Tesla announced during its Q2 2023 earnings call on Wednesday that it is maintaining its production target of 1.8 million vehicles for this year.

While that's great news for investors, Tesla did note that factory upgrades would occur during the third quarter, potentially causing a slight decrease in production.

Tesla CEO Elon Musk told investors that they should expect lower production figures for Q3 compared to the record results posted in Q2, when the automaker produced 479,700 electric cars and delivered 466,140 of them.

The reason for the decrease in production is the fact that some of Tesla's factories will shut down temporarily this summer to implement upgrades, Elon Musk explained.

"We continue to target 1.8 million vehicle deliveries this year. Although, we expect that Q3 production will be a little bit down because we've got summer shutdowns to – for a lot of factory upgrades. So, just probably a slight decrease in production in Q3 for sort of global factory upgrades."

Tesla's Chief Financial Officer Zachary Kirkhorn said essentially the same thing later in the call.

Gallery: Tesla Fremont Factory

"As we look forward to the rest of the year, I want to reiterate Elon's comments on Q3 volumes driven by planned downtimes for factory upgrades. These upgrades will also carry some amount of factory idle cost. However, we are working to minimize as much as possible."

The reason behind the factory shutdowns is likely an upgrade of production and possibly retooling. 

We know that Tesla is preparing to launch two new models, the Cybertruck and the facelifted Model 3 – the so-called Project Highland – so the shutdowns are most likely related to the efforts to industrialize these two new EVs.

Since the Model 3 is built at two of Tesla's plants – the Fremont Factory and Gigafactory Shanghai – and since we're dealing with "sort of global factory upgrades," according to Musk, we can expect Project Highland to be the main reason for the factory shutdowns coming this summer.

We already know the Fremont Factory is undergoing an overhaul, but Tesla is yet to confirm whether the line upgrades are for the Model 3 Highland.

Meanwhile, test prototypes of both vehicles continue to be spotted across the United States – especially in California and Texas – and even overseas, a sign that the testing process is in full swing.

Got a tip for us? Email: tips@insideevs.com