‘Never Seen Anything Like It’: Elon Musk Reacts To Global Supply Chain Issues

Tesla and SpaceX CEO Elon Musk responded to criticism regarding rising prices alongside a reduction in features for his series of Tesla electric cars, referencing “major supply chain pressure,” especially when it comes to “raw materials.”

“I really don’t like the direction [Tesla] is going raising prices of vehicles but removing features like lumbar for the Model Y. On top of rumors of FSD increase to $14k without any real added features to FSD unless you’re a beta tester,” commented one Twitter user.

“Moving lumbar was removed only in front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used,” responded Musk, who is worth an estimated $151 billion. “Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially.”

Moving lumbar was removed only in front passenger seat of 3/Y (obv not there in rear seats). Logs showed almost no usage. Not worth cost/mass for everyone when almost never used.

Prices increasing due to major supply chain price pressure industry-wide. Raw materials especially.

— Elon Musk (@elonmusk) May 31, 2021

In the replies thread, another Twitter user commented, “The fact you can view logs for passenger seat usage tells me you can have saved presets for passenger seats as well. Hope that’s coming soon,” to which Musk responded, “Agreed.”

As noted by The Verge, Musk followed up on this subject early on Wednesday, saying that the company’s “biggest challenge” is “supply chain,” and this is particularly true when it comes to microcontroller chips.

“Quick thought – Fact: [Tesla] is shipping cars from China to Europe and increasing prices in the U.S. underlying reality: demand in the US is insane, Tesla has to increase prices and keep all local production onshore to manage it. 2Q21 print will be interesting!” commented yet another Twitter user.

“Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it,” replied Musk. He then proceeded to liken the company’s decision to “overorder” various products to the “toilet paper shortage” which occurred at the start of the COVID-19 outbreak, but at “epic scale.”

“Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale,” wrote Musk. “That said, it’s obv not a long-term issue.”

Our biggest challenge is supply chain, especially microcontroller chips. Never seen anything like it.

Fear of running out is causing every company to overorder – like the toilet paper shortage, but at epic scale.

That said, it’s obv not a long-term issue.

— Elon Musk (@elonmusk) June 2, 2021

The global shortage in microchips is having a deepening impact on multiple industries. As CNBC noted, “As technology has advanced, semiconductor chips have spread from computers and cars to toothbrushes and tumble dryers,” which means that a shortage in the now crucial technology is leading to delays across broad swathes of consumer product areas, so that “car makers are no longer the only companies feeling the pinch.”

According to a report from Forbes, the shortage has resulted in Ford taking over 346,000 vehicles out of production, while General Motors has reduced its production total by over 277,000.

“When it comes to the models most impacted by the shortage, the Ford F-Series pickup comes first on the list with 109,710 units fewer planned for production. 98,584 fewer Jeep Cherokees are planned while 81,833 fewer Chevrolet Equinoxes are in the pipeline,” Forbes reported, adding that “there is no light at the end of the tunnel for hard-pressed carmakers.”

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