March 3 news, US electric car maker Tesla said at its first investor day event that it plans to reduce the use of silicon carbide transistors in the power system of the next generation of electric vehicles. fall.
Efficiency gains and cost containment were a major topic of discussion at Tesla’s Investor Day event on Wednesday. Colin Campbell, Tesla’s head of powertrain engineering, took the stage to demonstrate how the company plans to reduce the cost of the vehicle’s powertrain while maintaining high performance and conversion efficiency.
“Silicon carbide transistors, which are key components in our next-generation powertrains, are expensive, but we found a way to reduce them by 75% without compromising vehicle performance or efficiency,” Campbell revealed.
Shares of related chipmakers fell as investors worried that Tesla’s move would gradually expand to the entire auto manufacturing industry. Among them, shares of ON Semiconductor and STMicroelectronics both fell about 2% on Thursday, while Wolfspeed shares fell 7% on the day.
Campbell also said at the event that Tesla’s next-generation powertrain will use an engine that doesn’t contain any rare earth metals. Shares in MP Materials, a producer of rare earth materials that supply neodymium to automakers, fell about 11 percent in response.
Campbell did not say when Tesla’s next-generation powertrain could be mass-produced and used in electric vehicles, nor did he specify how much money is currently being invested in these transistors. Tesla executives also didn’t reveal any specific details about the “next generation” of Tesla’s electric vehicles.
Chips made from silicon carbide transistors are widely used in electric vehicles. According to the Institute of Electrical and Electronics Engineers (IEEE), such chips generally resist heat better, last longer and are more energy efficient than those made with silicon transistors.
Bank of America analysts called Tesla’s announcement “notable but premature.” But the analysts also acknowledged that “if true, this technological advancement could be a major risk for the silicon carbide material industry and the corresponding device sector.”
They added, “Cheaper SiC chips are likely to drive the adoption of electric vehicles globally, so the increase in total sales volume may partially offset the loss of SiC usage by suppliers.”
Analysts at New Street Research generally agreed, writing in a note Thursday that Tesla’s announcement is actually a good thing for chipmakers, as they expect electric-vehicle demand for silicon carbide chips both inside and outside the industry will remain at a high level.
“The inverter for the new drivetrain will use a hybrid architecture,” with silicon and silicon carbide transistors working together, so they can handle loads such as those brought on during acceleration by the car, they wrote of Tesla’s statement. peak. And “this kind of hybrid architecture is only suitable for new platforms, that is, small electric vehicles with low price and low performance, and will not be used in Tesla’s existing models such as Model S, Model X, Model 3, Model Y, or CyberTruck electric pickup trucks. .”
New Street Research also doesn’t expect the next-generation, lower-priced Tesla vehicles to be in volume production “before 2025 or 2026.”
Analysts at Wells Fargo maintained their Overweight ratings on Wolfspeed and OnSemi, with $110 price targets on Wolfspeed and $95 on OnSemi.
Analysts at Wells Fargo said in a report on Thursday that the supply chain for silicon carbide chips will remain tight in the near term due to high demand across the auto industry. Every growing EV maker will seek to scale up while controlling costs, but in the short term is more concerned with securing the supply of silicon carbide chips for new models, they said.
