Tesla is dealing with the global chip shortage by rewriting its vehicle software to support alternative chips, according to CEO Elon Musk during a conference call on Monday. The shortage has thrown the auto industry into disarray at a time when demand for new vehicles is at an all-time high, resulting in factory shutdowns, longer wait times, and higher prices.
Musk stated, “We were able to substitute alternative chips and then write the firmware in a matter of weeks.” “It is not simply a matter of swapping out a chip; you must also rewrite the software.”
This approach has allowed Tesla to maintain high levels of production, delivering over 200,000 vehicles to customers in the last three months, according to the company. Tesla earned $11.9 billion in revenue and $1.1 billion in profit during the quarter.
Tesla isn’t the only company feeling the effects of a global shortage. With car demand at an all-time high, automakers around the world are feeling the effects of production constraints due to chip shortages. This week, Daimler and BMW announced that a lack of chips has forced them to shut down some of their assembly lines, reducing their output by tens of thousands of vehicles.
“The global chip shortage situation remains grave.”
Musk stated that Tesla’s future growth will be contingent on resolving the global semiconductor shortage as soon as possible. “The global chip shortage situation continues to be quite serious,” he said. “For the rest of this year, our growth rate will be determined by the slowest part of our supply chain,” which includes the various chips used in Tesla vehicles.
Tesla relies on chips to power everything from its airbags to the modules that control the vehicles’ seatbelts — which means Tesla is currently missing components that are critical to the vehicle’s safety features. “The module that controls the airbags and seatbelts was a big struggle this quarter,” Musk said. “And, obviously, you can’t ship a car unless you have those.”
Musk expressed scepticism about the future. “It appears to be getting better,” he said, “but it’s difficult to predict.”