Tesla Chip Shortage Fix Was To Pull Steering Components Without Telling Buyers

The change could pose safety concerns and puts CEO Elon Musk's promise of over the air-only software updates for Full Self-Driving in jeopardy

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Tesla’s Shanghai Gigafactory
Tesla’s Shanghai Gigafactory
Photo: Xiaolu Chu (Getty Images)

It seems that Tesla took some major shortcuts in production to get around the chip shortage and meet production goals. According to CNBC, the company decided to remove one of the two electronic control units included in the steering racks of some Chinese made Model 3 and Model Y cars, then failed to inform buyers what it had done.

This has already impacted tens of thousands of vehicles being sold to customers in China, Australia, the United Kingdom, Germany and other parts of Europe. The report cites two employees and an internal correspondence.

All of that is bad enough on its own, but the real kicker of the story is the fact that you’re first hearing about this is in a news story and not from the company that’s de-contenting your car. Tesla had reportedly considered telling you, the buyer, about the change, but decided not to.


The omission of this part also means Tesla won’t be able to add “level 3” autonomous driving functionality to the impacted cars with just a mere over-the-air software update. That’s in direct contradiction with what Elon Musk himself has said in the past:

“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 said in an earnings call.

Full Self-Driving Beta does not seem to exactly be ready for primetime, with or without the part. Recently, an incident where a Tesla Model 3 using FSD Beta crashed into a bollard was caught on camera and uploaded to YouTube.

Tesla employees said cars would need the dual electronic control unit systems. That means any car that would theoretically be upgraded to level 3 driving would need to have the part retrofitted at a service visit. They also said the exclusion wouldn’t cause any safety issues, since the removed part was deemed to be a secondary — or redundant — unit, mainly used as a backup.


But, is this still a safety issue? Well, we can’t know for sure since Tesla is a company that likes to keep things under wraps. But CNBC asked a veteran transportation safety researcher about what he thought:

“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,” Richard Wallace said.


A lot of the component’s safety importance depends on the car’s computing architecture, another analyst from IHS Markit, an information services company, said:

“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,’” Phil Amsurd, an IHS Markit principal analyst, told CNBC.


He continued to say that most automakers would spend 1,000 hours on testing before making big changes like that. It could take years for quality or safety issues to become clear after a change like this is made.

On the other hand, Tesla employees say the company spent less than five weeks discussing the changes before moving ahead, and Tesla didn’t view it as a big deal.


This all begs a couple interesting question. What else, if anything, is Tesla leaving off of its cars in the name of production goals? And will these same shortcuts take place on cars manufacturers in or shipped to the United States? There’s really no way to know unless other whistleblowers come forward.