Often real insight on technology stocks is to be found during the questions and answers sessions that follow quarterly earnings calls. Elon Musk explains very clearly why he sees Tesla as a software company and how the chip crunch strengthened Tesla leadership in manufacturing.

Elon Musk on software and chips:

“…where there are supply chain issues and our Tier 1s and Tier 2s, get into it with us on the engineering side then we find solutions, whether it’s alternative chips or changing the entire structure of the pack to make it work. And I think that’s an advantage we have that many other OEs just simply have not. I think Tesla is as much a software company as it is a hardware company. One of the ways that we have been able to address supply chain issues on the chip front is by rewriting software to be able to use different chips, or in some cases, achieve dual use of a single chip, which is even better. And actually, quite frankly, the chip shortage has served as a forcing function for us to reduce the number of chips in the car. Yes, it turns out we had more chips than we needed. But that’s a testament to our software team that we are able to roll a new chip into the car and write a whole new patch of software for that chip without interrupting production.”

Tesla Earnings Call Seeking Alpha Transcript July 20