Tesla cut a steering component from some cars to deal with chip shortage, sources say
- Tesla excluded one of two electronic control units in the steering racks of Shanghai-built Model 3 and Model Y cars to deal with chip shortages, CNBC has learned.
- Sources say that tens of thousands of cars with the tweaked power steering system are already shipping to customers in China, Australia, and Europe.
- Tesla employees debated whether to tell customers about the change, but decided it wasn't necessary since the part is considered a redundant backup, not needed for level 2 driver-assistance features.
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Employees work at the Tesla Gigafactory in Shanghai, east China, Nov. 20, 2020. U.S. electric car company Tesla in 2019 built its first Gigafactory outside the United States in the new Lingang area, with a designed annual production capacity of 500,000 units.
Ding Ting | Xinhua News Agency | Getty Images
Under pressure to hit fourth-quarter sales goals while coping with widespread semiconductor shortages, Tesla decided to remove one of the two electronic control units that are normally included in the steering racks of some made-in-China Model 3 and Model Y cars, according to two employees and internal correspondence seen by CNBC.
Tesla did not disclose the exclusion, which has already affected tens of thousands of vehicles being shipped to customers in China, Australia, the U.K., Germany and other parts of Europe. It was not immediately clear whether Tesla would make similar changes to cars manufactured in or shipped to the U.S.
The omission indicates that Tesla had to make changes beyond what the company has publicly revealed to keep its factories and sales going from the final weeks of 2021 on, as the world faced an ongoing chip shortage that has affected everything from cars to laptop computers. It also means Tesla can't turn all its existing cars into driverless vehicles with a mere software update, undercutting what CEO Elon Musk recently said on an earnings call: