He said that a shortage of computer chips, which has affected production of vehicles at automakers around the world, left most analysts expecting that Tesla would likely build somewhere between 150,000 to 170,000 vehicles in the quarter. He said Tesla probably shut production of the Model S and Model X cars because of the chip shortage, and instead use the chips it has to build its higher volume vehicles.
"The S and X are on a slow sunset path," Ives said. "The demand for those models has been exhausted. It was telegraphed [Tesla] would build a negligible number of those in the quarter. Based on demand, it makes sense they're were going to bet their chips on the Model 3 and Model Y. Tesla is now about those models, and the [upcoming] Cybertruck."
Other automakers have shut production of some of their less popular models to keep the supply of chips for their better selling models, such as pickup trucks and large SUVs, which not coincidentally are their more profitable models.