Rumors concerning the real reasons behind Tesla's decision to announce a 75% cut in SiC use for its future EVs have recently emerged, with some sources saying it has a lot to do with its SiC supplier STMicroelectronics (STM) and some others associating it with the EV giant's worry about low SiC yield rates and insufficient supply capacity.
Some market analysts said that STM has rolled out second- and third-generation SiC MOSFETs that are smaller in size than first-generation ones and can naturally cut the overall SiC use, and Tesla reportedly is quite satisfied with the new specs. But despite a reduction in SiC use, they continued, STM has not proportionally lowered the prices for its new-generation SiC MOSFETs, significantly disappointing Tesla.
STM continues to see its SiC supply fall short of demand, with order visibility clear for several years to come, and its new-generation products reducing the use of SiC can create more EV development space and reduce EV weight. As such, the supplier finds no reasons for lowering the prices of its SiC MOSFETs, leading to an impasse with Tesla.
Analysts continued that Tesla took the initiative to announce a 75% cut in SiC use mainly to 'crack the whip' against STM for a better bargaining position, or to stir ripples in the arena of other power devices such as GaN and IGBT components and modules.
Actually, quite a few suppliers have quickly launched alternative solutions. GaN Systems, for instance, has rolled out its 800V GaN on-board charging solution, and Onsemi has also released its 1200V IGBT power solution. Both have claimed the availability of total replacement solutions for SiC components.
Analysts said that Tesla will not release its new-generation EVs until 2025, and therefore it is too early to judge whether Tesla will really proceed with its SiC cut plan, given that it still have time for price negotiations with its SiC components supply chain.
Meanwhile, channel market sources noted that Tesla aims to achieve a 50% annual growth goal for its EV sales, and with 1.31 million units sold in 2022, the sales scale will be bigger and bigger, making it harder for Tesla to withstand unstable supply of components.
The sources said that following a comprehensive evaluation and estimation, Tesla finds that the yield rates for SIC wafer growth can hardly achieve a significant breakthrough by 2027. This will make Tesla in increasing danger of being choked in the future, driving it to find new solutions in advance.
Apart from smaller-size SiC chips from STM, Tesla can also have other replacement solutions, such as SiC combined with GaN, or SiC paired with IGBT. As Tesla hopes to cut its EV production costs by 50% in the future, IGBT may be a priority choice, according to market observers.
The observers said if IGBT components are used as the basis, the cost of GaN is about 2-3 times higher, and that of SiC is 4–5 times higher.
