Electric vehicle maker Tesla (NASDAQ:TSLA) was forced to temporarily halt production at its factory in Shanghai, China during August due to the global shortage of semiconductors.
Part of a production line at the China plant was halted for four days in August because of a lack of key chips. Shortages with the availability of electronic control units caused output delays mainly for Tesla's Model Y crossover sports utility vehicle (SUV), according to multiple media reports. Production at Tesla’s Chinese factory is now reported to be back to normal.
Intense competition for microchips and semiconductors has hurt several industries over the past year, with the pandemic both boosting demand for electronics and interrupting supply chains. With semiconductors now used in vehicle’s computers and sensors, automakers globally have lost revenue as shortages affect their output.
Last month, the world's largest automaker, Toyota Motor Corp. (NYSE;TM), said it would slash global production for September by 40% from its previous plan due to the global chip shortage.
Earlier this week, Chinese electric vehicle upstart and Tesla rival, Nio (NYSE:NIO), said it is struggling with getting supplies from manufacturing partners in Malaysia and Nanjing in eastern China.
In China, Tesla shipped around 33,000 electric cars locally and to overseas markets in July. The Palo Alto, California-based company previously halted some production at its car-assembly plant in the U.S. for about two weeks in February due to backlogs at ports and snowstorms that impacted ground transportation.
Retail sales of cars, SUVs and multipurpose vehicles in China, the world’s largest market for electric cars, declined by 6.4% in July from a year earlier to 1.52 million units, according to China’s Passenger Car Association. Preliminary data shows that August sales are expected to decline 13%.
