SHANGHAI: Tesla plans to cut December output of the Model Y at its Shanghai plant by more than 20% compared to November, two people with knowledge of the matter said on Monday.

Reuters was not able to immediately ascertain the reason for the December reduction in the electric vehicle (EV) giant’s latest production plan. Tesla did not immediately respond to a request for comment on the planned cut, first reported by Bloomberg.

China has partially eased tough COVID-19 curbs on people and businesses aimed at stamping out all outbreaks of the virus, but many restrictions are still in place.

These have dampened demand and triggered local production slowdowns across the auto industry because of difficulties in securing component supplies.

Tesla added to its electric vehicle inventory in Shanghai at its fastest pace ever in October, according to China Merchants Bank International (CBMI) data.

Chief Executive Elon Musk has said China, the company’s second-largest market, was in a “recession of sorts”.

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Even so, Tesla’s retail sales in China nearly doubled in the first four weeks of November from a year earlier, after the automaker cut prices and offered incentives on its Model 3 and Model Y models, the data from CMBI showed.

Globally, Tesla had planned to push production of the Model Y and Model 3 EVs sharply higher in the fourth quarter as newer factories in Austin and Berlin ramp production, Reuters reported in September.