Tesla stopped production of the Model 3 at Fremont factory, California, for two weeks in the middle of a shortage of microchips across the automotive industry. According to officials heard by Bloomberg, the line will be inactive until at least the next March 7th.
The lack of the component made the President of the United States, Joe Biden, call a meeting in the American Congress to discuss solutions to the crisis. The scarcity of semiconductor chips is a global problem caused by Covid-19 pandemic.
Tesla workers in California were advised to take a vacation during the production interruption period. Affected officials were told that they would not be paid for the days off. Internally, the reason for the strike was not confirmed.
The lack of components seems to be the best explanation. Tesla vehicles are made from more than 10 parts - some manufactured in-house, others delivered by suppliers. If one is missing, the car is not produced.
The entire auto industry is currently dealing with a global shortage of microchips. Ford, for example, had to halt vehicle manufacturing at its Kentucky plant in December 2020, which is expected to affect the company's production by up to 20% for the first quarter of 2021.
The automaker was even forced to reduce production of the F-150 pickup, the country's best-selling model, at its Michigan and Missouri factories. GM, on the other hand, cut production at its factories in the state of Kansas, Canada and Mexico until March, when it will review the plans.
Nissan, Toyota, Volkswagen, Subaru and Fiat Chrysler also announced production lines that were interrupted or slowed due to the problem. Tesla's Freemont plant also produces Model Y, Model S and Model X.
Crisis is another effect of the pandemic
The scarcity of semiconductor chips is a global problem that was caused by the Covid-19 pandemic. Although these inputs are used in almost the entire industry, such as for the manufacture of smartphones, computers and more modern models of refrigerators, the automobile industry is the largest buyer of these chips.
At the beginning of the pandemic, demand for the chips dropped due to the slowdown in the car market. However, it soared by companies that make computers and other equipment that allowed employees to work from home.
But when the automotive industry resumed production, the others continued with the same demand for the product, which caused it to be in short supply in the market. According to major microchip makers such as Qualcomm and AMD, the crisis is expected to continue until at least half of 2021.