The semiconductor crisis has brought the entire auto industry to its knees, and the disruptions it caused will be felt for many months (if not years) to come.
In the midst of this logistics and manufacturing nightmare, Tesla has been remarkably quiet, which is unexpected seeing as its models are among the most microchip-hungry. Well, there’s an explanation for that, as Tesla’s Q2 2021 Earnings Update Letter has revealed.
Tesla has responded incredibly well to the global semiconductor shortage, and the reason for that is its “unparalleled ability to react quickly and mitigate disruptions to manufacturing.” More specifically, the company has switched to new microcontrollers to avoid many of the shortages affecting the industry. Here’s how Tesla explained the workaround in the Q2 2021 Earnings Update Letter.
Gallery: Tesla Fremont Factory
“Our team has demonstrated an unparalleled ability to react quickly and mitigate disruptions to manufacturing caused by semiconductor shortages. Our electrical and firmware engineering teams remain hard at work designing, developing and validating 19 new variants of controllers in response to ongoing semiconductor shortages.”
As a result, Tesla added that it was able to further grow its production, despite the supply challenges in Q2. The microcontrollers, along with developing firmware for microchips made by Tesla’s suppliers, helped the US car company avoid production stoppages on many of its lines.
Actually, the only production interruption occurred at the Fremont plant in northern California in late February-early March this year. At the time, Elon Musk said the Model 3 manufacturing pause was due to “parts shortages” but did not reveal which parts were to blame for the stoppage.
In the first half of this year, many automakers have been forced to slow or even shut down production because of the chip shortage. To prevent the shortage from hitting US companies even harder, the Biden Administration recently proposed a $52 billion investment into semiconductor research and manufacturing.