Exposed Tesla's domestic Model 3/Y "reduction", which is related to the L3 autopilot function

According to CNBC, information revealed by two Tesla employees and internal communication records exposed by local media in the United States show that in order to cope with the shortage of chip supply and achieve the fourth quarter delivery target, Tesla (TSLA.US) decided to remove some of the steering parts on the Chinese-made Model 3 and Model Y.

This component is an electronic control unit in an electric power steering system that converts the steering wheel's rotation signal into the vehicle's wheel steering. Upgrading to L3 autonomous driving will require two electronic control unit systems, so the car will need to be retrofitted during service access.

Tesla said the change would not pose a safety issue because the parts removed belonged to the "secondary electronic control unit" and were mainly used to support backup functions. For now, Tesla still uses L2-level assisted driving features, namely Autopilot and FSD, without the need for a dual-control steering system.

Tesla decided that the adjustment would not notify customers, at least until L3 level self-driving features were introduced. This has affected tens of thousands of cars shipped to customers in China, Australia, the Uk, Germany and other parts of Europe. It's unclear whether Tesla will make similar changes to cars made or shipped to the U.S.

Only domestic Model 3/Y "de-allocation"? Will the price of "reduced" models change? Who will bear the cost of vehicle modification for the subsequent upgrade to L3 autonomous driving?

On February 8, Red Star Capital Bureau asked the relevant person in charge of Tesla China about this, and there was no reply as of press time.

The Chinese market is of great significance to Tesla.

According to Tesla's 10-K annual report file submitted to the US Securities and Exchange Commission (SEC), Tesla's revenue in the Chinese market in 2021 reached $13.844 billion, a year-on-year increase of 107.8%.

Tesla's revenue in the Chinese market in the first three quarters of last year was $9.015 billion, and by this estimate, Tesla's revenue in China in the fourth quarter of last year was $4.829 billion.

According to the financial report, Tesla's revenue in 2021 is 53.823 billion US dollars, and the Chinese market accounts for 25.7% of the company's revenue. China has become Tesla's largest overseas market.

In terms of sales, statistics from the Association show that Tesla delivered 484,130 vehicles in China last year, accounting for 51.7% of Tesla's global 936,000 deliveries. Tesla's revenue in China increased significantly, mainly due to the increase in production and deliveries at the Shanghai Gigafactory.

In 2021, Tesla's Shanghai Super Project will deliver more than 480,000 vehicles, accounting for 51.7% of the annual global total deliveries, and will expand production this year. In November 2021, the environmental information disclosure platform of Shanghai enterprises and institutions showed that Tesla was conducting an environmental impact assessment of the second phase of the Shanghai Gigafactory Project (Phase I) production line optimization project. The project, with a total investment of 1.2 billion yuan, will be completed as soon as April this year. After the completion of the project, the annual production capacity of Tesla's Shanghai plant is expected to exceed 1 million units.

Tesla plans to increase deliveries by more than 50 percent in 2022. Due to the possibility of delays in the start of operation of the Berlin plant, the main increase in delivery volume was the Shanghai plant. The shortage of chips and other components restricts the increase in production capacity.

Tesla expects that the chip will continue to be tight in 2022 and will not ease until next year. Musk said on the earnings call that chip shortage is not a long-term problem, this year's chip supply problem has eased compared with 2021, and batteries are expected to become a new bottleneck in 2023.

It is worth mentioning that in order to meet the demand for employee growth, on February 7, Tesla China once again released recruitment information for the society, adding ten categories of new positions, a total of 1523 people.

Red Star News reporter Wu Danruo

Edited by Yu Dongmei

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