Staff work on the Tesla Gigafactory in Shanghai, east China, Nov. 20, 2020. U.S. electrical automotive firm Tesla in 2019 constructed its first Gigafactory outdoors the USA within the new Lingang space, with a designed annual manufacturing capability of 500,000 models.
Ding Ting | Xinhua Information Company | Getty Photographs
Underneath strain to hit fourth-quarter gross sales targets whereas dealing with widespread semiconductor shortages, Tesla determined to take away one of many two digital management models which can be usually included within the steering racks of some made-in-China Mannequin 3 and Mannequin Y automobiles, in response to two workers and inside correspondence seen by CNBC.
Tesla didn’t disclose the exclusion, which has already affected tens of hundreds of automobiles being shipped to clients in China, Australia, the U.Okay., Germany and different components of Europe. It was not instantly clear whether or not Tesla would make comparable modifications to automobiles manufactured in or shipped to the U.S.
The omission signifies that Tesla needed to make modifications past what the corporate has publicly revealed to maintain its factories and gross sales going from the ultimate weeks of 2021 on, because the world confronted an ongoing chip scarcity that has affected all the pieces from automobiles to laptop computers. It additionally means Tesla cannot flip all its current automobiles into driverless automobiles with a mere software program replace, undercutting what CEO Elon Musk lately mentioned on an earnings name:
“My private guess is that we’ll obtain Full Self-Driving this yr at a security stage considerably higher than an individual. So the automobiles within the fleet basically turning into self-driving by way of software program replace, I feel, would possibly find yourself being the most important improve in asset worth of any asset class in historical past. We will see.”
Internally, Tesla workers mentioned that including “stage 3” performance, which might permit a driver to make use of their Tesla hands-free with out steering in regular driving situations, would wish the twin digital management unit system and subsequently require a retrofit at a service go to. Additionally they mentioned that the exclusion wouldn’t trigger questions of safety, because the eliminated half was deemed a secondary digital management unit, used primarily as a backup.
On the time this manufacturing change was underway in Shanghai, CEO Elon Musk wrote in a tweet: “Oh man, this yr has been such a provide chain nightmare & it isn’t over!”
Tesla has struggled with manufacturing challenges all through its historical past, however the completion of its Shanghai manufacturing facility in 2019 helped it improve manufacturing, develop margins, and achieve market share past North America. This newest choice reveals new pressures as the corporate pushes additional into the mainstream, and goals to ship on Elon Musk’s guarantees of a self-driving future.
What the omitted half does
The particular merchandise omitted is an digital management unit within the electrical energy assisted steering programs, which translate steering wheel actions into wheel activates the road.
Earlier than automobiles used so many digital parts, automobiles would depend on a pump, steering rack, and pinion to translate steering wheel actions into turns.
Richard Wallace, principal advisor for HWA Analytics in Ann Arbor and veteran transportation security researcher, explains how that is modified.
“There’s nonetheless a mechanical part after all. However in at this time’s automobiles, whenever you ‘flip the wheel’ you’re offering an digital sign telling your automotive to go left or proper.”
Electrical energy assisted steering programs at this time additionally allow driver help options, Wallace notes, like the flexibility to robotically maintain a automotive within the heart of a lane.
Tesla eliminated the part as a result of engineers deemed it redundant, primarily put in as a backup. Omitting the management unit can even save Tesla cash near-term, so long as no issues come up because of the altered system.
There’s some precedent for the corporate eradicating choices or parts for enterprise causes. For instance, final spring, Tesla eliminated lumbar help from passenger seats in Mannequin 3 and Mannequin Y automobiles to decrease prices.
On January 26, 2021, Musk mentioned throughout an earnings name that Tesla had confronted down a “chip hell of many chips” in 2021. The corporate had a tough time acquiring “the little chip that means that you can transfer your seat forwards and backwards,” he famous, together with different “fundamental chips.”
He didn’t point out the altered energy steering programs.
Different automakers have taken comparable steps, however usually make short-term cuts to choices that are not a part of a automobile’s core performance.
For instance, in March 2021, General Motors said it was constructing a few of its 2021 light-duty pickup vans and not using a gas administration module, a transfer that harm these vans’ gas economic system. It blamed the chip scarcity for the transfer.
Tesla’s self-driving future
Tesla presently affords a number of ranges of driver help performance in its automobiles. A fundamental model, dubbed Autopilot, comes with each automotive. Drivers may purchase a extra superior model, known as Full Self-Driving, or FSD, for $12,000 or $199 a month (within the U.S.).
When Tesla made the choice to exclude an digital management unit from its steering racks, there was an inside dialogue about whether or not to inform clients, two workers instructed CNBC. These folks requested to stay nameless as a result of they weren’t approved to talk on behalf of the corporate.
Staff additionally mentioned whether or not omitting the half would degrade any performance in or reliability of shoppers’ automobiles. They nervous whether or not the “depop,” or exclusion, of this part could intrude with clients’ potential to make use of FSD options.
Finally, they determined the tweak didn’t rise to the extent of buyer notification — at the least till Tesla is able to launch “stage 3,” or hands-free driver help options.
Tesla automobiles can nonetheless use the present “stage 2” variations of its driver help programs, Autopilot and Full Self-Driving (or FSD), with out the dual-control steering system.
However workers instructed CNBC if Tesla launches a extra refined FSD replace, house owners with the affected automobiles who use that premium system might want to get a steering rack retrofit from a Tesla service heart.
Usually, Tesla depends on service technicians to put in lacking components or to restore or substitute damaged components, earlier than a automotive is delivered to a buyer, making service a sort of prolonged arm of Tesla manufacturing.
A lot of the automobiles with the only digital management unit have been going to clients in China initially, the place FSD just isn’t seeing important uptake. In response to inside communications seen by CNBC, simply over 1% of all Tesla clients in China opted for the premium driver help package deal on the time they positioned an order for a brand new automotive.
Extra lately, tens of hundreds of the affected automobiles have been exported to clients past China, together with in Australia, the UK, Germany and all through Europe, workers instructed CNBC.
The protection query
CNBC requested HWA Analytics’ Richard Wallace whether or not eradicating an digital management unit from an influence steering system in a contemporary automobile might pose a security danger.
“If one thing like a chip or an ECU just isn’t offering extra performance, whether it is actually redundant, you might be able to flip it off or go away it out. With chips and software program, there’s just a little little bit of wiggle room. I can reassign stuff right here and there,” he mentioned.
A lot is dependent upon a automobile’s computing structure, mentioned IHS Markit Senior Principal Analyst Phil Amsrud.
He mentioned, “I can’t consider a case the place an automaker would say ‘ what? We’ll take a part out of that module, though it was there for a good motive and we’ll hope nothing occurs.’ Going from a twin chip to a single chip variant in a automobile could make a system less complicated and make it higher in some circumstances. However they’d actually need to do lots of validation.”
Most automakers would spend 1,000 hours on testing or extra to make any large modifications, he estimated. That may take upwards of 4 months. It could possibly additionally take years for high quality or questions of safety to grow to be clear after modifications are made.
Tesla workers instructed CNBC that the corporate spent lower than a couple of weeks discussing the change earlier than transferring forward and did not view it as an enormous deal — extra of a chip-famine survival tactic.
The corporate had beforehand produced earlier fashions that featured an influence steering system with just one digital management unit, and that gave them higher confidence. So too did Tesla’s continuously touted potential to push software program updates “over-the-air” to automobiles to refine their performance if wanted.
