"Tesla Temporarily Halts Electric Vehicle Production at US Factory Due to Semiconductor Shortage"

Production Halt from 22nd... Difficulties in Operations Until 7th Next Month
Global Semiconductor Shortage Impact... Spreading Across the Automotive Industry

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] Concerns are growing in the global automotive industry as Tesla is reported to have temporarily halted electric vehicle production due to a shortage of automotive semiconductors.

According to foreign media including Bloomberg News, on the 25th (local time), the U.S. electric vehicle manufacturer Tesla temporarily suspended production of its electric sedan Model 3 at its Fremont plant in California for two weeks. Bloomberg, citing industry sources, reported that the Model 3 production halt at the Fremont plant began on the 22nd and is expected to continue until the 7th of next month.

This production stoppage is understood to be due to the global shortage of automotive semiconductors. Earlier, major foreign media reported that Tesla had announced last month that it could face temporary disruptions due to semiconductor shortages. Not only Tesla, but other global automakers such as General Motors (GM) are also reportedly struggling with shortages in automotive semiconductor supply.

The automotive semiconductor shortage began in the first half of last year when semiconductor manufacturers reduced production anticipating a sharp decline in vehicle sales due to the COVID-19 pandemic. However, contrary to market expectations, vehicle demand rapidly recovered from the second half of last year, and as automakers simultaneously increased production volumes, the semiconductor shortage worsened.

The supply-demand imbalance has also been affected by the impact of semiconductor production reductions caused by the Texas cold wave and power outages. Analysis suggests that Tesla was affected because Samsung Electronics’ semiconductor plant in Texas, which supplies chips related to autonomous driving, halted operations due to a massive power outage caused by last week’s severe cold wave in Texas.