Tesla’s Model 3, the most affordable car in the U.S. automaker’s all-electric line-up, has electronics that are at least 6 years ahead of its rivals, reveals a teardown done by Japanese business publication Nikkei.

According to Nikkei, Tesla which has been around for less than 20 years is some six years or more ahead of established “industry giants” like Toyota and Volkswagen (VW) that sell 10 million cars every year. 

The main reason for this, according to Nikkei, is Tesla’s integrated central control unit, or “full self-driving computer”, also known as Hardware 3. This custom-designed computer is Tesla’s “biggest weapon in the burgeoning EV market” and it could “end the auto industry supply chain as we know it,” Nikkei wrote. 

One stunned engineer from a major Japanese automaker declared that their firm simply “cannot do it” and referred to legacy automakers’ inability to catch up to Tesla’s AI chips. 

In its report, Nikkei shares: 

“The module — released last spring and found in all new Model 3, Model S and Model X vehicles — includes two custom, 260-sq.-millimeter AI chips. Tesla developed the chips on its own, along with special software designed to complement the hardware. The computer powers the cars’ self-driving capabilities as well as their advanced in-car “infotainment” system”.

“The Model 3’s “full self-driving computer” consists of two boards: one with custom AI chips for autonomous driving, and a media control unit for the “infotainment” system. A water-cooled heat sink is installed between the two boards.”

The report continues by stating that industry experts believe that this technology won’t be available on other rival manufacturers’ models until at least 2025. From this point of view, Tesla has about 6 years of advantage over its rivals such as Toyota and VW. Also, many components in the Model 3 bore the Tesla logo, which means the carmaker has control over the development of most of the technologies inside the car. 

So, what is stopping Toyota or VW or other automakers from investing in developing their own advanced computing platform with their vast resources?

According to the report, car manufacturers fear that computers like Tesla’s will make car parts supply chains obsolete. These systems will drastically reduce the number of electronic control units needed in the car, which could be a big deal for component suppliers and their employees. They believe that other automakers “feel obliged to continue using complicated webs of dozens of ECUs.” 

On the other hand, Tesla can take a more “clean slate” and a vertical approach to electronics. It has much tighter control over the development of almost all key technologies in the car. This means that the company can boost the car’s technology capability through “over the air” software updates.

Currently, the vehicles are still classified as Level 2 or “partially autonomous” cars. However, Tesla CEO Elon Musk has said they have the necessary components now for full self-driving capability. 

From software to electric drive systems, Tesla is gradually bringing more development tasks in-house. “If this strategy succeeds, competitors will have little choice but to follow suit, upending their old business models and supply chains as they try to overcome Tesla’s head start,” Nikkei concluded.

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