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Elon Musk: Tesla’s biggest challenge is supply chain, but it’s not a long-term issue

[Credit: HBO]

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Tesla CEO Elon Musk said that his company’s biggest issue in the short term is supply chain, especially when it comes to microcontroller chips.

“Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it,” Musk said in a Tweet during the early morning hours on Wednesday. “Fear of running out is causing every company to overorder.”

For months, the automotive industry has been confronted with a shortage of semiconductors and microcontroller chips. These chips help control the “brain” of a vehicle and can operate everything from fuel injection systems in combustion engine cars to infotainment systems in electric cars. This year, there has been a major shortage due to overbuying by large automotive manufacturers, a situation that has been caused by tensions between the United States and China. China is a global powerhouse in semiconductor chip production, and companies have panic bought large quantities of these chips to compensate for the possibility of running out.

Several automakers have shut down production lines in various regions globally due to not having enough semiconductors or microcontrollers to handle regular production rates.

Musk compared the issue to the toilet paper shortage that occurred last year during the COVID-19 pandemic. Consumers panic bought toilet tissue due to the fear of being quarantined for an extended period of time. This ultimately caused a massive shortage, and large retailers were forced to limit the quantity that could be purchased per family to remain stocked.

Despite the short-term problems that this has caused Tesla and many other large car companies in the world, Musk believes that it won’t affect his car company down the road. “It’s obv[iously] not a long-term issue,” the CEO added.

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Tesla was able to avoid some of the semiconductor shortages by pivoting away from the tech altogether. In the company’s Q1 2021 Update Letter, Tesla outlined how it navigated through supply chain shortages by utilizing microcontrollers instead.

The company wrote:

” In Q1, we were able to navigate through global chip supply shortage issues in part by pivoting extremely quickly to new microcontrollers, while simultaneously developing firmware for new chips made by new suppliers.”

Tesla has been able to distance itself from production halts at its factories, apart from a rumored two-week hiatus in Model Y production lines at Giga Shanghai in China. Instead, Tesla has refined its products and continued to work on releasing the new Model S and Model X vehicles that the company redesigned and released in January. Deliveries on the new Model S are expected to begin on June 10th with a dedicated delivery event at Tesla’s Fremont Factory in Northern California.

What do you think? Let us know in the comments below, or be sure to email me at joey@teslarati.com or on Twitter @KlenderJoey.

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Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Elon Musk

Elon Musk says this essential Tesla Robotaxi feature will be here soon

Tesla will work to solve automatic parking at available Supercharger stalls with future updates.

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Credit: Tesla

Elon Musk reiterated that one feature, which is ultimately an essential part of the operation of the Tesla Robotaxi platform, will be here soon.

Tesla released a new video of its longest Full Self-Driving demo yesterday, showing off a zero-intervention drive from San Francisco to Los Angeles. The drive is roughly seven hours and 360 miles long, and not a single need for the driver to touch the wheel was recorded.

Tesla flexes its most impressive and longest Full Self-Driving demo yet

There was one question that was brought up by an owner that brings up an interesting point. Tesla still needs to solve the vehicle’s ability to pull into Superchargers automatically, something that does not currently have a high success rate, at least for the owner who got a response from CEO Elon Musk.

Musk assured him that a Tesla’s ability to pull into open parking spaces at Superchargers would be more reliable with future software updates. Owners can see how many and which exact stalls are available before traveling to a Supercharger, so Teslas should be able to identify these stalls and pull in automatically:

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This is a small part of what will be imperative for the charging experience when Robotaxi launches in the coming years. Tesla plans to enable customer-owned cars to potentially enter the Robotaxi fleet and become an autonomous ride-sharing vehicle by next year.

However, it still needs to figure out autonomous charging. There are two parts to that process: pulling into the spot and charging without human need to connect the Supercharger to the vehicle.

Tesla used to consider a robotic snake-arm charger for this, but it has talked about induction charging more recently. Wireless charging seems to be the route that Tesla plans to go, but it might take some time to resolve the energy loss issue and make it an efficient charging method.

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Tesla flexes Robotaxi wireless charging — autonomy from top to bottom

Tesla has said its wireless charging efficiency is “well above 90 percent.”

Nevertheless, Tesla is still working toward figuring out all of the edge cases of Robotaxi operation. Figuring out charging without the need of a human is just one part of the puzzle it still has yet to solve, but with its improvements over the past few years, there’s no doubt Tesla will find the missing piece.

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Tesla Superchargers get massive nod in new study showing reliability

It showed Tesla Superchargers had the highest score on the 1,000-point scale with 709. They also had the highest reliability, as respondents reported they only had failed charging visits at Tesla Superchargers four percent of the time.

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tesla supercharger
Credit: Tesla

Tesla Superchargers got a massive nod in a new study that showed reliability across EV charging suppliers as electric car ownership in the United States continues to grow.

J.D. Power’s 2025 U.S. Electric Vehicle Experience Public Charging Study aims to find the most (and least) reliable charging suppliers for EV owners.

While charging has become much more popular over the past few years, thanks to the increase in sales of electric vehicles, they are still not quite as plentiful as gas pumps for combustion engine cars.

Tesla is rolling out a new ‘Supercharger queue’ in an effort to end one issue

For this fact alone, it is imperative that EV charging companies offer a fast and reliable product that will enable confidence and peace of mind for car owners. There are quite a few companies out there, but Tesla has the most expansive charging network, not only in the U.S., but globally.

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It also has the most reliable chargers, a fact that was reiterated in this year’s J.D. Power study, which was released today.

It showed Tesla Superchargers had the highest score on the 1,000-point scale with 709. They also had the highest reliability, as respondents reported they only had failed charging visits at Tesla Superchargers four percent of the time. This beat out Electrify America at six percent, Red E at 10 percent, and EVgo and 12 percent.

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These companies were the only ones to report failed charging visits below the average.

Tesla’s 709 score on the 1,000-point scale was a 22-point drop from last year, but the study said that most of the complaints came from non-Tesla owners.

Many non-Tesla EVs now have access to the company’s Supercharging Network, and the complaints came from those drivers as they stated the process and payment were not as streamlined for them.

Brent Gruber, Executive Director of the EV practice at J.D. Power, said:

“Tesla has facilitated an experience for its owners by creating an optimal technical environment that makes the charging process very easy to use and complete payments. That process isn’t quite as streamlined for non-Tesla owners.”

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This likely came from the increased per-kilowatt-hour rate that non-Tesla owners are required to pay for having access to the company’s massive charging network.

For Tesla owners, reliability is not much of a concern. Apart from vandalism, it is pretty rare that a Supercharger stall is out of service, but, of course, it happens.

The important thing to note is that this study continues to show Tesla’s focus on keeping its charging network up and running, especially now that non-Tesla owners are able to utilize them.

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Investor's Corner

Deutsche Bank boosts Tesla (TSLA) stake by 20.8% to over $2.6 billion

The German banking giant now owns 10,076,461 Tesla shares.

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Credit: Tesla China

Deutsche Bank AG has significantly increased its position in Tesla (NASDAQ: TSLA), boosting its stake by 20.8% in the first quarter. 

The German banking giant now owns 10,076,461 Tesla shares, an additional 1,733,531 shares compared to the previous quarter, valued at roughly $2.61 billion. 

A top holding

As noted in a report from MarketBeat, Tesla now represents about 1% of Deutsche Bank’s overall investment portfolio, making it the firm’s 13th-largest holding. This also means that Deutsche Bank now owns 0.31% of the electric vehicle maker, at least as of its most recent SEC filing.

Tesla shares are typically volatile, and they are still being traded actively, with an average trading volume of 104.7 million. As of writing, Tesla has a market capitalization of around $1.11 trillion, making it the biggest automaker in the world by far.

Institutional investors

Deutsche Bank is not the only firm that has been increasing its stake in TSLA. Charles Schwab Investment Management raised its Tesla holdings by 4.9% in Q1, resulting in the firm now controlling over 18.17 million shares worth $4.71 billion. Evolution Wealth Advisors also increased its Tesla stake by 85.7% to over 13,000 shares.

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Overall, institutional support for Tesla remains robust, with 66.2% of the company’s stock held by hedge funds and other large investors.

TSLA stock has been seeing some momentum as of late, amidst reports that the electric vehicle maker is making progress in several of its key initiatives. Tesla’s Robotaxi business in Austin and the Bay Area is expanding well, and Elon Musk recently announced that FSD V14 should be released soon to consumers. Tesla China is also expected to launch the Model Y L, a six-seat extended wheelbase version of its best-selling car, before the end of the third quarter.

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