Tesla Suspends Production Of Model 3 And Model Y

Last week, Tesla slashed the starting price of the Model 3 and Model Y, only to then remove the Model Y Standard Range from the lineup just a few days later. Predicting what Tesla will do next is never easy, but this seemed like a strange move. Reducing the MSRP to $39,990 would have helped boost Model Y sales, so it seemed likely that supply issues were to blame.

Elon Musk has since commented saying the Model Y Standard Range is still available “off the menu,” but added that he doesn’t think the range “meets the Tesla standard of excellence.” Tesla has still been affected by supply issues, however.

On Twitter, Musk confirmed that Tesla’s Fremont plant was shut down for two days this week due to “parts shortages.” Production has since resumed.

After news broke that production of the Model 3 had suspended, Tesla’s shares fell eight percent. According to Reuters, some workers were told they could take off Wednesday and Thursday this week. Another employee noticed that staff parking lots were emptier than usual on Thursday. In an email obtained by Electrek, Musk told employees that Model 3 and Model Y production will increase to full capacity within the next few days. Production of the refreshed Model S and Model X will also increase with a second shift to meet the high demand.

“We are experiencing some parts supply issues, so we took the opportunity to bring Fremont down for a few days to do equipment upgrades and maintenance,” Musk said in the email. “Fremont production is back up and running as of yesterday and will speed up rapidly to full Model 3/Y production over the next few days.”

Tesla isn’t the only automaker affected by these supply issues. A global shortage of semiconductor computer chips has forced several automakers to scale back production in the US including Ford, General Motors, and Ford. Musk didn’t specify which parts caused the production shutdown. Another possible explanation is that the snowstorms in Texas have caused Samsung’s factory in Austin, where chips for Tesla’s self-driving technology are manufactured, to suspended production.