Tesla (TSLA) - Get Report reportedly is on a global hunt to secure its own stash of semiconductor chips amid the ongoing shortage that has hammered the electric vehicle company and the rest of the auto industry.
The Financial Times reported that Tesla was looking into various options to secure much-needed chips that are critical to making its cars run, including paying in advance for supplies and even potentially buying its own plant.
Tesla is trying to secure chips with companies in Taiwan and South Korea, which make the newer generation models of chips that it needs, as well as with companies in the U.S., according to the Financial Times, which cited industry sources.
As for buying a plant outright, sources told the FT that those plans were in a much earlier stage, given such an effort would require significantly more time and capital.
Tesla CEO Elon Musk is no stranger to the concept of shunning global supply chains, having produced the world’s first mass-produced fleet of battery-powered vehicles almost entirely in-house by spending billions on production and billions more on sourcing raw materials for its batteries.
The electric carmaker last fall reportedly secured its own lithium mining rights in Nevada after dropping a plan to buy a company there. That followed an announcement last June that it struck a deal to buy cobalt, another key ingredient in batteries, from Baar, Switzerland-based Glencore, the world’s biggest cobalt miner.
At the same time, the world’s biggest electric vehicle maker has competitors like Ford (F) - Get Report and others nipping at its heels, boosting pressure to keep its current pace of production going.
Ford on Wednesday said it will boost its investment in electric vehicles to at least $30 billion by 2025, and will create a new division called "Ford Pro" that will focus on commercial vehicles and government customers.
TheStreet founder and Jim Cramer and the Action Alerts Plus team noted in a report this week that Ford has been labeled “… a lesser, legacy auto OEM that was light years behind Tesla. But as we now know, that has proven to be a false narrative.”
“We like Ford for the long term and see it as the cheapest way to play the current bull market in autos and industry transition to electric vehicles,” the AAP team said.
“Tesla is oversold according to the slow stochastic indicator,” Kamich wrote. “The pace of the decline has slowed when we look at our momentum study. Tesla is poised for some sort of turnaround or rebound. Be nimble.”
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