Assumption: Some chip lines have been stopped forever as they were barely profitable & lack of orders forced a decision to close earlier than otherwise
If Ford (or other OEMs) can't EVER get the chips they EXPECT, then Ford or its suppliers will have to rejig things at a very slow speed compared to Tesla.
My question is: have some OEMs left an open goal for competitors & particularly Tesla? Let's take an extreme example, let's say Bosch widely used 1 or more discontinued chips. Bosch would have to do a lot of work (presumably) to validate their changes for all OEMs and get back to normal production rates. Similarly, other sub-systems from other suppliers might be bottlenecks for OEMs and car designs will need to change at least a little. OEMs might really be prevented from making cars in volume (in all models) for a long time. If you want a car, you WILL most likely have to switch brand to whoever has cars (including Tesla).
OEM supply chains are fragile, Tesla (and probably some Chinese & other startups) are anti-fragile, robust & resilient. The last year or so has really accelerated change in work, culture & society in my view, we're running at double speed for a while
Suppliers by revenue (Billions)
- Robert Bosch. $49.53 (injection plus much more)
- Denso Corp. $42.79 (ex Toyota, thermal, power, electronics)
- Magna International Inc. $40.83 (transmissions, ADAS)
- Continental. -$37.80 (tyre sensors?)
- ZF Friedrichshafen. $36.93 (transmissions, electronic suspensions)
- Aisin Seiki Co. $35 (Toyota Group, transmissions, electronics)
- Hyundai Mobis. $25.62 (Hyundai Group, airbags, lots of electronics sub-systems)
- Lear Corp. $21.15 (seating, electrics, more - some must have chips in)
It's maybe useful to point out that Magna manufactures the Jaguar iPace and a number of others. Right now they make models from JLR, Toyota , BMW, and Toyota.
Among those eight Tier One suppliers all make huge volumes of components including engineering and control/management of whatever they supply. For the prime users of these approaches the supplier independently designs whatever they supply. That is very efficient when no new technologies are needed. In new technologies, not so much. Thus we have VW id. 3 and many others, including Chevrolet Bolt.
Tesla, for the initial Model S was constrained in manufacturing, design and above all, very nearly unable to get supplier cooperation. As Elon said, 'we could not get the A team and sometimes could not get anyone at all'. Mercedes came to the rescue and had their suppliers provide many major Model S parts. As I recall, two air conditioner compressors from MB supplier, one for battery BMS and one for cabin. Suspension parts, switchgear and much else was taken form the Mercedes parts catalog without alteration.
That approach served Tesla well in the beginning, because otherwise they would not have been able to launch the Model S.
Soon, part by part, Tesla discovered better ways to accomplish something. Soon, less quickly, Tesla grew enough so respectable suppliers would actually deal with Tesla. Then, Tesla began, little by little, learning to do better by themselves, even seats (almost no other OEM made their own seats). Following many improvements Tesla borrowed a proprietary Inconel from SpaceX and gave us Ludicrous.
When Model X came along Tesla ended out designing and building many things that suppliers couldn't do. The FWD were to made by a supplier, which could not do it, so Tesla did it themselves and invited ne seniors and other thing to make them work. The vertical integration crept up bit by bit.
When Model 3 arrived Tesla began wholesale reinvention of numerous things, many of which Tesla made themselves. With Model Y and reconsideration of how to approach manufacturing after the initial mess with Model 3 came the realization that there were 'too many parts'. Then came bigger presses, even bigger bigger presses, then Gigapress and coming very soon even bigger Gigapresses. Along with those developments came hundreds of complete redesign elements including the SpaceX creation of Octovalve.
I gave just a few examples to illustrate how Tesla arrived at the highest vertical integration in the auto industry essentially by borrowing from SpaceX, which had itself been forced to vertical integration because they could not buy rockets.
Now teal designs their own FSD chips builds their own Supercomputers to get to FSD, sometime...
Today, watch Sandy Munro do teardown of BEVs. From IPace, VW, GM and Ford we see supplier dominations many dozens of different chips and complete independent major components. We see suppliers dictate complete subsystems, because the OEM does not want to do it themselves. We see dozens of different and incompatible fasteners. We also see no genuine systems integration.
The lesson for us all is that Tesla is reinventing manufacturing just as SpaceX did before it. The result is spectacular when it works. However, the learning curve has mistakes, misjudgments and uncertain timelines.
As we look at Tesla failures to deliver on time and with smoothly perfected whatever the item is we ned to remember that Tesla is redefining the automobile, redefining grid services, redefining energy storage and, in spare time, inventing a solar roof. None fo that is precisely predictable.
Were this to have been a 'normal OEM' Magna-Steyr or Valmet would be doing contract manufacturing. There would be other suppliers from the
@UkNorthampton list doing most major systems. They would work. They would be reliable. They would not make anything innovative.
As we criticize Tesla faults we need regularly to remind ourselves what is actually happening.
Nothing about that makes me any less irritated that my Plaid has not been delivered, a month after promised (sort of..).
As we value TSLA shares we really need to remind ourselves that one major part is manufacturing innovation. That single thing keeps Tesla advancing versus all the OEM's who know exactly how do do this because they've done it for 'a hundred years'. Every analyst seems unable to comprehend just how consequential all this is.
And here’s the irony:
teslamotorsclub.com
(ok not really, but this was fast)
