Tesla idles Model 3 line at California plant
Tesla Inc. told workers it will temporarily halt some production at its car-assembly plant in California for about two weeks, according to a person familiar with the matter.
Staff on a Model 3 production line in Fremont were told their line would be down from February 22 until March 7, said the person, who asked not to be identified because the information is private. The workers were told they would be paid for February 22 and February 23 and not paid for February 28, March 1, 2 and 3. They were advised to take vacation time, if they had it.
Representatives for the Palo Alto, California-based electriccar maker didn’t immediately respond to messages seeking comment.
Tesla shares fell as much as 3.8% to $713.75 before the start
of regular trading Thursday.
While production-line outages aren’t unusual for automakers, they cost the companies revenue. Tesla said last
month that it’s trying to mitigate the effects of a global semiconductor shortage on its operations and that it expects to increase global vehicle deliveries by more than 50% this year. The California plant is still the most important part of Tesla’s vehicle-production base, with capacity to make an estimated 600,000 vehicles a year. Chief executive officer Elon Musk also has opened a plant near Shanghai and is constructing facilities outside Berlin and in Texas.
Tesla has cut the price of its various models 14 times in markets including China, Japan and France this year, raising some analysts’ doubts that it has enough demand to meet its goals.
“When considering Tesla had excess inventory in the fourth quarter of 2020, and has never been able to sell-out its production capacity, we see the company as currently demand constrained, rather than production constrained,” GLJ Research LLC founder Gordon Johnson wrote in a note earlier this week.