Tesla (TSLA) has reportedly told employees that it will pause production at Gigafactory Texas, where it produces Model Y and Cybertruck vehicles, for the second time in as many months.
In late May, Tesla extended a long weekend into a week-long production shutdown at Gigafactory Texas.
The move came amid lower demand and inventory buildups.
We reported earlier today that Tesla has to rent out empty parking lots around the US to use as overflow lots for its extra inventory.
Now, Tesla told employees that it is again shutting down Model Y and Cybertruck production at Gigafactory Texas over the first week of July.
With the Fourth of July being a Friday this year, it was going to be a long weekend, but Tesla again decided to extend the production shutdown from June 30th through the following week, according to employees talking to Business Insider.
Tesla claimed that it will enable the company to perform “maintenance and improvements on production lines.” Employees are being offered paid time off or to come in for training.
As we have previously reported, Tesla has been throttling down production of the Cybertruck in 2025 as sales are currently tracking about half of last year.
That’s despite having launched cheaper versions of the electric truck, gaining access to the federal tax credit for the Cybertruck, and offering bigger discounts and incentives.
Tesla reported a 13% decrease in deliveries in Q1 2025 compared to the same period last year, which the automaker attributed to its Model Y design changeover reducing production.
However, Tesla’s deliveries are currently tracking to be down even more in the second quarter compared to last year, despite Tesla having ramped up production.
Electrek’s Take
What’s going to be the excuse this quarter? As I reported earlier today, Tesla is currently tracking to deliver 355,000-360,000 units in Q2, which would be down 19-20% compared to 2024.
It would be an even steeper decline even with the new Model Y.
Top comment by European Bob
I’m actually a contractor in this factory. It’s not a production volume issue at all, my team and I need a whole week to change the process that glues the panels into the cybertruck. We will be implementing advanced hook and eye technology to ensure a better fit and a more secure product. It’s called Vehicle Enhancement Lightweight Continuous Reinforcement Operation, or VELCRO for short
It clearly wasn’t the problem.
The automaker had already reduced its production capacity at most factories in 2024, when it ran at about 60% capacity due to lower demand.
Now, Tesla is stopping production of its best-selling Model Y with the new design twice in two months?
This is not looking good.
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