Tesla to pay for chips upfront to avoid global shortage, even considering purchasing a plant

Tesla building

Automakers around the world have been impacted by the recent chip shortage, forcing some to shut down production lines for weeks and months at a time.

Tesla has so far been able to escape relatively unscathed by pivoting to new chip providers and developing new firmware on the fly, as explained in the company’s Q1 2021 shareholder deck.

“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 is reportedly ready to pay for chips in advance, and even considering purchasing their own plant in order to secure a stable supply.

According to sources who spoke to The Financial Times, the automaker is currently in discussions with chip producers in Taiwan, South Korea, and the US.

The purchase of a plant is still very much in the preliminary stages, and unlikely considering the high costs involved in such a deal.

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