Model Y and Cybertruck production paused, as demand keeps crashing

Tesla is reportedly adjusting production at its Austin, Texas factory after a shift in demand for its popular Model Y crossover. According to recent reports from several employees, assembly line workers responsible for building the Model Y have been asked to either take a week off or report to the factory for cleaning and training duties instead of their usual production tasks. A similar directive was given to Cybertruck production line workers, who were also told to take a break during the last week of May.

The Model Y has been the company's top-selling car, making this production adjustment a worrying development. Employees cited the break as being longer than usual, and some sources indicated a reduction in overtime hours, with claims that management warned against clocking extra hours. This follows reports of inconsistent work schedules at the Austin plant since February, where some workers claimed they were sent home early on multiple occasions.

This isn't the first production adjustment at the Austin facility. Late last year, Cybertruck line workers were also reportedly told to stay home for a few days. This occurred despite the Cybertruck initially outselling all other electric pickup trucks in the United States. Demand for the controversial vehicle appears to have cooled considerably since its initial hype.

While CEO Elon Musk once projected annual orders of 250,000 Cybertrucks, actual sales figures paint a different picture. Tesla later tempered expectations, aiming for an annual production of 120,000 units, a target that now seems overly ambitious. Data from Cox Automotive shows that Tesla sold 38,965 Cybertrucks last year, and first-quarter sales this year reached 6,406 units, a significant drop from the third and fourth quarters of 2024, during which Tesla sold more than double that number each quarter.

The fact that the Model Y, Tesla's primary revenue driver, is now also experiencing a production pause suggests serious issues with demand. Even with a refreshed Model Y now in production, the company is facing headwinds. During the last year, Tesla saw its global deliveries decline by 13% – its worst delivery numbers in two years. In the United States, Tesla's sales decreased by 5.6%, while the overall automotive industry saw a 7.3% increase in sales.

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