Recently, Cathie Wood made headlines with her tweet about the chip shortage. Using Tesla as an example, she noted that they saw a major increase in car sales year over year, while General Motors saw a decrease due to the chip shortage. However, according to her, electric vehicles require 3 to 5 times the amount of chips than regular gas vehicles, which many articles prove. Because they are more complicated in a sense, extra chips would be required, but it’s possible that the chips could be improved to start off with.
For now, the auto industry is currently investing billions of dollars into chips made of silicon carbide, a compound that contains 1 atom of silicon and 1 atom of carbon. This is meant to be an improved version of regular silicon, and it helps improve the drive and durability of the car on a single charge. Funny enough, Tesla has been the leader of this movement as they’ve been using these chips for a while, with many professors saying that silicon carbide propelled them to fame. The problem for other companies is the cost as a whole, with it being 5 times more expensive than silicon itself. People close to the industry believe that the price will likely be at a premium to silicon for years to come, but technologies related to silicon carbide could save 750 dollars in battery costs per each engine. Like almost everything in today’s world, silicon carbide is something that is very expensive, but it could also save you money in the long run. What do you think about these alternative chips?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.