Internal strategies come to the rescue
The auto industry has been in panic mode for months – a shortage of computer chips has forced some automakers to suspend production for long periods, leading to empty dealership lots and soaring prices. But one company seemed to avoid the whole crisis – Tesla broke records quarter after quarter and sold almost twice as many vehicles in 2021 as in 2020.
Above: A glimpse of the internal Tesla team working on a Model X (Source: Tesla)
What’s the secret ? Tesla and its usually talkative CEO have said little about “how the automaker has come around the rest of the auto industry,” as The New York Times put it. However, it becomes clear that Tesla’s unified computing architecture and control over its software was, at the very least, a major factor.
Like all other automakers, Tesla was unable to obtain the chips it had ordered in sufficient quantities. Unlike them, however, he was able to rewrite his software to take advantage of available chips. “We used alternative parts and programmed software to mitigate the challenges caused by these shortages,” the company said in its earnings report.
Traditional car manufacturers did not have this option, because their software and hardware are under the control of suppliers. The Times reports that, in many cases, automakers also relied on these suppliers to deal with chipmakers, so they lacked the clout to negotiate with chipsets.
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Above: A look at Tesla’s FSD computer (Source: Tesla)
“Tesla, born in Silicon Valley, has never outsourced its software, it writes its own code,” Morris Cohen, a professor at the Wharton School at the University of Pennsylvania, told The Times. “They rewrote the software so they could replace shortage chips with chips that aren’t missing. Other automakers were unable to do so. Tesla controlled his destiny.
Tesla’s Unified Computing Architecture didn’t make as many headlines as its 0-60 times and convenience features like dog mode and fart mode, but it’s been a huge competitive advantage since the company’s early days. , as co-founder Ian Wright explained to me in a 2014 interview (see chapter 9 of my book, Tesla: How Elon Musk and his company made electric cars cooler and remade the auto and energy industries).
Now, seven years later, traditional automakers are realizing they need to take another page from Tesla’s book and take control of their vehicles’ computer systems. The Times reports that Mercedes plans to use fewer specialized chips and more standardized semiconductors in its next models, and to write its own software. Going forward, Mercedes will “make sure we have personalized and standardized chips in the car,” board member Markus Schäfer told The Times. “Not a thousand different tokens.”
“Probably others were going this route before,” Schäfer added.
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This article originally appeared in Charged. Author: Charles Morris. Source: New York Times