Benzinga | Sep 2, 2021 09:24AM EDT

Tesla Giga Shanghai Production Halted For 4 Days In August Due To Chip Shortage: Report

Tesla, Inc. (NASDAQ:TSLA) has faced another setback in China, a region where the electric vehicle giant is already witnessing a sales slump.

What Happened: Tesla temporarily stalled operations at one production line at its Giga Shanghai for four days in August, Bloomberg reported, citing people familiar with the matter.

The halting was due to a paucity of key chips, including electronic control units, the report said. The lack of electronic control units primarily impacted Tesla Model Y production.

Production at Giga Shanghai has now returned to normal, according to Bloomberg.

Related Link: Tesla's Model Y Makes News, Here's Why

Tesla isn't one the feel the pinch of the chip crunch. Chinese EV startup Nio, Inc. (NYSE:NIO) reported Wednesday soft delivery numbers for August and also trimmed its production guidance for the third quarter, citing the chip shortage.

Toyota Motor Corporation (NYSE:TM), which was immune to the global semiconductor shortage for much of 2020, is reportedly planning a 40% production cut for September due to the malaise.

Tesla's China Woes Deepen? Tesla has been having a tough time in China, with volatility in sales and quality issues with its vehicles. Additionally, the Chinese government has barred Tesla vehicles from sensitive military compounds due to security concerns regarding cameras installed in the vehicles.

With the chip shortage, the EV maker now has one more problem at hand to attend to in order to do well in China, which is considered one of its key markets.

Related Link: The Global Chip Shortage: Worst-Hit Stocks And Industries, Potential Beneficiaries

Photo: Tesla CEO Elon Musk at the Shanghai Gigafactory groundbreaking.