vehicle manufacturing, and some workers on the first phase won’t be allowed on production lines from as soon as Sunday as the work on improving them is undertaken, people familiar with the matter said, asking not to be identified as the information isn’t public."

The article notes also that production lines at the Giga Shanghai are being upgraded in stages over two months now.

We don't have any official confirmation about that and there is no comment on the matter, but considering the weakened sales of the Model 3 (in China and globally), as well as rumors about an upgrade - aka "Project Highland" - the report sounds reasonable.

Moreover, because of Tesla's global approach, we can also expect that any major change applied in China would be applied also in Fremont.

The factory in China also produces the Model Y, which accounts for the majority of production. As we understand, Tesla will continue Model Y production without interruptions.

The main question is what exactly will be changed with the Model 3? Some design tweaks or new materials are obvious ideas, but we guess that there are some hardware things to make the car substantially better. Maybe megacastings to lower production costs, or some new battery system to provide more range.

From the company's perspective, there is a necessity to make the car more competitive to attract more customers, while still making at least a decent profit.

What do you think?

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Bloomberg noted also that new orders for Tesla cars "started to flatten since the start of this month after an initial frenzy following the price cuts," although that's unofficial input from an anonymous source.

The rumored upgrade of the Model 3 might actually be the most important project at the company right now because it might be the key to keeping high sales volume.