Tesla Temporarily Halts Production in California Plant

***In January, the company said that it might get temporarily affected by a global semiconductor shortage. Other car manufacturers like General Motors are also shutting assembly lines due to shortages of chips, as demand from the customers has revived unexpectedly fast from the coronavirus crisis. ***

According to a news report on Thursday, Tesla Inc has informed its workers that it will temporarily stop some production at its car assembly plant in California, citing a person familiar with the matter. According to the report, factory workers that were working on a Model 3 sedan production in Fremont were told that their line would be down from 22nd February until the 7th of March. The report did not mention any reason for the production halt, and Tesla did not comment on the matter as well.

In January, the company said that it might get temporarily affected by a global semiconductor shortage. Other car manufacturers like General Motors are also shutting assembly lines due to shortages of chips, as demand from the customers has revived unexpectedly fast from the coronavirus crisis. Samsung Electronics, the producer of chips said last week that it had suspended its Texas factory as a winter storm caused power outages. Samsung denied to identify its customers for the factory, but in the year 2019, Tesla said that its self-driving chips are produced at Samsung's factory in Texas.

It was not clear as to how much revenue or volume Tesla would lose due to the halt in production. The Fremont plant has a production capacity of 500,000 Model 3s and Model Ys combined annually. Tesla, which also has manufacturing units in China, said last month it may be able to grow its annual sale volume by more than 50 per cent this year. Tesla last week reduced the price of its cheaper variants of the Model 3 and the Model Y, the latest in a series of price cuts at a time when legacy automakers are trying to fight back with new models.