Sizing up Elon Musk’s new plant and semiconductor supplies

Tesla’s German factory still isn’t up and running, even though Elon Musk predicted in October the facility near Berlin would churn out Model Ys before the year was over.

To be fair, this wasn’t entirely up to Musk. Local authorities have yet to give the project the final green light, delaying Tesla’s European expansion just as its local rivals step on the accelerator.

Stellantis yesterday announced deals to develop software with Amazon and sell its Ram ProMaster electric delivery vehicle to the online retailer. Daimler’s Mercedes-Benz on Monday unveiled a battery-powered prototype that can drive more than 620 miles per charge, while Volkswagen last month allocated some $100 billion to EV and software development over the next half decade, the German giant’s biggest such budget yet.

Tesla has built a sizable lead in mass-producing and selling EVs, but 2022 may well be the year when traditional automakers try to catch up in earnest.

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Delivery times

The semiconductor shortage that decimated auto production and sales last year is poised to stick around in 2022. Delivery times for chips lengthened six days to roughly 26 weeks in December compared with the previous month, according to research by Susquehanna Financial Group – the longest since the firm began tracking the data in 2017.

Mercedes said this week it’s keeping in place a task force set up in response to the bottleneck because it’s expecting especially limited supply in the first half. The luxury-car maker expects the situation to ease toward the end of the year, but that was also the prediction in early 2021 until fires and freak weather exacerbated the shortage.

Tesla’s strong performance in China, the world’s biggest auto market, helped fuel the company’s impressive year-end deliveries. China is the largest market for VW, BMW and Mercedes, so defending or even expanding market share there will be a major priority for all three German manufacturers. – Bloomberg