Why Tesla Could Become the Next Apple

Why Tesla Could Become the Next Apple

May 23, 2017

By Mohanbir Sawhney, Fortune Tesla CEO Elon Musk’s bold prediction that his $53 billion company could one day be as valuable as Apple the most valuable company in the world with an $800 billion market cap, is based on his logic that Tesla will disrupt manufacturing with automation by going after the “machine that makes the machine.” While it may seem just pie in the sky, there is a case for Tesla to become the next Apple. Tesla is betting that it can create a fully automated manufacturing process that will be as revolutionary as Henry Ford’s continuous assembly line. Ford revolutionized manufacturing in 1913 by creating a process that broke the assembly of the Ford Model T into 84 distinct steps as the car moved down the line on a conveyer belt. The process revolutionized production and dropped the assembly time for a single vehicle from 12 hours to 90 minutes. Ford was able to reduce the cost of the Model T from $850 to $300 and produce a car every 24 seconds. Ford ended up selling 15 million Model T cars by 1927, and the continuous assembly line remains the foundation of automobile manufacturing to this day. Although automation with robots has dramatically improved the efficiency of automotive manufacturing, the final assembly is still a manual process.   Tesla aims to combine its capabilities in advanced software and artificial intelligence (AI) with advanced automated manufacturing capabilities it acquired in November 2016 by buying Grohmann Automation to create a factory that will produce very high volumes at much lower costs than today’s auto factories. A fascinating insight from Tesla’s blog: The “factory becomes more of a product than the product itself.” Tesla believes that it can usher in the next manufacturing revolution by dramatically increasing production volumes and reducing labor costs in manufacturing. So why won’t other auto manufacturers follow suit and overtake Tesla? First, their products, as well as their factories, are bogged down by legacy. Tesla’s electric cars are significantly easier to manufacture than internal combustion (IC) vehicles. Tesla’s Model S has fewer than 20 moving parts, compared with almost 1,500 moving parts in an IC-engine car. This means that there are...

Has Tesla Found a Better Way to Test and Validate Vehicles?

Has Tesla Found a Better Way to Test and Validate Vehicles?

Mar 24, 2017

By Charles Murray, DesignNews Electric carmaker might shorten the beta test phase of its forthcoming Tesla Model 3 vehicle. A recent statement by Tesla Inc. CEO Elon Musk has auto insiders wondering if the electric car maker has found a better way to test and validate vehicles, or if it is embarking on a risky new course. In the statement made on an exclusive investor-only call last week, Musk reportedly suggested that the beta test phase of the company’s moderately-priced Model 3 EV is being shortened, and that its “early release candidates” are already being built on production tooling. According to various electric car websites, such as Elektrek, Tesla engineers used sophisticated design-for-manufacturability analytics, enabling them to limit the number of pre-production iterations of the vehicle. The result is that the quality of the so-called “release candidates” is higher than it was for the company’s earlier products, the Model S and Model X, reports said. “The most plausible interpretation of this statement about release candidates is that (Musk) has opted to short-cut development testing of prototype vehicles,” noted Sam Abuelsamid, senior reach analyst for Navigant Research , in an e-mail to Design News. “In all likelihood, he is assuming that they can get by with more simulation testing and less testing of physical prototypes.” If that is indeed Musk’s plan, it would be a departure from the way automobiles have traditionally been tested, validated and manufactured. In common practice, beta testing involves months and tens of thousands of testing miles on vehicles built on pre-production tooling. In the case of the Model 3 (photo, left), that phase may have been short-circuited, but it’s difficult to know definitively because Musk often uses different terms than other automakers when describing the process. Tesla did not respond to an e-mail from Design News asking for clarification. Automotive experts said the industry will watch carefully to see if the Silicon Valley carmaker’s software-centric approach is successful, but many were skeptical. “Everybody is trying to accelerate the process of launch,” noted David Cole, chairman emeritus of the Center for Automotive Research . “But if you say you’re going to skip part of the normal process in validating your tooling,...

Tesla Is A ‘Gift To U.S. Manufacturing’

Tesla Is A ‘Gift To U.S. Manufacturing’

Jan 30, 2017

By Jayson Derrick, Benzinga Trip Chowdhry of Global Equities Research is a big believer in Tesla Motors Inc outlook and its CEO Elon Musk. In a research report Monday, Chowdhry argued that Musk and his Gigafactory plan is the “poster child for the new USA manufacturing” and the “blueprint for the modern manufacturing.” Elbowing Aside The Competition Chowdhry stated that Tesla’s “GigaScale” is essential for the USA to retain its manufacturing leadership. Meanwhile, some of the largest and most notable tech companies are falling well short of Musk’s vision. Specifically, Apple Inc. new headquarters in Cupertino, California, is just 2.8 million square feet, while Boeing Co Everett factory is 4.3 million square feet. And Tesla’s Gigafactory? A staggering 10 million square feet that boasts the following: Designed for volumetric efficiency. Optimized for density. Twenty (20) percent of workers require similar skills to Apple’s chief design officer Jonathan “Jony” Ive but are designing the actual factory, parts and curvature. Another 30 percent of workers are process engineers who are tasked with rethinking every production step using the first principle thinking. A new “Modern Supply-Chain-as-a-Service” thinking powered by Microsoft’s Azure Cloud. A tight vertical integration system that provides real-time visibility on supply, zero transportation costs, zero packaging costs and zero tariffs, among others. Paving The Way For Trump’s Dream Come True Bottom line, due to the factors above the analyst believes that Tesla’s Gigafactory is 10 times more efficient than any similar hypothetical factory and is “essential for the USA to regain its global leadership in manufacturing.”...

Tesla’s Impact on US Manufacturing Growing by the Day

Tesla’s Impact on US Manufacturing Growing by the Day

Oct 19, 2016

By Eric Schaal, CheatSheet If you have followed any of the 2016 presidential campaign, you probably heard the recurring theme of lost U.S. manufacturing jobs and how to get them back. Some politicians suggest becoming protectionist and burning trade pacts with foreign nations. Meanwhile, others say low-wage jobs that disappeared won’t come back and the time has come for new industries to blossom. Yet all have ignored the success of American-made electric vehicles. Actually, Tesla offers an example of how a mid-21st-century American business might look. By focusing exclusively on electric cars, solar power, and energy storage, the Palo Alto-based company planted its flag in the future. Unsurprisingly, the effort involved the creation of thousands of manufacturing jobs. From a rapidly expanding automotive plant to the world’s largest battery factory now in the works, Tesla is officially a force in the new economy out West. The EV and green energy company may soon have another flag to plant — this time on the East Coast. In mid-October, Tesla announced it would collaborate with Panasonic on the production of photovoltaic cells and modules for solar installations in a Buffalo facility. Taken as a whole, Tesla’s impact on U.S. manufacturing is already significant and poised to grow exponentially in the coming years. The Gigafactory and the battery boom Tesla officially opened its battery Gigafactory near Sparks, Nevada, in the summer of 2016. Designed to double the world’s battery production and eventually be the biggest building on the planet, we have only glimpsed the beginning. By the time the EV maker ramps up production and starts supplying batteries for Model 3, the Gigafactory’s workforce will increase about seven times. Elon Musk, the company founder and CEO, said the factory could very well employ 10,000 people by 2020. At that point, the automaker will have at least three vehicles and an annual production goal of 1 million cars. The many service jobs and related opportunities make Tesla a serious economic force in what used to be a Nevada desert. The expanding Fremont plant While the Gigafactory churns out the batteries, employees assemble the Model S and X at the Tesla Factory in Northern California. The automaker employs over 6,000 people at the plant, making it Fremont’s largest employer. According to a Los Angeles Times...

What Tesla is doing in America’s newest smokestacks-free…

What Tesla is doing in America’s newest smokestacks-free…

Jul 29, 2015

“What Tesla is doing in America’s newest smokestacks-free manufacturing city” By Bruce Katz and Kelly Kline, Fortune Fremont, California is reinventing what it means to live in a factory town, and the electric car giant has joined in what could be a new era of U.S. manufacturing. Manufacturing may conjure up images of smokestacks and smelters, but two former industrial towns are seeking to change what it means—and what it looks like—to make things. By locating large companies near small entrepreneurs, research scientists, and young apprentices, Fremont, Calif. and the Sheffield urban area in the U.K. are embracing the innovation district—new industrial neighborhoods that harness the latest ideas in technology and place-making. The result is smarter products for the global market and the ability to keep and grow manufacturing close to home. Innovation districts mix corporations, start-up ventures, and advanced research institutions in dense urban areas rich with housing, public transit, and amenities. Think Kendall Square in Cambridge, Mass., University City in Philadelphia, or the new urban vision for Research Triangle Park outside Raleigh-Durham, N.C. Innovation districts cater to high-value research as well as creative endeavors such as industrial design and architecture. Companies benefit from their close proximity to universities and the talented workers and research ideas these anchor institutions generate. But can these dynamics exist when overlaid on former industrial centers? Two mid-sized cities Fremont and Sheffield are in different parts of the world but share long legacies in manufacturing. In Fremont, a former General Motors plant is now home to electric car manufacturer Tesla  , a company that embodies the shift to advanced manufacturing processes and connections between hardware and software. The factory is steps away from a new Bay Area Rapid Transit station and hundreds of acres of land on which there are plans to develop a more urban, amenity-rich environment. In Sheffield’s neighboring town of Rotherham, a former coal mine now houses the Advanced Manufacturing Research Park, where the University of Sheffield collaborates with over 100 leading research and development (R&D) and production companies including Boeing, Rolls-Royce, BAE Systems, Hitachi, and Tata. Sheffield and Rotherham show how R&D benefits from concentrated districts that take advantage of open, networked innovation. Fremont and Sheffield are...