Biden Admin Prepared To Get Assist From Tesla On Auto Chip Scarcity −


President Biden is able to “say Tesla” on the situation that Tesla helps to resolve the semiconductor provide chain disaster. Extra particularly, President Biden needs to know the way Tesla did so nicely whereas the so-called EV leaders in addition to different automakers and producers have been struggling. This appears like a kind of faux “I’ll solely be your good friend for those who give me sweet” issues that children used to say to me once I was in elementary college.

The Biden administration is able to seek the advice of with each Tesla and Elon Musk for assist with resolving the semiconductor scarcity. Secretary of Commerce Gina Raimondo stated on CNBC that she was able to seek the advice of with Elon Musk on tips on how to enhance the semiconductor provide chain scarcity that’s having such a detrimental impact on the auto business (hat tip Tesmanian and Bloomberg). Regardless of that, the President of the USA’s tongue nonetheless appears to be held hostage by the United Auto Employees (UAW), because the authorities nonetheless hasn’t publicly acknowledged Tesla’s management in EV markets.

Within the interview with CNBC, Raimondo shared ideas concerning the Biden administration and Tesla together with its purpose for not acknowledging Tesla’s management. “None of that is private. These points are approach too vital for anybody to have, you recognize, emotions damage. Like — let’s simply do the work. And as I stated, anybody who has good concepts or is prepared to assist us, completely we wish the assistance.”

She added that Tesla handled the chip scarcity higher than the normal Detroit automakers which can be nonetheless “studying rapidly.” She identified that Tesla can be a tech firm after which tried to downplay President Biden snubbing Tesla, claiming that she was unaware of any administration coverage that wouldn’t enable her to hunt recommendation from Tesla.

Tesla Already Has Shared How It Is Surviving The Chip Scarcity

The concept the chip scarcity isn’t affecting Tesla in any respect shouldn’t be correct. Through the newest Tesla earnings name (and beforehand), Elon Musk shared how Tesla was in a position to get via the worst. In Tesla’s Q1 2021 earnings name, Elon Musk stated:

“So Q1 was — had among the most troublesome provide chain challenges that we’ve ever skilled within the lifetime of Tesla and a few difficulties with provide chain, with elements — over the entire vary of elements. Clearly, individuals have heard concerning the chip scarcity. This can be a large drawback. However then along with that, for instance, we had fairly a problem scaling, driving our manufacturing in China, as a result of we’re unable to get essential engineers there due to COVID quarantine restrictions. So — which meant that Tesla worldwide was depending on drive models made at our manufacturing facility in Nevada, Giga Nevada. In order that was a really difficult state of affairs.

“The workforce has actually performed an unbelievable job of coping with actually extreme provide chain shortages.”

He additional added:

“As we proceed to work via the instability of the worldwide provide chain, significantly round semiconductors and port capacities, whereas the Tesla workforce in partnership with our suppliers did large work holding our factories working, we did expertise excessive expedite prices within the quarter, and so they have been additionally greater than they have been in [Q3], with some minor interruptions to manufacturing over the course of the quarter. We consider that this panorama is bettering, but it surely does stay troublesome, and it’s an evolving state of affairs.”

Though that final paragraph was extra concerning the monetary objectives and points, he identified that Tesla was in a position to work via the instability of the problem whereas partnering with suppliers. Regardless of these challenges, Tesla did exceptionally nicely for the primary quarter — and we all know now it wasn’t simply the primary quarter. Final 12 months was an exceptional 12 months for Tesla.

In Tesla’s shareholder letter for the Q1 2021 earnings name, Tesla wrote:

“In Q1, we have been in a position to navigate via world chip provide scarcity points partially by pivoting extraordinarily rapidly to new microcontrollers, whereas concurrently growing firmware for brand new chips made by new suppliers.”

Final month, Automotive Information printed an article titled, “How Tesla weathered world provide chain points that knocked rivals.”

The article addressed how Tesla was in a position to survive the scarcity whereas different automakers struggled. These included:

  • Permitting clients to take supply of automobiles with lacking elements reminiscent of Bluetooth chips and USB ports.
  • Eradicating radar and lumbar help from the entrance passenger seats.
  • Rising car costs to handle the upper prices.
    • These included “expedite prices” for elements.
  • Substituting various chips for some that have been briefly provide.

The article additionally famous that Tesla designs extra {hardware} and writes extra software program than different automakers, and reminded readers of Elon Musk’s description of Tesla as “absurdly vertically built-in in comparison with different auto corporations.”

A Tesla insider advised Automotive Information, “We design circuit boards by ourselves, which permit us to change their design rapidly to accommodate various chips like powerchips.”

How The Response Ought to Be

Regardless of Tesla’s management, the Biden administration nonetheless refuses to confess that it’s incorrect about GM doing the arduous work Tesla’s staff even have performed. This may increasingly sound little or petty, but it surely’s all about honesty and integrity.

If I can’t belief the President’s phrase when he says GM is main the EV markets, I can’t belief him on the rest. Critically, y’all, these are automobiles we’re speaking about. Not warfare, intelligence, weapons, or elections. If the President of the US is telling lies about automobiles, then he’ll lie about every part else.

That stated, right here’s what I feel Tesla and Elon Musk ought to do. I feel Tesla ought to solely assist formally when President Biden apologizes for not being truthful about Tesla’s function within the EV markets. As for Elon, nicely, he’s already shared how Tesla survived. Maybe a easy reminder in a considerate tweet or remark may assist ease among the tensions — tensions that President Biden began by permitting UAW to take management of the state of affairs.

Neither Elon Musk nor Tesla owe this administration something, however serving to would present a way of patriotic responsibility. Though each Elon and Tesla have proven how a lot they really take care of America, many refuse to see that and I feel Elon has an opportunity to place a highlight on his love for America by navigating this case with grace and kindness.



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