Musk: Chip And Ship Shortages Main Threats To Tesla Sales Growth

This combination would be the only thing stopping Tesla's sales from growing at a rate of more than 50%.

By: Dan Mihalascu

Oct 11, 2021 at 4:25pm ET

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Elon Musk believes that a combination of a global shortage of chips and ships would be the only thing preventing Tesla from maintaining a sales growth of more than 50 percent.

In September, Tesla’s CEO said the semiconductor shortage was a "short term" problem and that several chip making plants are being built. He predicted the ongoing shortage would be over by next year.

However, there’s another issue that threatens to mess with automakers’ manufacturing targets, namely supply chain issues. At the company’s annual shareholder meeting held in Austin, Texas, last week, Musk said Tesla was grappling with “lots” of supply chain challenges during the previous quarter.

“One of the biggest challenges we had in Q3 was can we get enough ships. There was a huge ship shortage.”

Gallery: Tesla Fremont Factory

According to the executive, it may be at least a year before things start to get better. He declared himself optimistic that Tesla should be through its severe supply chain shortages in 2023. Musk also said the “significant cost pressure” in the supply chain is what forced Tesla to increase car prices, at least temporarily.

“The sheer amount of money we’re spending on flying parts around the world isn’t great.”

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In his opinion, a double-whammy of a global shortage of chips and ships could be the only thing threatening Tesla’s sales growth of more than 50 percent.

“We’ve had a fantastic year, we had record vehicle deliveries. It looks like we have a good chance of maintaining that. Basically, if we can get the chips we can do it. Hopefully this chip shortage will alleviate soon but I feel confident of being able to maintain something like at least above 50 percent for quite a while.”

The chip shortage is yet to slow Tesla down as last week the company reported record deliveries of 241,300 cars worldwide in the third quarter, significantly more than the previous high of 201,250 vehicles in the second quarter.