Tesla chief Elon Musk tweeted on Tuesday that supply constraints related to battery cells are making it difficult to scale up production of its long-delayed Tesla Semi electric commercial truck, sending the company's shares down over 2%.

"Demand is no problem, but near-term cell supply makes it hard to scale Semi. This limitation will be less onerous next year," the billionaire entrepreneur said.

Musk's statement was in response to a tweet which referred to a news report about the electric carmaker receiving an order for ten Semi trucks from MHX Leasing.


When Musk unveiled the prototype of the futuristic, battery-powered Semi in 2017, he said the Class 8 truck would go into production by 2019. That timeline was later pushed to 2021 and the company said it expects to start delivering the model too.

Last week, Musk suggested that the bottlenecks would cause the mass production to be delayed until 2022.

News website Electrek reported last week that PepsiCo was expecting 15 Tesla Semi trucks by the end of the year.

The carmaker's shares were last down at $598.80 before the opening bell on Tuesday.

Tesla (NASDAQ: TSLA) is one of several electric vehicle stocks that gained a boost on Wall Street following the announcement of a $174 billion aid package that would assist the growth of EV companies.

On Wednesday, the White House announced that President Joe Biden was planning to assist the United States’ rollout of electric vehicles to keep up with the highly competitive and robust Chinese EV market. After indicating that the U.S. EV market is only a fraction of the size of the Chinese sector, the White House said Biden was planning to boost the expansion of EVs by offering a massive $147 billion investment package to expand electric vehicle infrastructure.

“U.S. market share of plug-in electric vehicle sales is only one-third the size of the Chinese EV market,” the White House said in a statement. “The president believes that must change. He is proposing a $174 billion investment to win the EV market.”

China has had a vastly expanding EV market over the past few years. Tesla sees the market as one of its biggest focuses moving forward, and CEO Elon Musk recently said that China is the key to Tesla’s long-term growth and will be its biggest market in the coming years.

Musk said:

“China in the long term will be our biggest market, both where we make the most number of vehicles and where we have the most number of customers. I’d like to strike an optimistic note, and I’m very confident that the future of China is going to be great and that China is headed towards being the biggest economy in the world and a lot of prosperity in the future.”

The massive plan from Biden includes enhancing “domestic supply chains from raw materials to parts, retool factories to compete globally, and support American workers to make batteries and EVs,” the White House added.

Manufacturers are not the only ones who will benefit from the plan, the Biden White House added. “It will give consumers point of sale rebates and tax incentives to buy American-made EVs, while ensuring that these vehicles are affordable for all families and manufactured by workers with good jobs.” Additionally, “it will establish grant and incentive programs for state and local governments and the private sector to build a national network of 500,000 EV chargers by 2030, while promoting strong labor, training, and installation standards” for the government sector.

Upon the news of the EV plan, Tesla shares shot up and are currently trading at $665.16, up $29.54 or 4.65%. Workhorse Group and Fisker also saw gains of .37% and 2.81%, respectively, according to The Street.

Tesla will report its production and delivery figures sometime next week upon Q1 2021 ending. Wall Street has predicted 162,000 vehicle deliveries, according to FactSet. Analysts at various firms are expecting up to 174,000 deliveries for the first quarter of 2021.

Apple announced Wednesday that it’s building a big battery storage project at a Northern California solar farm it spearhead in 2015. But what the company didn’t share is that the battery packs will come from Tesla, The Verge has learned.

The newly-announced setup, which will store up to 240 megawatt-hours of energy, was approved by the Monterey County Board of Supervisors in 2020, according to documents submitted last year. It will consist of 85 Tesla lithium-ion “megapacks” and be used to help power the company’s corporate headquarters in Cupertino. Monterey County’s planning chief confirmed that Apple will use the Tesla batteries in an email to The Verge. Apple declined to comment. Tesla did not respond to a request for comment.

Tesla first announced the megapack battery system back in 2019. The 60MW storage setup Apple will be using is not Tesla’s biggest, though. The company has built bigger overall battery storage solutions in Australia and south of Houston, Texas of around 100MW in size. Still, Apple touted it as “one of the largest battery projects in the country” in a press release, saying the battery system could power more than 7,000 homes for a whole day. The Tesla batteries will make it possible for Apple to store energy generated by its 130-megawatt solar array at the farm, which is called California Flats.

“The challenge with clean energy — solar and wind — is that it’s by definition intermittent,” Apple VP Lisa Jackson told Reuters on Wednesday. “If we can do it, and we can show that it works for us, it takes away the concerns about intermittency and it helps the grid in terms of stabilization. It’s something that can be imitated or built upon by other companies.”

While Apple uses lithium-ion batteries in many of its products, it’s not known to be working on any grid-scale projects. The company is reportedly developing a lithium iron phosphate battery for its electric car project, though.

Apple and Tesla don’t have much overlapping history, though each company is notorious for poaching talent from the other. Tesla CEO Elon Musk also said in December that he tried to pitch the idea of Apple buying his company back in 2018, but that Apple CEO Tim Cook “refused” to take the meeting.

Tesla is best known for its electric cars, but it’s spent years trying to build up an energy storage business to compliment the solar products it acquired when it bought Solar City. It has gotten increasingly involved in large-scale energy storage projects like Apple’s over the years in addition to its home battery business.

While it’s still modest compared to the billions of dollars generated by Tesla’s car business, the energy storage division’s products has already netted at least one other strange bedfellow customer: in 2019, Volkswagen announced it was using Tesla batteries at some of its Electrify America charging stations.

BEIJING (Reuters) - A Volkswagen joint venture in China has agreed to buy green car credits from Tesla to help meet local environmental rules, three people briefed on the matter told Reuters.


The deal, the first of its kind to be reported between the two companies in China, highlights the scale of the task Volkswagen faces in transforming its huge petrol carmaking business into a leader in electric vehicles to rival Tesla.

Shares in Volkswagen, the world’s second-biggest automaker, have soared this year as investors warm to its plans to go electric. But in China, and elsewhere, the German company is still heavily reliant on traditional combustion-engine vehicles.

China, the world’s biggest auto market where over 25 million vehicles were sold last year, runs a credit system that encourages automakers to work towards a cleaner future by, for example, improving fuel efficiency or making more electric cars.

Manufacturers are awarded green credits that can be offset against negative credits for producing more polluting vehicles. They can also buy green credits to ensure compliance with overall targets, though trade is usually between affiliated companies that share a major stakeholder.

To help meet increasingly tough targets, Volkswagen’s joint venture with state-owned Chinese automaker FAW, or FAW-Volkswagen, has agreed to buy credits from Tesla, the sources said, declining to be named as the talks were private.

Volkswagen declined to comment on the deal. It said in a statement it was “strategically targeting to be self-compliant” with rules in China, but that if required it would buy credits.


Tesla did not respond to requests for comment.

FAW-Volkswagen sold 2.16 million cars last year. The business and another Volkswagen venture in China - with SAIC Motor - were among the most negative credit-generating automakers in the country in 2019, according to data from China’s Ministry of Industry and Information Technology.

The ventures’ gasoline sedans and SUVs have so far proved far more popular in China than their electric vehicles.

It is unclear how many green credits FAW-Volkswagen will buy from Tesla, but FAW-Volkswagen’s offer was around 3,000 yuan per credit, higher than prices in previous years, the sources said.

The deal effectively sees Volkswagen, the biggest foreign carmaker in China, subsidising a rival while the German group ramps up production of electric vehicles. Its ventures in China plan to roll out five electric ID series models this year.

In the United States, where regulators also set environmental requirements, Tesla has sold regulatory credits to rivals such as Fiat Chrysler, now part of Stellantis, but it has not so far reported any deals in China, where it started making cars in late 2019.

Tesla’s revenue from selling regulatory credits totalled $1.58 billion in 2020, according to a regulatory filing.

Tesla just reported first-quarter vehicle production and delivery numbers for 2021. In total, it delivered 184,800 vehicles and produced 180,338 cars.

Analysts were expecting Tesla to deliver around 168,000 vehicles during this period, according to estimates compiled by FactSet as of April 1. Estimates ranged from 145,000 to 188,000 deliveries.

All of the electric vehicles it produced were Model 3 sedans and Model Y crossover SUVs, though it also delivered 2,020 Model S sedans and Model X SUVs.

Tesla’s operations during the quarter ending March 31, 2021, were impacted by a fire at its Fremont, California factory, temporary closures that CEO Elon Musk attributed to parts shortages, a broader chip shortage in the industry, port capacity issues and the ongoing pandemic.

During the same period a year ago, with the novel coronavirus spreading the world, Tesla reported it produced 102,672 vehicles and delivered 88,400 vehicles. Production of its crossover SUV, the Tesla Model Y, had started in earnest as of January last year, with deliveries taking off in March 2020.

At that time, Model 3 and Model Y deliveries — the closest approximation to sales numbers reported by Tesla — amounted to about 86% of total deliveries. Adding the Model Y to its menu, and production at its Shanghai plant, the first plant built outside of California, helped Tesla grow sales by about 36% in 2020 versus 2019.

During the company’s most recent earnings call, CFO Zachary Kirkhorn said that in 2021: “Specifically for Q1, our volumes will have the benefit of early Model Y ramp in Shanghai. However, S and X production will be low due to the transition to the newly re-architected products.”

At an annual shareholder meeting in 2020, CEO Elon Musk told shareholders he expected deliveries to hit an implied range between 477,750 and 514,500 cars for the year. Tesla hit the mid-range of that window, delivering 499,550 cars for the year, its best sales volume to date.

Musk and Kirkhorn declined to give specific guidance for 2021 deliveries during that call but said they would offer more clarity during the second quarter. Kirkhorn said on the call: “We continue to expect a long-term volume CAGR of 50%, of which we may materially exceed this in 2021.” This goal was reiterated by Tesla’s then-President of Automotive Jerome Guillen on the same call. (Guillen has moved into the role of President of Heavy Trucking since then.)