Tesla Model 3

Tesla Model 3

The world's most successful EV chip supplier aims to dominate the electric vehicle market after striking a deal with Tesla to supply chips for the hugely popular Tesla Model 3.

Update: Infineon will now supply chips as a secondary source to Tesla

Although it looked like German chipmaker Infineon wasn't going to land the coveted contract to supply chips for the Tesla Model 3, the story has change in the company's favor. Initially, Franco-Italian chip supplier and Infineon rival, STMicroelectronics, won the Model 3 deal, but Infineon will now be used as a backup plan.

Infineon already supplies chips for the Tesla Model S.

Infineon already supplies chips for the Tesla Model S.

Infineon makes battery and motor chips for eight out of the 10 top-selling EVs globally. However, a primary part of the brand's business is focused on Asia. Infineon CEO, Reinhard Ploss, shared:

"Our success is very much dependent on Asia."

With the potential for a huge Tesla Model 3 contract, Infineon's dependency on Asia may be about to change. Ploss is excited that the Model 3 could be a substantial boost to fuel the company's U.S. market. He told reporters during a recent conference call that Infineon is eager to secure more deals in the American market (outside of ones that the US considers vital technologies anyway).

Aside from the Model 3, Ploss was unwilling to share information about specific models that Infineon supplies. However, we are aware that Infineon's chips are currently used in the Tesla Model S. Kloss said:

"We do not comment on the individual models, but we will also will be present in Model 3."

With pre-orders for the Tesla Model 3 quickly approaching a half-million, and orders streaming in, this is still a big win for Infineon. As more U.S. car companies move into the EV segment, perhaps they will look to Infineon as a viable choice.

Source: Reuters