Tesla shifts Shanghai output to exports as Chinese demand slumps

Tesla's Shanghai Gigafactory produced a record 93,579 vehicles in June, a 38% increase from the same month a year earlier. Despite the production surge, sales to Chinese customers have fallen sharply, with local sales down nearly 20% year‑on‑year. Almost half of the cars built in June were destined for export, and in the second quarter more than half of the factory's output was shipped to Europe, Canada and other Asian markets.

The shift to export helps keep the plant operating at capacity, but it also means higher costs due to tariffs and export‑related taxes. Tesla executives have reportedly been tasked with separating Chinese and non‑Chinese parts of the business, although the company denied any formal plan. New U.S. regulations banning Chinese‑linked software (effective model‑year 2027) and hardware (effective model‑year 2030) are prompting Tesla to reduce reliance on Chinese‑made components for its biggest market.

Overall, Tesla sold about 238,955 vehicles in China while exporting roughly 228,994 units, indicating a near‑balance between domestic sales and overseas shipments as the automaker adapts to weakening demand in its largest market.