Infineon says it will supply chips to Tesla’s Model 3 electric car in a deal for higher volume output that appears to supplement one that it lost out on.
Reuters reported that it was beaten in the contract for initial supplier by STMicroelectronics for the sought after business.
Go deeper with GlobalData
Infineon, which supplies chips to control the batteries and motors in many electric vehicles, confirmed its parts would go into the Model 3, which is now ramping up for high volume production in 2018.
“We do not comment on the individual models, but we will also will be present in Model 3,” Chief Executive Reinhard Ploss told Reuters.
Reuters reported that STMicroelectronics was first to market with a new class of 1,200-volt silicon-carbide chips, which helped it win the initial deal to supply power chips for the Model 3. However, Infineon has become a second source of such chips as volumes ramp up next year, the report said.
Tesla faces a big challenge to ramp-up production on the Model 3, which it hopes will secure much lower unit-costs for its electric vehicles and swing the loss-making company into profit. However, some analysts caution that it has had ramp-up difficulties with previous models and will also be under some pressure to secure high transaction prices.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataWhile deposits put down for the Model 3 are impressively large – Elon Musk talks about 500,000 – the net figure after cancellations may be considerably lower (and Tesla is coy about the net numbers).
