Nightmare: Tesla Has Over 10,000 Vehicles It Can’t Sell

There are over 10,000 Tesla electric cars overflowing in a holding lot outside of its Fremont, California, manufacturing plant on a “containment hold.” A containment hold means they can’t be delivered to dealers, yet Tesla production continues. Tesla sources are not saying what the issue is but it involves Model 3 and Model Y vehicles. 

According to Electrek, all that is known is that one particular part is not able to be assembled onto cars. Musk has said in the past that Tesla is having supply chain issues. That is clearly the case now, creating a logistical nightmare as the cars continue to pile up. 

Some estimates are as high as 20,000 Teslas will be involved in the hold

White Tesla Model Y
Tesla Model Y | Tesla

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Some estimates are as high as 20,000 Teslas are or will soon be involved in the hold. Electrek says there are no fixes nor a timeline when they will be released. It is also not known what happens when the overflowing lot sees its limit. 

Tesla doesn’t sell to third-party dealers. It owns its distribution network so it can produce as much or as little as it wants. Tesla always endeavors to keep its inventories low by delivering as many cars to customers as it can. 

Especially, as yearly quarters come to an end Tesla will make a concerted push to get cars out to improve quarterly numbers. Now employees are said to be expecting the end of June to be especially chaotic as Tesla cranks out lots of product on top of this batch of vehicles it has put a containment hold on.  

Right now demand for Tesla vehicles is very high

a chrome Tesla emblem on a red EV
Tesla Emblem | Robert Alexander via Getty Images

Demand for Tesla vehicles is very high right now. So the fact it can’t actually deliver but is still cranking out cars must be putting an extra strain on the organization. If it is a microchip issue it follows what is taking place at other assembly plants.

Today Ford announced it would keep its F150 pickup truck plant closed for two more weeks over microchip supply issues. Chevrolet production has been halted for weeks while GM shifts microchip priority to its most popular and profitable vehicles. 

Production in the fourth quarter of 2020 was the highest in Tesla’s history

A visitor experiences a white Tesla Model X during the 3rd China International Import Expo (CIIE) at the National Exhibition and Convention Center
The Tesla Model X | Guo Zhihua/VCG via Getty Images

Production in the fourth quarter of 2020 and the first quarter of 2021 are the highest in the history of Tesla. Tesla produced over 180,000 vehicles in each of the last quarter. Its production figures were up over 75 percent year-over-year. 

In 2020 Tesla sold over half a million vehicles. This was an almost 40 percent increase over the same period in 2019. Last year the Model 3 was the best-selling EV in the world. So by all accounts, this hold placed on finished Teslas is coming at a very bad time-not that any time is a good time to have a shutdown.