Arab Press

بالشعب و للشعب
Tuesday, Mar 31, 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
Saudi Arabia Urges Trump to Lead Strategic Reset in Middle East as UAE Weighs Ground Role
Reed Smith Expands Saudi Presence with Senior Corporate Appointments
Trump Announces Approval of F-35 Fighter Jet Sale to Saudi Arabia
BBC Faces Scrutiny Over Allegations of Paid Content Linked to Saudi Arabia
Ukraine Secures Defense Agreements with Qatar and Saudi Arabia as UAE Talks Advance
Oil Prices Surge as Saudi Arabia Adjusts Supply Amid Escalating Iran Tensions
Saudi Arabia Condemns Attacks on Kurdistan Leaders and Reaffirms Backing for Iraq’s Stability
Saudi Arabia Weighs Strategic Interests as Iran Conflict Raises Regional Stakes
Severe Thunderstorms Sweep Across UAE and Saudi Arabia Bringing Heavy Rainfall
Trump’s Strategic Alignment with Saudi Arabia Reflects Expanding Economic and Diplomatic Synergy
Saudi Arabia Strongly Condemns Attacks on Presidential Residences in Hawler
Saudi Stocks Edge Lower as Tadawul Index Closes Slightly Down
Houthis Enter Expanding Iran Conflict as US Deploys Additional Troops
Iran Seeks Assurances for Regional Allies as Saudi Arabia Presses for Firm Security Guarantees
Iranian Strike Reportedly Destroys $270 Million US E-3 Sentry Aircraft at Saudi Air Base
Iranian Strike on Saudi Base Leaves Ten American Personnel Injured
Ukraine Claims Russia Shared Satellite Intelligence with Iran Ahead of Saudi Base Strike
Pakistan Engages Regional Powers in Diplomatic Talks Over Iran Conflict
Escalating Iran Conflict Brings Renewed Focus to US Military Presence in Saudi Arabia
Iranian Strike Targets Saudi Airbase, Damaging Key US Military Assets
Modi and Saudi Crown Prince Emphasise Secure Shipping Routes in Talks on West Asia Conflict
Dallas-Based Company Secures One Billion Dollar Hotel Development Deal in Saudi Arabia
Zelensky Secures Defence Cooperation Deals with Gulf States During Strategic Regional Tour
Trump Calls on Saudi Arabia to Join Abraham Accords in Push for Expanded Middle East Cooperation
Trump Balances Humor and Praise in Remarks on Saudi Crown Prince
Saudi Arabia’s Strategic Pipeline Reaches Seven Million Barrel Capacity to Bypass Hormuz
Rubio Signals U.S. Could Conclude Iran Conflict Within Weeks as Air Campaign Intensifies
More Than a Dozen U.S. Soldiers Injured in Saudi Base Attack as Iran-Backed Houthis Expand Conflict
Iranian Strike on US Base in Saudi Arabia Injures Troops and Damages Aircraft
Pakistan to Convene Regional Talks with Saudi Arabia, Turkey and Egypt Amid Iran War Diplomacy
Ukraine and Saudi Arabia Reach ‘Mutually Beneficial’ Defence Agreement
Ukraine to Share Battlefield Expertise with Saudi Arabia Under New Defence Agreement
Trump Takes Center Stage at Saudi Arabia’s FII Miami Amid Escalating Iran Conflict
Gulf States Explore Pipeline Routes to Bypass Strait of Hormuz Amid Rising Tensions
Iran Conflict Drives Saudi Arabia to Deepen Security Ties with Ukraine
Saudi Arabia Reviews Desert Ski Resort Plans with Cancellation of Key Building Contracts
Saudi Arabia Targets Business Hotel Shortfall with $1 Billion Development Push
Iran and Allied Forces Intensify Strikes on Energy Sites and Urban Areas Across Region
Ukraine and Saudi Arabia Formalise Defence Cooperation Agreement, Zelenskiy Announces
Saudi Arabia Reportedly Presses US to Intensify Operations Against Iran
Saudi Arabia Expands Maritime Network with Launch of Six New Shipping Services
Saudi Arabia Launches FII Summit Amid Heightened Focus on Global Stability and Investment Risks
Saudi Arabia’s HUMAIN Secures First US Customer in Expansion of AI Capabilities
Saudi Arabia Calls on US to Seize Strategic Opportunity to Reshape the Middle East
Saudi Arabia’s Strategic Investments Help Shape Silicon Valley’s Rise
Saudi Arabia Announces Passing of King Abdullah, Marking End of an Era
Saudi Arabia May Shift From Neutrality to Retaliation if Houthi Attacks Escalate, Experts Warn
UAE and Saudi Arabia Urge Decisive US Action on Iran as Regional Pressure Intensifies
Zelensky Visits Saudi Arabia After Offering Ukraine’s Drone Expertise
Saudi Arabia Pauses Ambitious Desert Ski Project Amid Strategic Reassessment
×