Tens of thousands of Teslas could be incapable of fully-autonomous driving because they lack a standard microchip, report says

• Tesla removed a steering chip from some cars amid the global semiconductor shortage, sources told CNBC.
• This left tens of thousands of Teslas without the ability to become fully-autonomous, CNBC said.
• Tesla also removed the chip because of pressure to meet its fourth-quarter sales goal, CNBC reported.

Tens of thousands of Teslas could be incapable of fully-autonomous driving because they lack a microchip that’s normally installed in the vehicle, a report by CNBC suggests.

Tesla decided not to install the chip amid the global semiconductor shortage, and because it was under pressure to hit its fourth-quarter sales target, CNBC said, citing information from two Tesla employees and internal correspondence.

The omission of the chip affects tens of thousands of Model 3 and Model Y cars made in China, the employees told CNBC. The affected vehicles were sent to customers in China and exported to countries including Australia, the UK, and Germany, they said.

Tesla decided not to tell affected customers about the omission of the chip, which would not cause safety issues because it works as part of a pair and is seen as a backup for existing versions of Tesla’s driver-assist technology, the Tesla employees told CNBC.

According to CNBC, the missing component is one of two electronic control units that are part of the steering system that help turn the car. The component would need to be retrofitted to affected vehicles if they’re to be capable of becoming fully autonomous in the future, the Tesla employees told CNBC.

Teslas without the steering component can still benefit from the vehicle’s standard Autopilot feature and the $12,000 add-on Full Self-Driving (FSD) feature, the employees told CNBC. However, they would need a steering rack retrofit when Tesla launches a more sophisticated version of FSD, they said.

Tesla didn’t immediately respond to Insider’s request for comment made outside of US operating hours.

Tesla CEO Elon Musk predicted in Tesla’s fourth-quarter earnings call that the final version of FSD would be ready this year, saying: “I would be shocked if we do not achieve Full Self-Driving safer than human this year.” Musk has been known to over-promise and under-deliver on timings.