Why Tesla Soared as Other Automakers Struggled to Make Cars

Justin Bailey · Jan 8, 2022

https://www.nytimes.com/2022/01/08/...upply-chain.html?referringSource=articleShare

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.

Interesting article that sheds a little more light on the "chip shortage" we're hearing so much about with cars right now. It seems that there's more of a software development expertise shortage with big automakers than a chip shortage.

Peru · Jan 8, 2022

It's true

Over here (Norway), most cars sold are electric. And analysts predict Tesla to be the clear winner of 2022 in sales simply because it's available. The waiting lists and times for other popular cars are daunting. Even if those models are more in-demand than Tesla's.

brawndolicious · Jan 8, 2022

Peru said:
It's true

Over here (Norway), most cars sold are electric. And analysts predict Tesla to be the clear winner of 2022 in sales simply because it's available. The waiting lists and times for other popular cars are daunting. Even if those models are more in-demand than Tesla's.

Isn't that partly because Norway has big tax incentives for buying electric cars? Tesla positioned themselves well to actually deliver a large volume of EVs though so it might be a few years before other automakers can make a serious grab at the EV market share.

entremet · Jan 8, 2022

Vertical integration. Same with Apple.

Deleted member 2752 · Jan 8, 2022

I bet we'll see a lot of car (and other tech) recalls in the near future, because all of these suppliers had the same problem and their entire existence is tied to these large contracts. There's no way they didn't also make do with what was available and quickly redesigned if possible to keep the production running.

Neo C. · Jan 8, 2022

Joe Justice has explained Tesla's cellular product line and how its ramp up actually works. It's something other car makers simply can't replicate right now.

Peru · Jan 8, 2022

brawndolicious said:
Isn't that partly because Norway has big tax incentives for buying electric cars? Tesla positioned themselves well to actually deliver a large volume of EVs though so it might be a few years before other automakers can make a serious grab at the EV market share.

We've had big incentives, although they're scaling them back because now electric cars are just the 'default' and cities still don't want a lot of cars in centres, regardless of fuel.

Top 10 2021:
Tesla Model 3- Toyota RAV- 4Volkswagen ID.4- Tesla Model Y- Volvo XC40- Ford Mustang Mach-e- Audi E-Tron- Skoda Enya-q Nissan Leaf- Polestar 2

But the Audi E-tron was the biggest new car in Norway in 2020, so other brands have already been positioned for biggest market share for a while - when they're able to deliver.

Deleted member 2752 · Jan 8, 2022

Neo C. said:
Joe Justice has explained Tesla's cellular product line and how its ramp up actually works.

Would you have a link to that?

Neo C. · Jan 8, 2022

mnz:

I put the timemark at 37 min, when he explained that.

captive · Jan 8, 2022

Is soared really the right word? Tesla sells a fraction of cars compared to the traditional car manufacturers.

I say this as an owner and stock owner.

NunezL · Jan 8, 2022

captive said:
Is soared really the right word? Tesla sells a fraction of cars compared to the traditional car manufacturers.

I say this as an owner and stock owner.

A 50% increase in sales year over year is pretty high.

Deleted member 8901 · Jan 8, 2022

Maybe the situation is different in the US but Tesla wait lists are just as long if not longer than any other car here in Canada.

entremet · Jan 8, 2022

captive said:
Is soared really the right word? Tesla sells a fraction of cars compared to the traditional car manufacturers.

I say this as an owner and stock owner.

The story is not about market share but their deliveries and meeting their demand. They did soar compare to the others in comparison.

NunezL · Jan 8, 2022

Mint said:
Maybe the situation is different in the US but Tesla wait lists are just as long if not longer than any other car here in Canada.

The article is more about Tesla managing to sell more cars than expected while others automakers weren't able to than about them being readily available.

Charcoal · Jan 8, 2022

Imagine trying to recruit SWE's and telling them they have to live in Detroit.

Justin Bailey · Jan 8, 2022

Charcoal said:
Imagine trying to recruit SWE's and telling them they have to live in Detroit.

Detroit is actually pretty cool.

ascii42 · Jan 8, 2022

Charcoal said:
Imagine trying to recruit SWE's and telling them they have to live in Detroit.

I know GM's got a large IT center in Atlanta. One of my former coworkers went to work there.

TarpitCarnivore · Jan 8, 2022

Charcoal said:
Imagine trying to recruit SWE's and telling them they have to live in Detroit.

> we can pay you 100K+ and it's a cheaper COL, and we have a vibrant food scene and culutre

Your comment is straight of Blind/Hacker News swe elitism that the valley is some holy land

groganos · Jan 8, 2022

TarpitCarnivore said:
> we can pay you 100K+ and it's a cheaper COL, and we have a vibrant food scene and culutre

Your comment is straight of Blind/Hacker News swe elitism that the valley is some holy land

And to piggyback on your comment ... Stellantis (Chrysler) is based in auburn hills and Ford is headquartered in Dearborn which are totally both not Detroit. Me personally I'd rather buy a rad place in Bloomfield hills instead of going to Valley and have to fight and struggle to purchase an 1800 Sq foot house over a million if you're lucky enough to find a place that hasn't been either offered at more than market value or has received an all cash offer. The valley is alright if you're a big player or a higher up but if you're a bog standard software engineer, there's no real reason to go to the valley and struggle when there's a ton of opportunities at big corporations not based in the valley that'll probably provide you more opportunities for growth, higher salaries, and corporate mobility.

Deleted member 69501 · Jan 8, 2022

Charcoal said:
Imagine trying to recruit SWE's and telling them they have to live in Detroit.

Gm has a huge presence in ON

TooBusyLookinGud · Jan 8, 2022

Charcoal said:
Imagine trying to recruit SWE's and telling them they have to live in Detroit.

Having access to quality SWE's is one reason they succeeded so quickly. My undergrad is SWE and I moved to CA because I knew I'd be at the forefront of technology. The pipeline here is insane, even though there is a shortage.

Honestly, I wouldn't have moved to Detroit over CA because of how many reputable tech companies here. I would certainly give it a look now, but it would have to be a really good offer.

DieH@rd · Jan 8, 2022

Tesla has an amazing operating structure, they can quickly adapt to almost anything.

Stay Up Be Easy · Jan 8, 2022

It seems like a lot of chickens are coming home to roost.

Outsourcing
Offshoring
Lean Manufacturing

Covid just seemed to speed things up. I don't think things will particularly change either.

I work in civil infrastructure and government and the shit these consultants pull at many times the cost of staff we used to have is insane.

groganos said:
And to piggyback on your comment ... Stellantis (Chrysler) is based in auburn hills and Ford is headquartered in Dearborn which are totally both not Detroit. .

Ford is currently renovating an empty train station in corktown train station.

I think it's eventually going to house the electric car division.

And it's already pricing out some long term residents even faster than was already happening.

Though I could imagine GM bolting in the next ten years.

God it would be nice if we had an industry other than autos.

bionic77 · Jan 8, 2022

Teslas are basically luxury cars though at this point as are most EVs.

I am sure that will change shortly. Even via the used market.

RoboPlato · Jan 8, 2022

Didn't Tesla have to recall a quarter of the cars they've sold in their lifetime? I wouldn't exactly say that they're doing great at manufacturing

Chasex · Jan 8, 2022

Anecdotally the amount of Tesla's on the road here in Austin seems to have exploded during these pandemic years. I can get a brand new one ordered in for next month whereas other brands it's a total crap shoot. We may look back at this supply chain issue as one of the key factors that allowed Tesla to reach critical mass.

And yeah, you could not convince me to go anywhere in Michigan to work for a US domestic automaker, im sorry. Sunbelt please. This really is a massive competitive disadvantage.

Astronut325 · Jan 8, 2022

The big automakers can't do this. They refuse to adapt.

bionic77 · Jan 8, 2022

RoboPlato said:
Didn't Tesla have to recall a quarter of the cars they've sold in their lifetime? I wouldn't exactly say that they're doing great at manufacturing

Their build quality is iffy but there are a lot of cool features in Teslas.

Kendrid · Jan 8, 2022

RoboPlato said:
Didn't Tesla have to recall a quarter of the cars they've sold in their lifetime? I wouldn't exactly say that they're doing great at manufacturing

over a wire for the backup camera that could break. Not exactly a big deal.

thanks for the thread and replies, I am interested in how they are pumping out cars.

Chasex · Jan 8, 2022

RoboPlato said:
Didn't Tesla have to recall a quarter of the cars they've sold in their lifetime? I wouldn't exactly say that they're doing great at manufacturing

This is still a fair point but becoming less so. There is a clear trend of quality increasing over time and no reason to think that will stop. The latest recall is not a big deal at all, and should be noted that recalls are not exactly uncommon, even for the legacy ice manufacturers.

RoboPlato · Jan 8, 2022

Chasex said:
This is still a fair point but becoming less so. There is a clear trend of quality increasing over time and no reason to think that will stop. The latest recall is not a big deal at all, and should be noted that recalls are not exactly uncommon, even for the legacy ice manufacturers.

Kendrid said:
over a wire for the backup camera that could break. Not exactly a big deal.

thanks for the thread and replies, I am interested in how they are pumping out cars.

Appreciate the clarifications

Imaginary_Number · Jan 8, 2022

It's cool that Tesla is able to get around this, but it doesn't surprise me that other manufacturers are having issues. It's a big process to swap out a chip: your PCB may change, your existing code and drivers may not port 100%, there would need to be software validation on that, functional safety analysis needs to be done to meet safety levels, then the component would need to go through another round of design validation and production validation, and then you actually need a good supply of these new chips. I've heard that automotive certified chips aren't exactly a high priority for chip manufacturers. All that time adds up, and I can see some manufacturers wanting to wait it out instead of committing to the change process.

CatAssTrophy · Jan 8, 2022

RoboPlato said:
Didn't Tesla have to recall a quarter of the cars they've sold in their lifetime? I wouldn't exactly say that they're doing great at manufacturing

AFAIK it's also risky to "just reuse and rewrite software for" different chips that live at the center of your entire automobile. Sounds like loose QA and potential for disasterous bugs and glitches.

I'm more inclined to believe Tesla's being fast and loose and reckless in order to pump out vehicles than them being smart and doing things safely in any way.

Replicant · Jan 8, 2022

Teslas are junk. Don't buy one. So many quality control issues

bionic77 · Jan 8, 2022

CatAssTrophy said:
AFAIK it's also risky to "just reuse and rewrite software for" different chips that live at the center of your entire automobile. Sounds like loose QA and potential for disasterous bugs and glitches.

I'm more inclined to believe Tesla's being fast and loose and reckless in order to pump out vehicles than them being smart and doing things safely in any way.

Generally Tesla is obsessed with safety.

I would never just assume some corporation is doing the right thing but they have tried to make their cars safe.

Chasex · Jan 8, 2022

Replicant said:
Teslas are junk. Don't buy one. So many quality control issues

Tesla has the highest customer satisfaction of any automaker for 4 consecutive years now. This is not to excuse quality control issues, but the data clearly shows that this negative does not outweigh the positives. For some people it matters more than others and each person should factor that individually, but to say they are junk is just silly.

Kendrid · Jan 8, 2022

RoboPlato said:
Appreciate the clarifications

NP, I saw one article about the recall that showed a Tesla on fire on the side of the road. Sad reporting for such a non-issue.

turbobrick · Jan 8, 2022

TarpitCarnivore said:
> we can pay you 100K+ and it's a cheaper COL, and we have a vibrant food scene and culutre

Your comment is straight of Blind/Hacker News swe elitism that the valley is some holy land

I dunno. Personally I'd need to be paid a lot more than that to live there, or anywhere in that region of the country. If by the valley you mean silicon valley, I wouldn't live in California either.

bionic77 said:
Generally Tesla is obsessed with safety.

I would never just assume some corporation is doing the right thing but they have tried to make their cars safe.

Maybe. But the build quality issues over the years indicate they're ok with cutting corners.

captive · Jan 8, 2022

RoboPlato said:
Didn't Tesla have to recall a quarter of the cars they've sold in their lifetime? I wouldn't exactly say that they're doing great at manufacturing

Imagine thinking recalls matter in the way that your saying.

Hint: all manufacturers have recalls for something.

My minivan had two, last year alone.

TarpitCarnivore · Jan 8, 2022

Astronut325 said:
The big automakers can't do this. They refuse to adapt.

The story literally says they are trying to adapt by hiring swe for better vertical integration

> 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.

CatAssTrophy · Jan 8, 2022

bionic77 said:
Generally Tesla is obsessed with safety.

I would never just assume some corporation is doing the right thing but they have tried to make their cars safe.

I agree with you there, I guess I am just waiting on more stats (that don't come from Tesla itself or Elon enthusiasts) to reinforce that they're doing things "right" before I let down my skepticism shield.

I definitely think though, that regardless of Tesla's track record, politics, controversy, etc. that traditional car manufacturers are incredibly stuck in the past in a lot of aspects and that it makes sense a brand new car company built from the ground up with electric-only vehicles and electronics etc. integrated into them will be more agile to certain kinds of hardships or speedbumps, if you'll pardon the quasi-pun.

Replicant · Jan 8, 2022

Chasex said:
Tesla has the highest customer satisfaction of any automaker for 4 consecutive years now. This is not to excuse quality control issues, but the data clearly shows that this negative does not outweigh the positives. For some people it matters more than others and each person should factor that individually, but to say they are junk is just silly.

I'm weary of the customer base. I would probably say they are like apple people who refuse to acknowledge issues

groganos · Jan 8, 2022

Stay Up Be Easy said:
It seems like a lot of chickens are coming home to roost.

Outsourcing
Offshoring
Lean Manufacturing

Covid just seemed to speed things up. I don't think things will particularly change either.

I work in civil infrastructure and government and the shit these consultants pull at many times the cost of staff we used to have is insane.

Ford is currently renovating an empty train station in corktown train station.

I think it's eventually going to house the electric car division.

And it's already pricing out some long term residents even faster than was already happening.

Though I could imagine GM bolting in the next ten years.

God it would be nice if we had an industry other than autos.

Hahaha yeah I think they're rebuilding/renovating the Rouge factory for the ev's (which im pretty sure is in corktown) I wish it would be functioning goddamn sooner so they could kick my mach-e out the door. It sucks that you're getting squeezed by consultants who throw piles of money at a problem hoping that it fixes it while you're probably getting your budgets slashed and being told to "make due."

m_shortpants · Jan 8, 2022

Teslas are rolling off the line with Ryzen CPUs right now. That is insane in itself and why traditional automakers are so far behind.

turbobrick · Jan 8, 2022

captive said:
Imagine thinking recalls matter in the way that your saying.

Hint: all manufacturers have recalls for something.

My minivan had two, last year alone.

true. It matters what the recall is. The Tesla recall seemed like a minor thing. Its not like engines were exploding or cars were catching on fire like recalls from another brand

m_shortpants said:
Teslas are rolling off the line with Ryzen CPUs right now. That is insane in itself and why traditional automakers are so far behind.

Why is not using a modern desktop cpu mean a manufacturer is far behind? Why would a company use a more advanced chip than what is needed? If you have something as simple as an abs module, it doesn't need a lot of computing power. There's also the fact that chips that go into cars are designed to last decades, which is why manufacturers aren't using just whatever chips they can get ahold of.

captive · Jan 8, 2022

Replicant said:
I'm weary of the customer base. I would probably say they are like apple people who refuse to acknowledge issues

So basically everyone is wrong except you, until someone who's not a Tesla owner can prove you wrong?

Astronut325 · Jan 8, 2022

TarpitCarnivore said:
The story literally says they are trying to adapt by hiring swe for better vertical integration

> 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.

I'm not confident they'll be able to make any meaningful changes this year or next.

Pwnz · Jan 8, 2022

turbobrick said:
true. It matters what the recall is. The Tesla recall seemed like a minor thing. Its not like engines were exploding or cars were catching on fire like recalls from another brand

Why is not using a modern desktop cpu mean a manufacturer is far behind? Why would a company use a more advanced chip than what is needed? If you have something as simple as an abs module, it doesn't need a lot of computing power. There's also the fact that chips that go into cars are designed to last decades, which is why manufacturers aren't using just whatever chips they can get ahold of.

Yeah while it is agile to switch to Ryzen CPUs, in server clusters generally 8 years old is the absolute max companies will keep rigs online. At that point it's a dead man walking and more trouble than it's worth. I wouldn't want my car to use those sorts of parts, and server farms have ideal thermals for that type of CPU.

Chasex · Jan 8, 2022

Replicant said:
I'm weary of the customer base. I would probably say they are like apple people who refuse to acknowledge issues

I'm sure there's an element of this, as there would be with all manufacturers and brand bias. I bet Teslas brand bias is stronger too. But by what percent would that skew the data? Enough to go from number 1 in customer satisfaction to something which would be considered "junk"? Doubtful. Aside from this there are objective measures like efficiency and safety that prove they aren't junk.

I just wish people would be more careful with their words in the internet age.

Neo C. · Jan 8, 2022

CatAssTrophy said:
AFAIK it's also risky to "just reuse and rewrite software for" different chips that live at the center of your entire automobile. Sounds like loose QA and potential for disasterous bugs and glitches.

I'm more inclined to believe Tesla's being fast and loose and reckless in order to pump out vehicles than them being smart and doing things safely in any way.

Just to make sure I'm not being called a Tesla-fanboy, I'm a Toyota-guy and will probably buy a Toyota EV if they can actually catch up.

Having said that, their safety checks are beyond other manufacturers, because they check every single car (Joe Justice call it the software-mentality):

Why Tesla Soared as Other Automakers Struggled to Make Cars

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