Tesla can't produce additional electric cars. Here's why

Tesla is unable to roll out additional vehicles, as the EV major is constrained by chip supply in the short-term and cell supply in long term. Tesla CEO Elon Musk in a tweet has revealed why his company cannot produce additional electric vehicles.

Musk was recently asked on Twitter about the Tesla Semi, which has been delayed by the automaker's official announcement. On the other hand, at the same time, it is expected to be delivered to PepsiCo this quarter. While clearing the confusion of a Twitter user, Musk said not to put too much emphasis on that, as the company can't produce additional vehicles in volume, due to the supply chain crisis.

"Please don’t read too much into this. As mentioned publicly, Tesla is constrained by chip supply short-term & cell supply long-term. Not possible to produce additional vehicles in volume until both constraints are addressed," Musk wrote. As Musk indicates, if there will be some deliveries of the Tesla Semi, these will be in small numbers.

Both the supply chain issues need to be addressed to produce additional vehicles in volume. While the chip shortage bottleneck is likely to be eased with each quarter, that seems a short term problem. However, the major concern remains with the cell supply for batteries. This is something that could remain for an entire decade. If so, such a crisis will limit all-electric vehicle manufacturing for all the auto manufacturers.

The second issue explains why Tesla has expanded the list of its battery suppliers. Previously, Tesla used to buy EV batteries from Panasonic. Now, the electric carmaker has also added LG Energy Solution and CATL to its list of suppliers. Also, the carmaker has started its own in-house battery cell development. The second supply chain crisis also indicates why Tesla is keen to switch to affordable LFP batteries.