In an internal email, Tesla CEO Elon Musk told employees to ‘go hardcore’ in order to meet the car company’s Q3 delivery quota amidst supply shortages. Supply shortages have been a thorn in Tesla’s side since the start of the pandemic. Surges of Covid cases in South East Asia where auto parts and computer chips are often manufactured have seen factories close, driving up car prices worldwide. This has directly impacted Tesla’s car output as the eagerly anticipated Cybertruck has seen a push from Q4 until some time in 2022 along with the new Roadster facing similar delays.
Other electric vehicle delays because of parts shortages include Rivian delaying their fully electric pick-up truck, the R1T, from July 2021 until September. General Motors’ Hummer EV was pushed back to 2022 due to supply shortages. As a result of the shortage of parts, car prices have risen dramatically, but with the world’s largest microchip manufacturer raising production costs, there is fear that Tesla will further raise the prices of their automobiles.
No Chips On The Table
The microchip shortage has hurt Tesla’s manufacturing output as noted by Elon Musk himself. Also in the email, the eccentric CEO notes that Tesla built “a lot of cars have with missing parts that needed to be added later“. This refers to the construction of the vehicle and then waiting for the necessary parts, not the shipping of cars without vital components which would prove to be a massive safety risk. Musk stated in July that the current global chip shortage remains quite serious and that future output this year by Tesla would be determined by this crisis. With Tesla vehicles on the cutting edge of new tech, it is no surprise that the global chip shortage has crippled the EV manufacturer’s production timeline.
Musk typically sends emails to employees at the end of each quarter urging a boost in productivity. However, this email could be a scary read for investors who will want Tesla to be able to maintain a strong production line and meet quota expectations. Though those same investors should be put at ease with Tesla branching out to other ventures such as robotics and energy distribution. With global microchip prices rising there is a fear that Tesla in the future will see higher spikes in prices for their whole range of car models.
