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How Tesla Overcame the Global Supply Chain Issues That Knocked Out the Rivals



San Francisco – Tesla Sources and experts say Inc’s ability to design components in-house has made the automaker nimble in adapting parts and dealing with supply-chain issues that make it difficult much more for other automakers.

Tesla boosted deliveries by 87% to a record high in 2021, pushing its shares up more than 13% on Monday.

Here are some ways Tesla overcomes supply chain challenges.

HOW TESLA COPY WITH A COMPLETE GLOBAL CHIP

Tesla told some customers that they could receive vehicles with some missing parts, such as Bluetooth chips and USB ports. Tesla also removed some features like radar sensors and lumbar support for the front passenger seats, making the car less complicated to build. Tesla did not respond to Reuters’ request for comment.

Tesla also raised vehicle prices to address higher costs, including “promotion costs” for parts. US consumers have to wait seven months if they order Model Y version whose price has increased by 18% last year.

Tesla CEO Elon Musk says Tesla can also replace chips to replace some of the chips that are in short supply. Volkswagen CEO Herbert Diess said Tesla’s ability to rewrite software that powers new chips in two to three weeks is impressive.

HOW IS TESLA DIFFERENT TO OTHER CARS?

Tesla designs more hardware and writes more software than many of its competitors, who depend on the efforts of auto suppliers. Musk has called the company “a silly vertical integration compared to other auto companies.”

“We design the boards ourselves, which allows us to modify their designs quickly to accommodate alternative chips like powerchips,” said a Tesla insider.

In-house engineers design much of the complex software that powers the Tesla, which Musk has described as a “computer on wheels.”

Tesla also designs the chips used in its driver assistant systems and manufactures parts ranging from seats to seats. the battery indoor cells. It also owns its own direct sales, service and charging network.

“We’re designing and building more models than other OEMs (original equipment manufacturers) who will largely go to the traditional supply base and, as I call it, nominal engineering.” item. So it’s not very risky,” Musk said.

Ambrose Conroy, CEO of Seraph Consulting, said: “They control what’s going on in that car to a degree that no other carmaker wants to do. That’s much more in line with innovation. integrated Henry Ford originally with the Model T.”

HOW TO ORDER TESLA SECURITY CHIPS

In 2020, many automakers have slashed chip orders as the pandemic and shutdown measures hit demand. But Tesla never lowered its output forecast with suppliers, as it was expected to grow rapidly, which helped it pass lack of chips, said Tesla Chief Financial Officer Zach Kirkhorn.

“They’re smarter about this than other companies about making sure they have buffer stock,” said the Tesla supplier executive.

Tesla’s direct relationship with chip suppliers allows Tesla to grow faster than traditional automakers, which rely on tier-one suppliers with ties to chipmakers, Kevin Anderson , Lead Consultant at Write-Tek, said.

(Reporting by Hyunjoo Jin; Editing by Peter Henderson and Richard Pullin)



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