Why Tesla Soared as Other Automakers Struggled to Make Cars

When Tesla couldn’t get the chips it had counted on, it took the ones that were available and rewrote the software that operated them to suit its needs. Larger auto companies couldn’t do that because they relied on outside suppliers for much of their software and computing expertise. In many cases, automakers also relied on these suppliers to deal with chip manufacturers. When the crisis hit, the automakers lacked bargaining clout.

Just a few years ago, analysts saw Mr. Musk’s insistence on having Tesla do more things on its own as one of the main reasons the company was struggling to increase production. Now, his strategy appears to have been vindicated.

Cars are becoming increasingly digital, defined by their software as much as their engines and transmissions. It’s a reality that some old-line car companies increasingly acknowledge. Many, including Ford and Mercedes-Benz, have said in recent months that they are hiring engineers and programmers to design their own chips and write their own software.

“Tesla, born in Silicon Valley, never outsourced their software — they write their own code,” said Morris Cohen, a professor emeritus at the Wharton School of the University of Pennsylvania who specializes in manufacturing and logistics. “They rewrote the software so they could replace chips in short supply with chips not in short supply. The other carmakers were not able to do that.”

“Tesla controlled its destiny,” Professor Cohen added.

Tesla sold 936,000 cars globally in 2021, an 87 percent increase for the year. Ford, G.M. and Stellantis, the company formed from the merger of Fiat Chrysler and Peugeot, all sold fewer cars in 2021 than they did in 2020.

Article source: https://www.nytimes.com/2022/01/08/business/teslas-computer-chips-supply-chain.html