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Toyota was one of the few (only?) companies to keep a large stockpile of chips on hand to continue production in case of a supply interruption. They kept something like two years worth on hand. I guess 18 months of doing the extremely heavy lifting for the whole industry has taken its toll and now they're in the same boat.
That is good news for planet earth!
On the other hand, Tesla is tiny compared to Toyota but is probably more flexible and can adapt faster, e.g by using alt chips with new firmware and by using fewer chips per vehicles (to be proven, but we know Model Y has half the number of ECUs of Mach E / ID.4 for instance).
Also, without dealers, Tesla could better manage their build-to-order system and pricing (to push customers towards high margin vehicles and forgo volume growth while the shortage continues)
As a chip supplier, I'd be feeling a lot of pressure right now. In the short term you can squeeze and the tail can wag the dog for a bit. But longer term this opens the door wide open for new competitors in the market and / or vertical integration.
I don't think chip suppliers are playing games here, are they? I think in general all chip manufacturers are at capacity and it comes down to getting in line. And I'm sure many chip manufacturers are trying to expand their capacity. I can't imagine they're sitting there thinking this will last forever.
As Taleb likes to say, an efficient system is the opposite of a robust system, kind of by definition. We are now witnessing the effects of our modern hyper-efficient just-in-time global manufacturing system.
Toyota is one of the last automaker to reduce production due to the current chip shortage, because they had enough chips for 18-24 months of production.
Edit: It seems some of Toyota factories in Southeast Asia have shutdown due to Covid spread in those countries resulting in shortage of parts supplied to factories in Japan. Reported to be 40% reduction in production.
As a chip supplier, I'd be feeling a lot of pressure right now. In the short term you can squeeze and the tail can wag the dog for a bit. But longer term this opens the door wide open for new competitors in the market and / or vertical integration.
That is good news for planet earth!
Why? Because older, less efficient cars are being kept on the road for longer?
This isn't true for mileage though. If you move closer to work, your commute will emit less.
Toyota was one of the few (only?) companies to keep a large stockpile of chips on hand to continue production in case of a supply interruption. They kept something like two years worth on hand. I guess 18 months of doing the extremely heavy lifting for the whole industry has taken its toll and now they're in the same boat.
I thought Toyota invented not doing that.
Toyota was one of the few (only?) companies to keep a large stockpile of chips on hand to continue production in case of a supply interruption. They kept something like two years worth on hand. I guess 18 months of doing the extremely heavy lifting for the whole industry has taken its toll and now they're in the same boat.
I thought Toyota invented not doing that.
Toyota was one of the few (only?) companies to keep a large stockpile of chips on hand to continue production in case of a supply interruption. They kept something like two years worth on hand. I guess 18 months of doing the extremely heavy lifting for the whole industry has taken its toll and now they're in the same boat.
I thought Toyota invented not doing that.