Elon Musk commented on the current global microchip, comparing it to the toilet paper shortage in the early pandemic, and admitted that it is a significant challenge for Tesla.
The pandemic has resulted in an increase in demand for many electronics and computers that the supply chain couldn’t handle, especially the semiconductor industry.
This microchip shortage, in turn, affected the automotive industry, which has increasingly become a big consumer of microchips.
We previously released a deep-dive report on how it is affecting electric vehicle production as several automakers had to halt production until chip supply could catch up.
Pat Gelsinger, CEO of Intel, one of the biggest semiconductor companies, recently said that it could take a “couple of years” for the industry to catch up to the surging demand.
As we previously reported, Tesla was also affected by the chip shortage, but the automaker said that it managed to contain the problem during the first quarter by pivoting some chips to microcontrollers:
“In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers.”
But Tesla is apparently not out of the woods when it comes to the chip shortage.
When discussing Tesla’s performance this quarter, Musk said that Tesla’s current biggest challenge is the supply chain issue, especially “microcontroller chips”:
Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it. Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale. That said, it’s obv not a long-term issue.
A recent report from the Financial Times claimed that Tesla is currently taking significant steps to secure more chips, including paying in advance for supply and even considering buying a chip factory.
Tesla getting into chip manufacturing would be a massive endeavor, but it wouldn’t be too much of a stretch considering the automaker already has its own chip design team.
However, the report stated that the idea of buying a plant was in the “preliminary stage,” according to unnamed sources.