Tesla slips as report says the EV maker will idle Model 3 line at its Freemont factory for two weeks

Tesla slips as report says the EV maker will idle Model 3 line at its Freemont factory for two weeks

Shares of Tesla slipped as much as 4% on Thursday after a report said the EV maker will idle the Model 3 line at its Freemont, California factory for two weeks.

Staff on the Model 3 line in Fremont were told production would be shut down until March 7 without an explanation, according to unnamed Bloomberg sources.

The workers were told they would be paid through the end of this week, but would not be paid through next week, and were advised to take vacation time if they had it.

Analyst Dan Ives of Wedbush Securities said the shutdown is most likely "chip shortage driven" in a note to clients Thursday morning. Ives said he was "not overly concerned" with the supply chain and factory disruption and argued it won't change "the overall delivery trajectory for 1Q and 2021" for Tesla.

Automobile manufacturers have been facing a severe semiconductor shortage over the past few months.  

Semiconductors, also known as chips, are used in everything from cell phones to fighter jets, and rising demand caused by a 5G explosion, cryptocurrencies' rise, the EV boom, and a number of other factors are leading to serious supply constraints.

Earlier this month the supply issues forced GM to shut