Tesla CEO Musk said on Monday’s after-hours earnings call that the company had faced “crazy” supply chain difficulties in the first quarter, with a global semiconductor chip shortage and port delays affecting its production targets. Musk said, “We have experienced the most severe supply chain challenges Tesla has ever experienced.”
In February, Tesla’s California factory suspended Model 3 production for a time due to supply chain issues caused by port backlogs and severe snowstorms that slowed deliveries on the ground.
The global semiconductor shortage has had a severe impact on technology and automotive companies, with many automakers forced to close production plants and prioritize the most profitable models.
Port delays and a global shortage of container ships have also impacted Tesla’s manufacturing supply in the United States. Tesla Chief Financial Officer Zach Kirkhorn (Zach Kirkhorn) said the company is facing high rush costs, despite “a lot of work” by the company’s team and suppliers to keep factories running.
Kirkhorn said, “We continue to deal with instability in our global supply chain, particularly with semiconductors and port capacity.”
Port delays and a global shortage of container ships have deterred many companies in recent months, further pushing up shipping costs and leading to cargo shortages. Delays at Southern California ports have caused nearly 20 ships to wait for weeks before docking and unloading their cargo.
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