Arab Press

بالشعب و للشعب
Friday, Feb 27, 2026

Elon Musk says pandemic supply-chain issues and a global microchip shortage resulted in 'insane difficulties' for Tesla

Elon Musk says pandemic supply-chain issues and a global microchip shortage resulted in 'insane difficulties' for Tesla

"We've had some of the most difficult supply chain challenges that we've ever experienced in the life of Tesla," Musk said, citing the chip shortage.

Elon Musk told investors during the Tesla's quarterly earnings call that the automaker has been forced to reckon with numerous supply chain issues in 2021.

Musk said the company has had "insane difficulties" with its supply chain over the last quarter. "We've had some of the most difficult supply-chain challenges that we've ever experienced in the life of Tesla," he said on Monday.

The CEO said the global semiconductor chip shortage, which has rocked the automotive industry, as well as port delays impacted manufacturing goals.

In February, Tesla briefly halted production on its Model 3 at its car assembly plant in California, citing supply-chain issues caused by backlogs at ports and severe snowstorms slowing down ground deliveries.

The global semiconductor shortage has wreaked havoc on tech and automotive companies. In January, Bloomberg reported the chip shortage could cost car companies to lose as much as $61 billion in revenue.

Many automakers have since been forced to shut down manufacturing plants and prioritize the most profitable car models they produce as a result of the shortage. Computer chips account for about 40% of a new car's cost, according to a report from Deloitte, and are used in navigation,bluetooth, and collision-detection systems.

Musk also said the company has had trouble scaling its production in China due to the pandemic, as 1COVID1-19 restrictions in the country have made it more difficult for Tesla to bring in engineers for its plants.

Port delays and the global container-ship shortage have also impacted Tesla's manufacturing supplies in the US.

Zach Kirkhorn, Tesla's chief financial officer, said the company is facing high expediting costs, despite "tremendous work" from the company's team and suppliers in keeping the plants running.

"We continue to work through the instability of the global supply chain, particularly around semiconductors and port capacities," Kirkhorn said.

Port delays and a global container-ship shortage have set many companies back in recent months, pushing shipping costs even higher and leading to shortages of goods. Delays at southern California ports have caused nearly 20 ships to wait weeks to dock and unload.

Earlier in the year, Nike , Costco , Toyota, Honda , and Samsung said supply-chain issues are harming business this past quarter and would likely have an impact going forward. Last week, several companies, including Procter & Gamble and Coca-Cola, announced they would hike prices to combat increased shipping costs.

Overall, Tesla had a profitable quarter, after announcing it had sold the most cars in its history. During the first three months of the year, the company delivered 184,877 vehicles — a number that was largely driven by strong demand for electric vehicles in China.

Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Asian LPG Prices Surge After Damage Forces Saudi Aramco Export Disruptions
Saudi Arabia Unveils $100 Billion AI Infrastructure Fund to Challenge US and China
Saudi Stocks Close Lower as Tadawul All Share Index Falls 1.28 Percent
Saudi Arabia Launches Smart Mapping System to Enhance Pilgrim Experience at Holy Sites
Cristiano Ronaldo Acquires 25 Percent Stake in Saudi-Owned Spanish Club Almería
U.S.–Saudi Relations Balance Transactional Deal-Making with Expanding Strategic Ambitions
Israel’s President Herzog Signals Cautious Message on Saudi Ties at UAE Iftar in Tel Aviv
United States and Saudi Arabia Strengthen Security Ties with Joint Explosive Ordnance Disposal Exercise
Saudi Arabia Responds to Israel–UAE Moves in Somalia as Regional Rivalries Intensify
Saudi Arabia Showcases Expanding Defense Ambitions at World Defense Show 2026
SECRETARY RUBIO on IRAN: Iran poses a very great threat to the United States, and has for a very long time.
Larry Summers, the former U.S. Treasury Secretary, is resigning from Harvard University as fallout continues over his ties to Jeffrey Epstein.
U.S. stocks ended higher on Wednesday, with the Dow gaining about six-tenths of a percent, the S&P 500 adding eight-tenths of a percent, and the tech-heavy Nasdaq climbing roughly one-and-a-quarter percent.
Nvidia posted better than expected results for the January quarter on Wednesday and forecast current quarter revenue above market estimates.
Saudi Arabia’s Coffee Renaissance Gains Momentum as Investment and Heritage Drive Industry Growth
Saudi Shipping Leader Bahri Expands Fleet as Tanker Rates Approach $200,000 a Day
Saudi Arabia Advances First National Urban Policy Through High-Level Leadership and Institutional Alliances
Major Life Sciences Summits to Spotlight Saudi Arabia’s Rise as Regional Biotech and Pharma Hub
Saudi Arabia Reframes Red Sea and Horn of Africa Strategy Amid Rising Security and Trade Stakes
Saudi Arabia Recalibrates Its Role in Shifting Regional and Global Power Dynamics
Saudi Retail Signals to Global Brands: Localise or Lose Ground in a Rapidly Evolving Market
Saudi Arabia Looks to Human Capital Investment to Unlock Demographic Dividend
Saudi Arabia and Iran Increase Oil Exports Amid Escalating Middle East Tensions
Saudi Data Protection Authority Intensifies Enforcement Under Personal Data Law
Saudi Arabia Raises Oil Output and Exports Amid Contingency Planning Over Iran Tensions
USS Gerald R Ford Arrives in Souda, Crete
Saudi Sovereign Wealth Fund Unit Expands Push Into Global Private Credit
Saudi Arabia Eases Headquarters Rules to Attract More Foreign Firms
Saipem Secures Major Offshore Pipeline Contract in Saudi Arabia
Saudi Arabia’s Targeted Oil Export Cuts to the US Seen as Strategic Signal Amid Global Supply Glut
Nemetschek Arabia Signs Strategic MoU with Saudi Facility Management Association
Gulf Markets Close Mixed as Saudi Shares Slip on Budget Deficit Concerns
Saudi Arabia Posts Largest Quarterly Budget Deficit in Years Amid Weaker Oil Revenues and Higher Spending
U.S. Lawmaker Urges Safeguards on Saudi Civil Nuclear Deal as Trump Administration Advances Agreement
Saudi Arabia and Gulf Allies Rally Behind Kuwait in Escalating Maritime Border Dispute with Iraq
Universal Aviation Secures License to Operate and Manage New General Aviation Terminal in Dammam
Tucker Carlson’s Saudi Arabia Remarks Spark Debate Over Israel Stance
GCC Secretary-General Holds Talks with EU Ambassador in Riyadh
Gulf States’ AI Investment Drive Seen as Strategic Bet on Technology and U.S. Security Ties
African Union Commission Chair Meets Saudi Vice Foreign Minister to Deepen Strategic Cooperation
President El-Sisi Holds Strategic Talks with Saudi Crown Prince in Riyadh
Lucid Unveils Up to $12,000 Incentive for Air and Gravity Models in Saudi Arabia
Saudi Arabia Enters Global AI Partnership, Expanding Its Role in International Technology Governance
Saudi Arabia’s Landmark U.S. LNG Agreement Signals Major Strategic Shift
Saudi Arabia Accelerates Global Gaming Push with Billion-Dollar Deals and Expanded PIF Mandate
Saudi Arabia Reports $25.28 Billion Budget Deficit in Fourth Quarter of 2025
Alvarez & Marsal Tax Establishes Dedicated Pillar Two and Transfer Pricing Team in Saudi Arabia
United States Approves Over Fifteen Billion Dollars in Major Arms Sales to Israel and Saudi Arabia
Pre-Iftar Walks Gain Momentum as Ramadan Wellness Trend Spreads
Middle East Jackup Rig Fleet Contracts Further After Saudi Drilling Suspensions
×