Tesla, like all automobile manufacturing majors, has been struggling with the crippling semiconductor chip shortage. But unlike others, Tesla did not cut production to deal with the crisis. The American electric automaker opted to remove one of two electronic control units in the steering wheels of Model 3 and Model Y cars, according to two employees and internal correspondence seen by CNBC.
While the changes were made in cars mostly meant for the Chinese market, it’s unclear whether these changes were made for cars in other markets as well. Some of these cars, however, found their way to countries like the UK, Germany, Australia and some other European markets.
The changes allowed Tesla to hit its FY2021 Q4 production targets. Interestingly, the company did not disclose the changes to its customers as it considers the changes made to be redundant in nature.
While the company does not expect the changes to have any effect on the driving experience, there is one key change. When Tesla updates its vehicles ‘over-the-air,’ these modified vehicles will not be able to use Level 3 autonomous driving.
The Level 3 system allows Tesla owners, who have coughed up an additional $12,000, or $199 a month (in the US), for the full self-driving or FSD software, to drive their Tesla's fully hands-free. For these modified cars, a retrofit of the steering column would be needed at Tesla service centres to enjoy the same software.
Apart from its electric tag, Elon Musk, Tesla CEO and Co-Founder, has pegged the autonomous driving capabilities of the vehicles as the major selling point. Musk has repeatedly promised FSD to be shipped within a year.
“My personal guess is that we’ll achieve full self-driving this year at a safety level significantly greater than a person. So the cars in the fleet essentially becoming self-driving via software update, I think, might end up being the biggest increase in asset value of any asset class in history. We shall see," Musk had recently said in an earnings call.
Currently, Tesla owners only have access to the Level 2 autonomous driving features. These features don't require the dual-control electronic steering system to function properly.
Apart from the commitments that the company has made towards customers paying for these features, the safety of the move has become a concern.
“If something like a chip or an ECU is not providing additional functionality, if it is truly redundant, you may be able to turn it off or leave it out. With chips and software, there’s a little bit of wiggle room. I can reassign stuff here and there,” HWA Analytics’ Richard Wallace told CNBC.
“I cannot think of a case where an automaker would say ‘You know what? We’ll take a component out of that module, even though it was there for a good reason and we’ll hope nothing happens.’ Going from a dual chip to a single chip variant in a vehicle can make a system simpler and make it better in some cases. But they’d really need to do a lot of validation," added IHS Markit Senior Principal Analyst Phil Amsrud to CNBC.
While most companies would take over a quarter of the year to test the impact of such decisions, Tesla made the call in just weeks.
The company expects that its capabilities to send over-the-air updates to fix any bugs or issues would prevent any issues from cropping up.
