Tesla (TSLA, Financials) will halt production at its Gigafactory in Texas for the first week of July, marking the second production pause at the facility in two months, according to reports.
The shutdown, which affects the Model Y and Cybertruck lines, will begin June 30 and extend through the week of the July Fourth holiday. Employees were reportedly offered paid time off or training opportunities during the pause, which Tesla says will allow for "maintenance and improvements."
The move comes as Tesla continues to deal with slower demand and rising inventory levels. Earlier this month, the company was reported to be renting overflow parking lots across the U.S. to store unsold vehicles.
Cybertruck production has already been scaled back in 2025, with unit sales reportedly down 50% year over year — even as the vehicle became eligible for federal tax credits and cheaper variants were introduced.
Tesla also experienced a 13% drop in total deliveries during Q1 2025, citing the Model Y design refresh as a production bottleneck. However, recent estimates suggest Q2 deliveries could be down as much as 20% from the prior year, raising questions about the health of demand despite elevated production capacity.
The company has been operating most of its global factories at about 60% utilization since 2024, citing persistent inventory buildup and uneven market conditions.
