Tesla in dire straits as reports say company halts production of Cybertruck, Model Y— Where is the stock headed?

Tesla is temporarily shutting down production of its Cybertruck and Model Y vehicles for a week at its Austin, Texas, plant, as per a report. Following the news, the EV maker's stocks had dropped almost 4% on Tuesday, reported CNBC.

Tesla's Third Production Pause in a Year

Business Insider reported, citing a staff meeting where the announcement was made that Cybertruck and Model Y vehicles will halt production from June 30. The EV giant's plan to halt production for maintenance on production lines would be the third such pause at the Austin facility in the past year, as per the report.

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Tesla Halts Cybertruck and Model Y Production Ahead of Robotaxi Launch

The delay arrives just days ahead of Tesla's planned debut of its new Model Y robotaxi in Austin, currently scheduled for June 22, according to CNBC. The robotaxi will be equipped with a new version of the company’s “Full Self-Driving” technology, as per the report.

On June 10, Tesla CEO Elon Musk even reposted a video on his social media site X (previously Twitter) of a Model Y robotaxi on a road in Austin, which added to the buzz for the much-anticipated launch, according to CNBC.

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Safety Concerns Shadow the Launch

However, public safety advocacy groups have claimed that the EV maker's partially automated driving systems have safety problems, as per the report. The Dawn Project, a technology safety group critical of Tesla’s FSD technology, even demonstrated a safety situation using a Model Y equipped with the currently available software to show that it lacked safety, as per CNBC.

National Highway Traffic Safety Administration data showed that in the United States, Tesla's vehicles with the standard Autopilot package, or a premium “Full Self-Driving” option, also known as FSD or FSD supervised, have been involved in hundreds of collisions, including dozens of fatalities, reported CNBC.

FAQs

Why is Tesla halting production in Austin?
For scheduled maintenance on the production lines, this will be the third such pause at the facility in a year.

How did the stock market react?
Tesla’s stock dropped nearly 4% on Tuesday following the news.