Tesla ships models 3 and Y with faulty USB ports from Shanghai assembly as global chip shortage spreads to China

Tesla is shipping electric vehicles with defective USB ports from its Shanghai Gigafactory, as the global shortage of semiconductor chips has also affected the bellwether maker of smart cars in the world’s largest vehicle market.

Starting from November 6, the USB ports in the front-row central consoles of the Model 3 sedans and Model Y sports utility vehicles (SUVs) can only be used for charging, not for data transfer, Tesla said in response to customers’ queries. The previous USB ports were usable for both charging and data transfers, according to the carmaker’s specifications.

Tesla’s setback may be a boon to LiAuto, NIO and Xpeng, giving the three China-based competitors – who have yet to report any issues caused by the chip shortage – a leg up in quality over the market’s sales leader. Numerous Tesla owners in the United States reported last week that they had been caught by surprise when their Models 3 or Y electric vehicles were delivered with missing USB ports, in some cases gaping holes where the universal service bus should have been.

“The impact could be huge for Tesla, as consumers who consider the defect an important issue might switch to other brands, and it risks the violation of consumer rights by not giving advance notice to the buyers,” said David Zhang, a researcher for the automotive industry at the North China University of Technology.

The world’s largest vehicle market since 2009, China is also the biggest semiconductor importer, buying US$38 billion of chips as recently as June, almost double the value of what the country spends on crude oil in the same month. The worldwide shortage started in late 2020, as foundries misjudged the demand of work-from-home employees and increasing demand for electronic gadgets amid the Covid-19 pandemic.