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Elon Musk: Tesla’s biggest challenge is supply chain, but it’s not a long-term issue
Tesla CEO Elon Musk said that his company’s biggest issue in the short term is supply chain, especially when it comes to microcontroller chips.
“Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it,” Musk said in a Tweet during the early morning hours on Wednesday. “Fear of running out is causing every company to overorder.”
Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it.
Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale.
That said, it’s obv not a long-term issue.
— Elon Musk (@elonmusk) June 2, 2021
For months, the automotive industry has been confronted with a shortage of semiconductors and microcontroller chips. These chips help control the “brain” of a vehicle and can operate everything from fuel injection systems in combustion engine cars to infotainment systems in electric cars. This year, there has been a major shortage due to overbuying by large automotive manufacturers, a situation that has been caused by tensions between the United States and China. China is a global powerhouse in semiconductor chip production, and companies have panic bought large quantities of these chips to compensate for the possibility of running out.
Several automakers have shut down production lines in various regions globally due to not having enough semiconductors or microcontrollers to handle regular production rates.
Musk compared the issue to the toilet paper shortage that occurred last year during the COVID-19 pandemic. Consumers panic bought toilet tissue due to the fear of being quarantined for an extended period of time. This ultimately caused a massive shortage, and large retailers were forced to limit the quantity that could be purchased per family to remain stocked.
Despite the short-term problems that this has caused Tesla and many other large car companies in the world, Musk believes that it won’t affect his car company down the road. “It’s obv[iously] not a long-term issue,” the CEO added.
Tesla was able to avoid some of the semiconductor shortages by pivoting away from the tech altogether. In the company’s Q1 2021 Update Letter, Tesla outlined how it navigated through supply chain shortages by utilizing microcontrollers instead.
The company wrote:
” In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers.”
Tesla has been able to distance itself from production halts at its factories, apart from a rumored two-week hiatus in Model Y production lines at Giga Shanghai in China. Instead, Tesla has refined its products and continued to work on releasing the new Model S and Model X vehicles that the company redesigned and released in January. Deliveries on the new Model S are expected to begin on June 10th with a dedicated delivery event at Tesla’s Fremont Factory in Northern California.
What do you think? Let us know in the comments below, or be sure to email me at joey@teslarati.com or on Twitter @KlenderJoey.
Elon Musk
Tesla scrambles after Musk sidekick exit, CEO takes over sales
Tesla CEO Elon Musk is reportedly overseeing sales in North America and Europe, Bloomberg reports.

Tesla scrambled its executives around following the exit of CEO Elon Musk’s sidekick last week, Omead Afshar. Afshar was relieved of his duties as Head of Sales for both North America and Europe.
Bloomberg is reporting that Musk is now overseeing both regions for sales, according to sources familiar with the matter. Afshar left the company last week, likely due to slow sales in both markets, ending a seven-year term with the electric automaker.
Tesla’s Omead Afshar, known as Elon Musk’s right-hand man, leaves company: reports
Afshar was promoted to the role late last year as Musk was becoming more involved in the road to the White House with President Donald Trump.
Afshar, whose LinkedIn account stated he was working within the “Office of the CEO,” was known as Musk’s right-hand man for years.
Additionally, Tom Zhu, currently the Senior Vice President of Automotive at Tesla, will oversee sales in Asia, according to the report.
It is a scramble by Tesla to get the company’s proven executives over the pain points the automaker has found halfway through the year. Sales are looking to be close to the 1.8 million vehicles the company delivered in both of the past two years.
Tesla is pivoting to pay more attention to the struggling automotive sales that it has felt over the past six months. Although it is still performing well and is the best-selling EV maker by a long way, it is struggling to find growth despite redesigning its vehicles and launching new tech and improvements within them.
The company is also looking to focus more on its deployment of autonomous tech, especially as it recently launched its Robotaxi platform in Austin just over a week ago.
However, while this is the long-term catalyst for Tesla, sales still need some work, and it appears the company’s strategy is to put its biggest guns on its biggest problems.
News
Tesla upgrades Model 3 and Model Y in China, hikes price for long-range sedan
Tesla’s long-range Model 3 now comes with a higher CLTC-rated range of 753 km (468 miles).

Tesla has rolled out a series of quiet upgrades to its Model 3 and Model Y in China, enhancing range and performance for long-range variants. The updates come with a price hike for the Model 3 Long Range All-Wheel Drive, which now costs RMB 285,500 (about $39,300), up RMB 10,000 ($1,400) from the previous price.
Model 3 gets acceleration boost, extended range
Tesla’s long-range Model 3 now comes with a higher CLTC-rated range of 753 km (468 miles), up from 713 km (443 miles), and a faster 0–100 km/h acceleration time of 3.8 seconds, down from 4.4 seconds. These changes suggest that Tesla has bundled the previously optional Acceleration Boost for the Model 3, once priced at RMB 14,100 ($1,968), as a standard feature.
Delivery wait times for the long-range Model 3 have also been shortened, from 3–5 weeks to just 1–3 weeks, as per CNEV Post. No changes were made to the entry-level RWD or Performance versions, which retain their RMB 235,500 and RMB 339,500 price points, respectively. Wait times for those trims also remain at 1–3 weeks and 8–10 weeks.
Model Y range increases, pricing holds steady
The Model Y Long Range has also seen its CLTC-rated range increase from 719 km (447 miles) to 750 km (466 miles), though its price remains unchanged at RMB 313,500 ($43,759). The model maintains a 0–100 km/h time of 4.3 seconds.
Tesla also updated delivery times for the Model Y lineup. The Long Range variant now shows a wait time of 1–3 weeks, an improvement from the previous 3–5 weeks. The entry-level RWD version maintained its starting price of RMB 263,500, though its delivery window is now shorter at 2–4 weeks.
Tesla continues to offer several purchase incentives in China, including an RMB 8,000 discount for select paint options, an RMB 8,000 insurance subsidy, and five years of interest-free financing for eligible variants.
News
Tesla China registrations hit 20.7k in final week of June, highest in Q2
The final week of June stands as the second-highest of 2025 and the best-performing week of the quarter.

Tesla China recorded 20,680 domestic insurance registrations during the week of June 23–29, marking its highest weekly total in the second quarter of 2025.
The figure represents a 49.3% increase from the previous week and a 46.7% improvement year-over-year, suggesting growing domestic momentum for the electric vehicle maker in Q2’s final weeks.
Q2 closes with a boost despite year-on-year dip
The strong week helped lift Tesla’s performance for the quarter, though Q2 totals remain down 4.6% quarter-over-quarter and 10.9% year-over-year, according to industry watchers. Despite these declines, the last week of June stands as the second-highest of 2025 and the best-performing week of the quarter.
As per industry watchers, Tesla China delivered 15,210 New Model Y units last week, the highest weekly tally since the vehicle’s launch. The Model 3 followed with 5,470 deliveries during the same period. Tesla’s full June and Q2 sales data for China are expected to be released by the China Passenger Car Association (CPCA) in the coming days.
Tesla China and minor Model 3 and Model Y updates
Tesla manufactures the Model 3 and Model Y at its Shanghai facility, which provides vehicles to both domestic and international markets. In May, the automaker reported 38,588 retail sales in China, down 30.1% year-over-year but up 34.3% from April. Exports from Shanghai totaled 23,074 units in May, a 32.9% improvement from the previous year but down 22.4% month-over-month, as noted in a CNEV Post report.
Earlier this week, Tesla introduced minor updates to the long-range versions of the Model 3 and Model Y in China. The refreshed Model 3 saw a modest price increase, while pricing for the updated Model Y Long Range variant remained unchanged. These adjustments come as Tesla continues refining its China lineup amid shifting local demand and increased competition from domestic brands.
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