China is Tesla's cash cow, but for how much longer?

Tesla's Shanghai factory just set a production record, building ninety-three thousand five hundred seventy-nine cars in June — a thirty-eight percent surge from last year. Per Ars Technica, though, the boom in output isn't matching demand at home. Chinese customer sales have been falling quarter after quarter for over a year, particularly as the Model 3 loses appeal. The solution: export aggressively. Forty percent of June's production left China entirely, and in the second quarter overall, more than half went to Europe and other markets. Shanghai remains enormously valuable — low wages, cheap local suppliers, and government export rebates make it a profit machine even in tough times. But the plant's long-term future may be uncertain. The Wall Street Journal reported last week that Tesla executives have been tasked with separating Chinese and non-Chinese operations, though Tesla denied such plans were underway.

Listen to this story

Hear this and more stories in a personalized audio briefing.

Open The Chonkerton