For almost a year, the lack of microchips has been affecting numerous industrial sectors and in particular the automobile sector, with some of the largest car companies in the world having to significantly slow down production, resigning themselves to a reduction in their revenues. The problem is affecting Ford, Volkswagen, Daimler and Stellantis, while it concerns very little Tesla, the Elon Musk company that produces electric cars, thanks to greater flexibility in its development and production cycles than the larger and more structured automotive companies.
Over the past few decades, the amount of electronics in vehicles has increased enormously, with computers and on-board systems to regulate engine activity, braking systems, steering and parking sensors, not to mention entertainment and parking devices. connect your smartphone. This makes it necessary to use a large amount of microchips on each vehicle, with dedicated software for managing the various functions.
In the first half of 2020, due to the coronavirus pandemic, the pace of car production had slowed to a near halt around the world. In the second half of the year, production then resumed at a very rapid pace, which put producers in difficulty. Most automotive companies, to keep costs down, usually maintain a reduced inventory of components: the business model (which is called “just in time supply chain”) requires that you buy almost exclusively what you need for production already planned, with very tight margins.
Auto companies that came from a period of near-standstill production found themselves with insufficient inventory, and were rushed to place massive orders for microchips. At that point, however, the companies that produce them were already at the limit of their production capacity, because many others (for example the manufacturers of electronic devices) had had similar increases in demand, and had placed many new orders. Furthermore, microchips for the IT sector are more profitable for those who produce them, because they are more elaborate than those for many car components, sold at lower prices and with less bargaining power. The microchip manufacturers had therefore paid less attention to the car sector, favoring other more profitable ones.
Tesla, which uses many microchips in its electric cars, had found itself in the same difficulty as the competition. Earlier this year, he reported problems with various suppliers to investors, including delays in deliveries and poor availability of components including chips, called “one of the greatest challenges Tesla has ever faced.” The company had not ruled out that these problems could be reflected in the production of new cars.
The announcement had alarmed analysts and investors, worried about a drop in production that would have great consequences for Tesla's finances, which have only improved in recent years after a severe period of crisis.
A few months later, things went better than expected for Tesla. Unlike large automotive companies, which work on much larger volumes, with less flexibility in the production phases, Elon Musk's company has managed to reprogram part of the supply of microchips by exploiting greater flexibility in their systems, both in production plants. both on individual cars.
Musk, for example, said at the end of July that Tesla had managed not to slow down too much thanks to a rapid replacement of some components in its cars, which had made it possible to activate contracts with new suppliers: “We were able to replace the chips with some alternatives, and then reprogram them within a few weeks. It wasn't just a matter of replacing a chip: we also had to rewrite the software “.
Unlike other automobile manufacturers, Tesla internally develops more systems for use directly in its vehicles, including the destination and functions of the microchips. Its developers and engineers were therefore able to use the microchips already used for some functions for other uses, favoring the most available types.
This and other measures have allowed Tesla to maintain high levels of production. In the second quarter of this year, the company sold over 200,000 cars, while in the recently completed third quarter, more than 240,000 electric vehicles were delivered, a new record above analysts' forecasts. While many auto companies have cut production in recent months, Tesla has managed to significantly increase it between July and September, up 73 percent over the same period last year.
Musk recently said that the microchip shortage is a “short-term” problem and that it should have no particular long-term repercussions, as new plants are under construction to produce microchips that should be ready for next year. Musk has not provided many other details, however, and his predictions do not agree with those of most analysts, who believe the crisis will last rather long, at least until 2023. It is true that some of the largest microchip manufacturers, such as Intel and TSMC, they plan to build new factories, but it will take years before they are ready.
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