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Tesla cut a steering component to deal with chip shortage


The Tesla Gigafactory is a place where employees work. It was opened in Shanghai (east China) on Nov. 20, 2020. U.S.-based electric vehicle company Tesla built in 2019, its first Gigafactory in China outside of the United States, in the Lingang region. It has a design annual production capacity for 500,000 units.

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Tensions to achieve fourth-quarter sales targets while simultaneously coping with widespread shortages in semiconductors made it difficult for the company. TeslaAccording to internal correspondence and two employees, the decision was made to take out one of two electronic control units normally found in some Model 3 and Model Y made-in China cars.

Tesla didn’t disclose this exclusion. It has already affected thousands of vehicles shipped to Europe from China, Australia and the U.K. Tesla may make similar modifications to vehicles manufactured or shipped to the U.S., although it was unclear at this time.

This omission suggests that Tesla needed to make additional changes than what it has publicly disclosed to maintain its factories and sales from 2021 to 2022, when the world was facing an inexorable chip shortage. laptop computers. This means Tesla cannot turn its cars all into driverless vehicles by updating their software. It is also contrary to what Elon Musk, CEO of Tesla, stated recently on an earnings call.

“My guess is that Full Auto-Driving will happen this year. This would be at a much higher safety level than for a human being. It is possible that the greatest increase in asset worth of any asset class could come from the fleet becoming autonomous via software updates. It will be interesting to see.

Tesla workers stated that “level 3” functionality would require the dual electronic controller system. This would enable a driver of a Tesla to drive hands-free in normal driving situations. A retrofit would be required at a service visit. The employees also stated that safety would not be an issue as the part being removed was considered a secondary electronic controller unit. This is primarily a backup.

Elon Musk, the CEO of Elon Musk at the time that this Shanghai manufacturing shift was taking place wrote in a tweet: “Oh man, this year has been such a supply chain nightmare & it’s not over!”

While Tesla has always struggled to overcome manufacturing issues throughout its history. However, Tesla’s completion of the Shanghai factory in 2019, helped increase production, grow margins, and win market share far beyond North America. As the company presses into mainstream status, this latest decision highlights new challenges and allows it to fulfill Elon Musk’s promise of a self driving future.

The missing part

One item that was not included is the electronic control unit for the electric power-assisted steering systems. It converts wheel movement into street turns.

Before the advent of electronic components in cars, they relied on an electric pump and steering rack to turn steering wheels into turns.

Richard Wallace is the principal advisor at HWA Analytics Ann Arbor, and a veteran transport safety researcher. He explains why that has changed.

There is still an electronic component. Today’s cars, however, are equipped with an electronic system that allows you to turn the wheel and tell your vehicle which direction it should go.

Wallace points out that electric power assisted steering systems are now able to provide driver assistance features such as the ability for a vehicle to stay in its lane by keeping it within the lane.

Tesla removed the part because engineers considered it redundant. The component was originally installed to provide backup. Tesla will save money in the short-term by removing the control unit, provided that there are no issues with the system.

The company can remove options and components for business purposes, as there is precedent. To reduce costs, Tesla, for example, removed lumbar support in passenger seats of Model 3 and Model Y cars last spring.

Musk stated that Tesla faced a “chip hell” of chips in 2021 during earnings calls on January 26th, 2021. Musk noted that it was difficult for the company to obtain “the little chip which allows you back and forth.”

The altered power steering system was not mentioned by him.

Similar steps have been taken by other automakers, though they tend to make short-term cuts to certain options that don’t form part of the vehicle’s core functionality.

As an example, March 2021 will see General Motors saidIt was building pickup trucks for its light-duty 2021 trucks without installing a fuel management module. This move hurt the trucks’ fuel economy. It blamed the shortage of chips for this move.

Tesla’s future self-driving technology

Tesla offers several levels in driver assistance technology for its vehicles. Autopilot is the basic edition that comes with all cars. Full Self-Driving or FSD is available to drivers for $12,000 (in the U.S.) or $199 per month.

Two employees said that there had been an internal debate about notifying customers when Tesla decided to remove an electronic control unit (ECU) from its steering racks. Two employees spoke on CNBC about the internal discussion surrounding whether to notify customers.

They also discussed the possibility of customers losing functionality or reliability due to the absence of the component. The employees feared that the “depop,” which is the exclusion of this part, might interfere with customer’s ability to use FSD.

They decided that the tweak was not sufficient to raise the level of customer notifications — at least, until Tesla launches “level 3,” which is hands-free driver assist features.

Tesla can continue to use its current version 2 of the driver assistance system, Autopilot and Full Self-Driving (or FSD), with or without the dual-control steering.

CNBC employees said that if Tesla releases a new FSD upgrade, Tesla owners who have affected vehicles will be required to retrofit their steering wheels from a Tesla Service Center.

Tesla employs service technicians who can replace, repair, or insulate damaged parts.

The majority of cars equipped with a single electronic control unit went to Chinese customers initially. FSD has not seen much uptake in China. CNBC obtained internal communications showing that just over 1% (or 121 customers) in China ordered the premium driver service package while they were ordering a Tesla car.

CNBC employees reported that the vehicles affected were being exported to Europe from tens of thousands more recently.

The safety question

CNBC asked Richard Wallace, HWA Analytics’ Richard Wallace, if removing the electronic control unit (or power steering) from modern vehicles could present a risk to safety.

You may be able turn off or remove a device like an ECU or chip that does not provide additional functionality. There is a bit of flexibility with software and chips. “I can reassign stuff there and there,” said he.

Phil Amsrud, Senior Principal Analyst at IHS Markit, stated that much depends on the vehicle’s computer architecture.

According to him, “I can’t think of any case in which an automaker would respond with, ‘You know? We’ll take a component out of that module, even though it was there for a good reason and we’ll hope nothing happens.’ A single chip version in a vehicle instead of a dual-chip chip can simplify a system and improve its performance in certain cases. They would need to validate a lot.

He estimated that most automakers spend at least 1,000 hours testing to make major changes. This can sometimes take up to four months. After making changes, it can take several years before quality and safety problems are resolved.

CNBC spoke to employees at Tesla who said that they spent only a few weeks talking about the changes before making the decision and did not consider it a major deal. They viewed the move more as a survival strategy for chip-famine.

The company previously made models with a single electronic control unit for their power steering system. This gave them more confidence. Tesla also boasted the ability to update software “over-the air” and improve functionality of its vehicles, as well.