Tesla Schedules Production Pause at Austin Plant
Tesla will temporarily halt operations at its Austin, Texas Gigafactory later this month, a move it says will allow it to run maintenance at the plant. But the move also will permit it to draw down increasingly bloated inventories of both the slow-selling Cybertruck pickup and the recently updated Model Y SUV.
Though it remains the largest U.S. producer of battery-electric vehicles, the automaker has undergone a sharp decline in sales this year, something analysts blame on both rising competition and the backlash that’s hit Tesla due to CEO Elon Musk’s political shift to the hard right.
The production pause will come just days after the Austin plant is set to roll out the first Tesla robotaxi – something Musk has declared essential to the automaker’s future. But a group of Texas lawmakers have called on Tesla to put the launch of its new driverless ride-sharing service temporarily on hold.
Cybertruck Production Paused…Again
Tesla revealed plans to pause production at the Texas Gigafactory during a staff meeting this week, according to Business Insider. The Austin team was told the move was meant to give Tesla time to performance maintenance at the factory.
“Most automakers have a summer shutdown for a couple weeks which they use to work on their machinery,” said Sam Abuelsamid, lead analyst with Telemetry Research. “I wouldn’t totally rule out they’ll do some maintenance,” he added, “but I’m skeptical that’s the only reason”
This marks the third time that production of the Cybertruck will have been paused over the past 12 months, but the first halt for the updated Model Y launched around the end of the first quarter.
Bulging Cybertruck Backlog
In Farmington Hills, Michigan, scores of unsold Cybertrucks have been stored in the parking lot of a now-closed Bed Bath & Beyond store. The situation reportedly is repeated at locations around the country as demand for the electric truck continues to slow.
Shortly after it was first revealed in November 2019, Tesla claimed to have received 1 million advance reservations, complete with $100 deposits. That led Tesla to tool up the Austin plant to produce as many as 250,000 of the trucks annually. But demand hasn’t come close.
The automaker confirmed selling than 39,000 of the pickups all last year and the trendline has continued declining this year, S&P Global Mobility reporting just 7,126 Cybertrucks were registered during the first quarter of 2025. To put that into perspective, that’s 10% fewer than the 7,913 Ford F-150 Lighting EVs registered during the same period.
Updated Model Y Struggles to Gain Momentum
There are indications another critical Tesla product line may be fizzling, despite a major midcycle refresh. The Model Y has been the automaker’s best-selling product and the update, known insider Tesla by its codename, Jupiter, was expected to reverse declining sales.
Though Tesla only reports production and delivery numbers on a quarterly basis, preliminary registration data does not look encouraging, said Abuelsamid. “All indications are that the refreshed Model Y isn’t selling as well as expected, nor even as well as the old one did last year.”
Tesla
Tesla’s U.S. EV Market Share Dips Below 50%
Tesla remains the EV segment’s 800-pound gorilla in the U.S. market, but its share is now below 50% and continuing to fall.
New EV registrations, overall, fell 4.4% in April, marking the first monthly decline in 14 months, according to S&P. But the majority of brands in the battery-electric sector actually reported gains. Chevrolet and its upscale sibling Cadillac were up by triple digits.
“It was mostly Tesla,” said Sam Fiorani, lead analyst with AutoForecast Solutions. The automaker reportedly suffered a 16% year-over-year dip in registrations in April, despite the launch of the new Model Y.
Analysts Cite Weak Product Pipeline and Musk’s Politics for Tesla Slowdown
A variety of factors appear to be in play. To start, the Model Y update didn’t go far enough, said Fiorani, contending that “a ground-up makeover” was what Tesla really needed.
If anything, Tesla simply doesn’t have enough product to compete as more and more competition come to market, he and other analysts agree. The automaker continues to delay introducing a new entry model to compete with the likes of the Chevrolet Equinox EV that starts in the mid-$20,000 range after factoring in federal incentives.
Then there’s Musk’s active move to the political right which became increasingly obvious after his October 2022 takeover of social media site Twitter and his subsequent role as head of the controversial Department of Government Efficiency under Pres. Donald Trump. That’s alienated many traditional Tesla buyers, Fiorani and Abuelsamid agreed, leading to protests and boycotts.
Robotaxi Launch Scheduled
Even before Musk shifted his focus away from politics last month he was signaling to investors that the company’s future would become less about EVs and more about technologies such as AI, humanoid robots and autonomous ride-sharing.
Earlier this month, Musk said he was “tentatively” scheduling a rollout of the first 10 to 20 “robotaxis” on June 22 from the Austin factory – though he warned the date could be pushed back because, “We are being super paranoid about safety.”
The first of those driverless vehicles will be modified versions of the new Model Y, though Tesla continues development of a new model, the CyberCab, specifically designed for the driverless service.
New Texas Law to Impose Stricter Rules on Autonomous Vehicles
Musk isn’t the only one “paranoid” about safety. A group of Democratic lawmakers from Texas have requested Tesla delay the robotaxi launch “in the best interest of both public safety and building public trust in Tesla’s operations.”
They want Tesla to wait until a new law, revising the state’s earlier autonomous vehicle regulations, goes into effect on September 1.
The new rules will require, among other things, that companies like Tesla report any failures, have a limp-hone mode for any vehicle that may suffer glitches while in operation, and have a plan of action in the event of a more serious crisis. Even if it declines to delay the robotaxi launch, the Texas lawmakers are hoping to get a commitment from the automaker that it will obey the new guidelines without waiting for September.
