Musk's optimism comes from the production expected from new semiconductor plants that are planned or under construction.
"There's a lot of chip fabrication plants that are being built," Musk said during a joint session with Stellantis (STLA) - Get Stellantis NV Report and Ferrari (RACE) - Get Ferrari NV Report Chairman John Elkann, at Italian Tech week, Reuters reported.
"I think we will have good capacity for providing chips by next year."
The global semiconductor shortage for nearly a year has caused grief for automakers, as the Covid-19 pandemic has hurt assembly lines in Southeast Asia.
Production delays in Malaysia, Vietnam and the Philippines are forcing automakers to cut production. That's because the chips are essential to the new generations of vehicles, which require computing power.
The chip shortage and production delays have reverberated to cause much higher prices for purchased and rental cars.
On Thursday, the White House held its second semiconductor summit in five months, featuring companies like Intel (INTC) - Get Intel Corporation (INTC) Report, General Motors (GM) - Get General Motors Company (GM) Report, Ford (F) - Get Ford Motor Company Report, Apple (AAPL) - Get Apple Inc. (AAPL) Report, Microsoft (MSFT) - Get Microsoft Corporation (MSFT) Report, Samsung SSNLF and others.
At the meeting, the White House asked companies to clarify the supply and demand in the market, the Washington Post reported.
The chip shortages are expected to cost the auto industry $450 billion in global sales through the end of 2022, the Post reported.
Pat Gelsinger, CEO of Intel, the U.S.'s largest chipmaker, has said that he expects shortages to last into 2023.
At last check shares of Tesla were down 0.7% to $748.10.