Tesla's Elon Musk reiterates supply chain issues
Tesla is facing supply limitations with 'certain standard automotive chips'
Tesla chief Elon Musk reiterated that the company is still facing "extreme supply chain limitations" due to computer chip shortages brought on by the COVID-19 pandemic.
"As publicly disclosed, we are operating under extreme supply chain limitations regarding certain "standard" automotive chips," Musk tweeted Thursday. "Most problematic by far are Renesas & Bosch."
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It's an issue plaguing the entire industry and Musk has already made it clear in the past that Tesla is no exception.
"For the rest of this year, our growth rate will be determined by the slowest part in our supply chain," Musk said on an earnings call with analysts in July. "Chip supply is fundamentally the governing factor on our output."
WHAT CAUSED THE GLOBAL SEMICONDUCTOR CHIP SHORTAGE?
The shortage in semiconductor chips — which power a wide range of products that connect, transport and entertain consumers — started last summer when the pandemic forced chip factories to shut down, particularly overseas, where the majority of the processors are made.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| TSLA | TESLA INC. | 357.09 | +11.93 | +3.46% |
By the time they started to reopen, they had a backlog of orders to fill. Chipmakers were then swamped by unforeseen demand, further compounding the issue. As a result, most automakers had to halt production at times, creating shortages and driving up demand and prices.
To try and combat this chip shortage, Tesla rewrote its vehicle software to support alternative chips.
In its second-quarter earnings call, the company disclosed that it was still able to produce and deliver over 200,000 electric vehicles and achieved an 11% operating margin.
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Automakers hit the hardest by the shortage, which forced them to cancel shifts and temporarily close factories, include Ford, General Motors, Stellantis (formerly known as Fiat Chrysler), Volkswagen and Honda.
Others, most notably Toyota, aren’t being affected as dramatically.
FOX Business' Lucas Manfredi and The Associated Press contributed to this report.