Tesla output rises amid higher prices, chip shortages

Photo: EPA

The output of the electric car maker Tesla surged in the second quarter to top 200,000 units. The volume exceeds twice the results posted in 2020, CNN reported. The car maker dismissed higher prices of inputs as well as reputation difficulties in China and a shortage of semiconductor chips to stay on track its original 2021 output plans.

Orders and deliveries were also up modestly from the first quarter of this year. Deliveries came in at 201,250, compared to about 91,000 a year ago and 184,800 in the first quarter. The entire auto industry has been struggling with the chip shortage. Tesla CEO Elon Musk called the shortage a "huge problem" for Tesla.

"Our teams have done an outstanding job navigating through global supply chain and logistics challenges," said Tesla's statement about second-quarter sales. Tesla also has raised car prices to deal with rising raw material costs, which is also a problem across the industry.

But Tesla has been uniquely dogged by bad publicity in China, the world's largest market for car and EV sales, over safety and quality concerns. A group of Tesla owners protested at the Shanghai auto show in April. And nearly 300,000 Teslas built at its relatively new Shanghai plant were recalled a week ago. There have been concerns among investors that Tesla could be facing long-term problems in China.

Tesla is facing growing competition from electric vehicles from established automakers such as Volkswagen, General Motors and Ford. GM reported US EV sales jumped 350% in the quarter after it introduced updated versions of its model. GM has yet to report second-quarter sales in China but through the first quarter it said its Wuling Hong Guang Mini EV, introduced last year, is the best-selling electric vehicle in China. Volkswagen has passed Tesla in EV sales in numerous European markets, and Ford's new Mustang Mach-E has been taking share from Tesla, according to analysis by Morgan Stanley. Ford sold 13,000 of the model in the US since deliveries started earlier this year.

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