News
Tesla’s vertical integration and preparation were keys to avoiding chip shortage: Reuters
Tesla seemed to be made of Teflon in 2020 and 2021, as the company seemed to avert the semiconductor chip shortage with relative ease, while longstanding and prestigious automakers scaled back production due to the lack of supplies. Tesla, a company run like no other, avoided these chip shortages by using its vertical integration and preparation, along with some other strategic moves, to solidify its company’s position as the big winner of the uncertain 2020 and 2021 global automotive market.
After reporting that it had crushed Wall Street consensus expectations regarding Q4 2021 deliveries, Tesla shares skyrocketed over 13% yesterday. The unlikely, small-but-mighty car company now based out of Austin, Texas, after a more than a decade-long relationship with Northern California, which had its ups and downs, averted crisis over the past two years, and continued its streak of manufacturing growth, by keeping itself stocked on the various chips and semiconductors that keep its vehicles moving.
Strategies like delivering some cars with missing parts, like USB ports or Bluetooth chips, or even axing lumbar support in some cars, helped make things easier to build. These strategies, along with various price raises to address higher part costs and expedited shipping measures, helped keep the balance sheet healthy. Customers may have paid more for their cars than they would have in early 2021, but it did not affect sales figures like one might expect. Tesla beat Wall Street estimates by 16% when it released delivery figures for the final quarter of 2021.
Momentum started when Tesla stated in its Q2 2021 Earnings Call that it had developed a series of 19 microcontrollers in-house that would help avoid the chip shortage. “Our team has demonstrated an unparalleled ability to react quickly and mitigate disruptions to manufacturing caused by semiconductor shortages,” the company wrote in its Shareholder Deck for Q2. “Our electrical and firmware engineering teams remain hard at work designing, developing, and validating 19 new variants of controllers in response to ongoing semiconductor shortages.”
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Tesla delivers record 241,300 cars in Q3, handily beating consensus estimates
This is just one part of Tesla’s vertical integration, which helps the company avoid the massive shipping bottlenecks that kept cars away from customers for the majority of 2021. Other companies were forced to delay production and deliveries; there just were not enough chips to go around. However, Tesla’s key advantage over other OEMs was the fact that many elements of its products are designed in-house, down to the most complex portions of a design. “We’re designing and building so much more of the car than other OEMs, who will largely go to the traditional supply base and like I call it, catalog engineering. So it is not very adventurous,” CEO Elon Musk said during the Q3 2020 Earnings Call.
Reuters spoke to a Tesla insider who is involved in the engineering of the company’s chips, which shed light on how effective the vertical integration advantage is. “We design circuit boards by ourselves, which allow us to modify their design quickly to accommodate alternative chips like powerchips,” the employee told Reuters.
The series of in-house chips, which were easily modified to accommodate other types of chips that Tesla was in need of, was not the only strategy the automaker used to avoid bottlenecks. Tesla also prepared by not halting the number of chips it had ordered from suppliers, a move that other car companies did not replicate. Instead, Tesla never reduced its production forecast because of the pandemic or supply chain shortages, which may have been its most crucial move. “They’ve just been smarter about it than other companies in terms of making sure there’s buffer stock,” a supplier executive for Tesla indicated.
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Elon Musk
Celebrating SpaceX’s Falcon Heavy Tesla Roadster launch, seven years later (Op-Ed)
Seven years later, the question is no longer “What if this works?” It’s “How far does this go?”
When Falcon Heavy lifted off in February 2018 with Elon Musk’s personal Tesla Roadster as its payload, SpaceX was at a much different place. So was Tesla. It was unclear whether Falcon Heavy was feasible at all, and Tesla was in the depths of Model 3 production hell.
At the time, Tesla’s market capitalization hovered around $55–60 billion, an amount critics argued was already grossly overvalued. SpaceX, on the other hand, was an aggressive private launch provider known for taking risks that traditional aerospace companies avoided.
The Roadster launch was bold by design. Falcon Heavy’s maiden mission carried no paying payload, no government satellite, just a car drifting past Earth with David Bowie playing in the background. To many, it looked like a stunt. For Elon Musk and the SpaceX team, it was a bold statement: there should be some things in the world that simply inspire people.
Inspire it did, and seven years later, SpaceX and Tesla’s results speak for themselves.
Today, Tesla is the world’s most valuable automaker, with a market capitalization of roughly $1.54 trillion. The Model Y has become the best-selling car in the world by volume for three consecutive years, a scenario that would have sounded insane in 2018. Tesla has also pushed autonomy to a point where its vehicles can navigate complex real-world environments using vision alone.
And then there is Optimus. What began as a literal man in a suit has evolved into a humanoid robot program that Musk now describes as potential Von Neumann machines: systems capable of building civilizations beyond Earth. Whether that vision takes decades or less, one thing is evident: Tesla is no longer just a car company. It is positioning itself at the intersection of AI, robotics, and manufacturing.
SpaceX’s trajectory has been just as dramatic.
The Falcon 9 has become the undisputed workhorse of the global launch industry, having completed more than 600 missions to date. Of those, SpaceX has successfully landed a Falcon booster more than 560 times. The Falcon 9 flies more often than all other active launch vehicles combined, routinely lifting off multiple times per week.
Falcon 9 has ferried astronauts to and from the International Space Station via Crew Dragon, restored U.S. human spaceflight capability, and even stepped in to safely return NASA astronauts Butch Wilmore and Suni Williams when circumstances demanded it.
Starlink, once a controversial idea, now dominates the satellite communications industry, providing broadband connectivity across the globe and reshaping how space-based networks are deployed. SpaceX itself, following its merger with xAI, is now valued at roughly $1.25 trillion and is widely expected to pursue what could become the largest IPO in history.
And then there is Starship, Elon Musk’s fully reusable launch system designed not just to reach orbit, but to make humans multiplanetary. In 2018, the idea was still aspirational. Today, it is under active development, flight-tested in public view, and central to NASA’s future lunar plans.
In hindsight, Falcon Heavy’s maiden flight with Elon Musk’s personal Tesla Roadster was never really about a car in space. It was a signal that SpaceX and Tesla were willing to think bigger, move faster, and accept risks others wouldn’t.
The Roadster is still out there, orbiting the Sun. Seven years later, the question is no longer “What if this works?” It’s “How far does this go?”
Energy
Tesla launches Cybertruck vehicle-to-grid program in Texas
The initiative was announced by the official Tesla Energy account on social media platform X.
Tesla has launched a vehicle-to-grid (V2G) program in Texas, allowing eligible Cybertruck owners to send energy back to the grid during high-demand events and receive compensation on their utility bills.
The initiative, dubbed Powershare Grid Support, was announced by the official Tesla Energy account on social media platform X.
Texas’ Cybertruck V2G program
In its post on X, Tesla Energy confirmed that vehicle-to-grid functionality is “coming soon,” starting with select Texas markets. Under the new Powershare Grid Support program, owners of the Cybertruck equipped with Powershare home backup hardware can opt in through the Tesla app and participate in short-notice grid stress events.
During these events, the Cybertruck automatically discharges excess energy back to the grid, supporting local utilities such as CenterPoint Energy and Oncor. In return, participants receive compensation in the form of bill credits. Tesla noted that the program is currently invitation-only as part of an early adopter rollout.
The launch builds on the Cybertruck’s existing Powershare capability, which allows the vehicle to provide up to 11.5 kW of power for home backup. Tesla added that the program is expected to expand to California next, with eligibility tied to utilities such as PG&E, SCE, and SDG&E.
Powershare Grid Support
To participate in Texas, Cybertruck owners must live in areas served by CenterPoint Energy or Oncor, have Powershare equipment installed, enroll in the Tesla Electric Drive plan, and opt in through the Tesla app. Once enrolled, vehicles would be able to contribute power during high-demand events, helping stabilize the grid.
Tesla noted that events may occur with little notice, so participants are encouraged to keep their Cybertrucks plugged in when at home and to manage their discharge limits based on personal needs. Compensation varies depending on the electricity plan, similar to how Powerwall owners in some regions have earned substantial credits by participating in Virtual Power Plant (VPP) programs.
News
Samsung nears Tesla AI chip ramp with early approval at TX factory
This marks a key step towards the tech giant’s production of Tesla’s next-generation AI5 chips in the United States.
Samsung has received temporary approval to begin limited operations at its semiconductor plant in Taylor, Texas.
This marks a key step towards the tech giant’s production of Tesla’s next-generation AI5 chips in the United States.
Samsung clears early operations hurdle
As noted in a report from Korea JoongAng Daily, Samsung Electronics has secured temporary certificates of occupancy (TCOs) for a portion of its semiconductor facility in Taylor. This should allow the facility to start operations ahead of full completion later this year.
City officials confirmed that approximately 88,000 square feet of Samsung’s Fab 1 building has received temporary approval, with additional areas expected to follow. The overall timeline for permitting the remaining sections has not yet been finalized.
Samsung’s Taylor facility is expected to manufacture Tesla’s AI5 chips once mass production begins in the second half of the year. The facility is also expected to produce Tesla’s upcoming AI6 chips.
Tesla CEO Elon Musk recently stated that the design for AI5 is nearly complete, and the development of AI6 is already underway. Musk has previously outlined an aggressive roadmap targeting nine-month design cycles for successive generations of its AI chips.
Samsung’s U.S. expansion
Construction at the Taylor site remains on schedule. Reports indicate Samsung plans to begin testing extreme ultraviolet (EUV) lithography equipment next month, a critical step for producing advanced 2-nanometer semiconductors.
Samsung is expected to complete 6 million square feet of floor space at the site by the end of this year, with an additional 1 million square feet planned by 2028. The full campus spans more than 1,200 acres.
Beyond Tesla, Samsung Foundry is also pursuing additional U.S. customers as demand for AI and high-performance computing chips accelerates. Company executives have stated that Samsung is looking to achieve more than 130% growth in 2-nanometer chip orders this year.
One of Samsung’s biggest rivals, TSMC, is also looking to expand its footprint in the United States, with reports suggesting that the company is considering expanding its Arizona facility to as many as 11 total plants. TSMC is also expected to produce Tesla’s AI5 chips.
Celebrating SpaceX’s Falcon Heavy Tesla Roadster launch, seven years later (Op-Ed)
SpaceX’s xAI merger keeps legal liability and debt at arm’s length: report
