On February 26th, on Thursday, local time, Elon Musk, CEO of electric car manufacturer Tesla, told employees in an email that due to supply chain problems, Tesla is located in California's auto assembly plant previously suspended the production of some auto products, but work has begun to gradually resume.

Musk’s email to all employees said, “We encountered some parts supply problems, so we took this opportunity to stop production at the Fremont factory for a few days to upgrade and maintain equipment.” Musk said, The Fremont plant in California “has gradually resumed operations yesterday” and will rapidly increase the production capacity of Model 3 and Model Y electric vehicles in the “next days”.

Pictured: Employees are producing Model 3 at the company's factory in Fremont, California.

According to a person familiar with the matter, the backlog of cargo at the port and severe snowstorms have caused problems in the supply chain. Tesla did not respond to a request for comment.

According to media reports, the ports of Los Angeles (Port of LA) and Port of Long Beach (Port of Long Beach) in Southern California, the largest ports on the west coast of the United States, were affected by the new crown epidemic, and the operating rate of dock workers was insufficient, resulting in hundreds of freighters being forced to berth nearby. It is impossible to enter the port for unloading on the sea surface.

Earlier Thursday, there were reports that some production work at the Fremont, California plant had been suspended. A person familiar with the matter said that employees on the factory's Model 3 production line were previously told that the production line they were working on would be suspended from February 22 to March 7. However, some employees have already returned to work on February 24.

Affected workers were previously informed that the same day's wages will still be paid on February 22 and February 23, and the company will no longer pay the wages on February 28, March 1, March 2 and March 3. Tesla recommends that these employees take time off if necessary.

Although production line shutdowns are not uncommon for automakers, it will cause loss of company revenue. Tesla said in January that the port cargo backlog and chip shortages are affecting its supply chain. Chief Financial Officer Zach Kirkhorn said on an earnings call last month that the company is working hard to address these issues, saying they "may have a temporary impact."

Wedbush Securities analyst Dan Ives, who gave a neutral rating to Tesla stock, wrote in a research report released on Thursday: "We are not too worried about supply chain disruptions and factory shutdowns. It will change the momentum of product delivery in the first quarter and 2021."

Musk encouraged employees to recommend their relatives and friends to join Tesla in an email. He said that due to "high demand", Tesla "soon" will resume shift operations on the Model S and Model X production lines. Musk said that Model S and Model X production lines "equipment transformation has been basically completed, and it is expected to achieve maximum output in the next quarter."

Tesla shares fell 8.1% on Thursday to $682.22, with little price fluctuations in after-hours trading. Since the beginning of this year, Tesla stock has fallen by 3.3%.

The Fremont, California plant is still the most important part of Tesla's car production base, with an estimated annual production capacity of 600,000 vehicles. In addition, Tesla's Shanghai Gigafactory has been put into full production, and factories in Berlin, Germany and Texas are under construction.

According to Gordon Johnson, founder of Tesla's short-selling GLJ Research, Tesla has lowered the prices of various models 14 times in China, Japan and France since the beginning of this year. Johnson has a "sell" rating on Tesla stock.

Johnson wrote in a report earlier this week: "Considering that Tesla has overstocked in the fourth quarter of 2020 and has never been able to sell out its capacity, we believe that the company's current situation is that demand is affected. Restriction, not production restriction." (Chenchen) 

Source: NetEase Technology Report, translated by Google Translate