Tesla is weathering the global chip shortage by rewriting its vehicle software to support alternative chips, CEO Elon Musk said during an earnings call on Monday. The shortage has rocked the auto industry at a time of historic demand for new cars, leading to plant closures, longer wait times and higher prices.
“We were able to replace alternative chips and then write the firmware in a matter of weeks,” Musk said. “It’s not just a matter of changing a chip; you also have to rewrite the software.”
This approach has helped Tesla maintain high levels of production, delivering more than 200,000 vehicles to customers in the past three months, the company said. Tesla generated $11.9 billion in revenue in the quarter, including $1.1 billion in profit.
Tesla is not alone in feeling the effects of the global shortage. With the demand for cars at an all-time high, automakers around the world are feeling the production constraints with a shortage of chips. This week, Daimler and BMW said the lack of chips has led to the shutdown of some of their assembly lines, which will cut the companies’ production by tens of thousands of vehicles.
Musk said Tesla’s future growth will depend on a quick fix to the global semiconductor shortage. “The global chip shortage remains quite severe,” he said. “For the rest of this year, our growth will be driven by the slowest part of our supply chain,” including the wide range of chips used in Tesla’s vehicles.
Tesla relies on chips to power everything from the airbags to the modules that control the vehicles’ seat belts – which now means Tesla is missing components essential to the vehicle’s safety features. “A big problem this quarter was the module that controls the airbags and seat belts,” Musk said. “And of course you can’t ship a car without it.”
Musk sounded an uncertain tone about the future. “It looks like it’s getting better,” he said, “but it’s hard to predict.”