Supply chain problems briefly halt Tesla production: Musk

Tesla Inc has temporarily halted some production at its California auto assembly plant due to issues with its supply chain, but work has started to resume, CEO Elon Musk told employees on Thursday in a th -mail.

“We are having issues sourcing parts, so we took the opportunity to downsize Fremont’s production for a few days to do equipment upgrades and maintenance,” Musk said in a statement. message to all staff seen by Bloomberg.

The plant was “back in operation since yesterday” and would quickly move to full production of Model 3 and Model Y cars “over the next few days,” he said.

Photo: Reuters

Backlogs at ports and heavy snowstorms affecting land transportation have caused some of the supply chain problems, a person familiar with the matter said.

Representatives for the Palo Alto, Calif.-Based electric vehicle maker did not respond to messages seeking comment.

Bloomberg reported earlier Thursday that some production has been suspended at the plant. Staff at a Model 3 production line in Fremont have been told their line will be down Monday through Sunday next week, although some Model 3 workers are back in the factory on Wednesday, said another person close to the case, who asked not to be identified. because the information is private.

While production line failures are not unusual for automakers, they cost businesses revenue.

Tesla said capacity issues at ports and semiconductor shortages were affecting its supply chain.

CFO Zach Kirkhorn said on an earnings call last month that the company was working to manage the disruption, adding that it “could have a temporary impact.

“We are not too concerned about this supply chain / factory disruption changing the overall delivery trajectory for Q1 and 2021,” wrote Dan Ives, a Wedbush Securities analyst with a neutral rating on the action. from Tesla, in a research note released Thursday.

Musk’s email encouraged employees to recommend friends to join Tesla as the company “soon” resumes a second Model S and X change due to “high demand”.

The S / X production lines are “nearing completion and will aim for maximum production in the next quarter,” he said.

Tesla shares fell 8.1% to US $ 682.22 on Thursday and were little changed at the end of the session. The stock has declined 3.3 percent so far this year.

The California plant is still the most important part of Tesla’s vehicle production base, with an estimated capacity of 600,000 vehicles per year.

Affected workers have been told they will be paid Monday and Tuesday, not Sunday through Wednesday next week. They were advised to take vacations, if they had any.

Musk also opened a factory near Shanghai and built facilities outside of Berlin and Texas.

Tesla has lowered the price of its various models 14 times in markets such as China, Japan and France this year, said GLJ Research LLC founder Gordon Johnson, who has a sell note on the title.

“Considering that Tesla had excess inventory in the fourth quarter of 2020 and was never able to sell its production capacity, we see the company as currently constrained by demand, rather than limited production.” Johnson wrote in a note earlier this week. .

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