Tesla suspends production of the Cybertruck and Model Y at its Austin plant: what's happening with the electric-car giant

Tesla will temporarily suspend assembly of its flagship models—the Cybertruck and Model Y—at its U.S. plant in Austin, starting May 26, 2025. The production halt will last one week and, according to Business Insider, is due to internal challenges, a decline in demand, and resource optimization.

Why Tesla Is Halting Electric Vehicle Production in the U.S.

Tesla is facing a decline in electric vehicle sales: in the last quarter alone, deliveries to customers fell by 13%, and the gap between vehicles produced and delivered reached 26,000 units. Production also fell by nearly 100,000 vehicles compared to the previous period.

Tesla’s Texas plant, located near the company’s headquarters, is the newest facility where the updated 2024 Model Y and the recently launched Cybertruck are assembled. However, since February 2025, employees have reported regular disruptions and a reduction in overtime. Workers were even threatened with fines for working overtime, and in May, the company laid off 50 employees from the Austin plant.

What Tesla Is Offering Employees During Downtime

Workers involved in assembling the Cybertruck and Model Y can take paid leave or temporarily switch to other tasks, such as assisting with facility maintenance or participating in training and education programs. This shutdown at the end of May is unusual: last year, production did not stop during this period.

The New Model Y: An Attempt to Boost Demand

Amid a general decline in interest, Tesla unveiled a new rear-wheel-drive version of the Model Y. It is priced at $44,990, which is $4,000 less than the all-wheel-drive version. The new model has a range of over 570 miles on the EPA cycle and accelerates to 96 km/h in 5.4 seconds, which is slightly slower than its predecessor (4.6 s), but with better range performance.

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