Tesla has managed to cut Model 3 and Model Y delivery times in China, an important market for the automaker, after upgrading Gigafactory Shanghai to add more production capacity.

Demand has rarely been a problem for Tesla and over the last few years, it has resulted in long delivery times for many variants of most models.

The automaker has been increasing production capacity to catch up to demand, but the latter has still been outpacing the former, leading to Tesla stopping new orders of some models in order to reduce the backlog.

In China, Tesla has also been experiencing strong demand, but production has also been ramping up rapidly. Over the last month,  Tesla upgraded the plant to achieve a production rate of 1 million vehicles per year.

Today, Tesla announced a significant improvement in delivery time for the Model Y Rear-Wheel-Drive, which is Tesla’s cheapest and most popular model in China.

The automaker cut the delivery time from 8-24 weeks to 4-8 weeks:

Now both sides – Tesla fans and Tesla haters – are interpreting the news in different ways.

On the one hand, Tesla fans believe that the automaker has managed to significantly ramp up production through its recent factory upgrade, which is cutting down the delivery time. On the other hand, Tesla naysayers believe that demand has fallen, resulting in this shorter delivery time.

We should know in a few weeks when China releases its vehicle registration data for August, though September numbers should be more telling.

That said, Tesla’s issues in China are not over as a drought has been putting a lot of pressure on the grid, and Tesla has been asking the government to help maintain power at Gigafactory Shanghai.

China is the largest market for electric vehicles and therefore is Tesla’s most important market. Any production output issue at Gigafactory Shanghai would significantly affect deliveries in China and markets where Tesla exports from China, such as Europe.

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