Tesla to pay for chips in advance to overcome shortage

US electric carmaker Tesla is set to pay in advance for chips to secure its supply of the crucial materials and continue production.

According to the Financial Times, the carmaker is also exploring buying a plant as part of efforts to overcome the global shortage, said people familiar with the matter.

Tesla is in talks to secure a chip supply with industry operators in Taiwan, South Korea and the US. Taiwan and South Korea are the main producers of the newest generation mass-production chips that the carmaker needs for its vehicles.

The company already said it was open to branching out into components when it announced plans last year to make its own battery cells.

It already has an in-house engineering team that designs the high-end semiconductors used in autonomous driving, the FT added.

The automotive and tech industries have been hit by a global semiconductor chip shortage in 2021 that has caused several carmakers to reduce production and even close some plants.

Semiconductor makers were forced to shut down production for some months in 2020 as the coronavirus pandemic hit and lockdowns were implemented in numerous countries.

This shortage was aggravated by the fact that coronavirus increased teleworking and one of the consequences of this is the growing demand for mobile phones and computers.