Is it the gigapress that allows Tesla to have high margins?
Could it also be that EV cars are subsidized around the world by governments? Maybe Tesla's "self driving beta" addon adds to the profit more?
I genuinely don't know.
Could it also be that EV cars are subsidized around the world by governments? Maybe Tesla's "self driving beta" addon adds to the profit more?
I genuinely don't know.
> The secret behind Tesla’s 30% gross margin
> The company's Q3 sales rose 58% year-on-year despite a 6% decrease in average selling price, allowing for high margins for the electric vehicle manufacturer
> Analysts point to another factor behind Tesla's high profit margin. Park Hyung-keun, a senior researcher at POSCO Research Institute, said, "Through vertical integration by directly being involved from floor design to parts supply and demand, production and service, Tesla has helped reduce costs by raising the degree of its parts integration and cutting overlapping costs."
> Tesla's unique structure of vertical integration, ranging from the development of semiconductor chips, software and batteries for electric vehicles, to charging, unmanned driving and insurance services, helps lower costs. Its “do-it-all” approach simplifies the automotive production process in a manner resembling that of electronic products. In contrast, other automakers actively utilize production outsourcing to diversify vehicle quality risks and raise output efficiency.
> A leading example is Tesla's “giga” aluminum die-casting process. A Giga Press weighing more than 1 giga pound (400 tonnes, or around 900,000 pounds) stamps the entire rear chassis of a car with a large aluminum alloy. About 70 metal plates can be welded to the chassis, but giga casting can simplify the process and slash production costs by about 40%. This is why Tesla electric vehicles have recently reduced panel gaps issues — defects caused by misaligned steel plate seams.
[1] https://electrek.co/2015/05/24/spacex-transferred-novel-weld...
[2] https://www.teslarati.com/tesla-model-y-spacex-welding-techn...
So it's definitely not subsidies.
On a definitional level, gross profit is difference between price and cost.
Tesla has biggest difference which implies that it's a combination of charging higher prices and having lower production cost that other.
But none of that discounts the value of talking about engineering activities involved in reducing the costs of production, because that stuff matters too. And yes, single-piece chassis are absolutely part of that, as is the minimalist interior (the cockpit BOM for a Tesla is a tiny fraction of what you see on competing EVs), the ongoing sensor fusion architecture (yes, everyone loves to scream about it here, but the upshot is that Tesla doesn't pay for the radar units everyone else uses), etc...
They're actually extremely trim vehicles from an assembly perspective. There's a Munroe video out somewhere where he estimates production costs for a Y vs. a Mach-E and figures there's something like a $10k advantage for Tesla.
The front and rear chassis used to require 100s of robots and parts, and then alignment would have to be checked, more material used, more time, more robots, etc. Replacing the front and rear chassis removed 300 robots ... each, and of course the factory space for the robots, and the time for the assembly line to run past those robots.
The glass roof, which IMO isn't a big feature, can be installed after the chassis is built. Enabling robots to install the dashboard, central console, seats, etc before the roof is installed.
On most cars the dashboard is complex, multilayered, complex set of sensors, displays, spinning needles (speed, rpm, temp, fuel levels, etc). On a Tesla the dash is built on a big square straight piece of aluminum, a simple slot for airflow (no fancy/fiddly air flow controls), and a 15" display. Likely reducing 100s of parts.
The octovalve and related cooling system is a marvel as well, nicely integrating heating/cooling of the cabin, motors, and battery. Dramatically simpler than competing solutions, in particular the Ford Mach E and Lightning.
Most cars have an extremely complex set of CPUs, sensors, and control distributed all around the car. Chips in doors for locks/windows, a separate system for ABS (usually from bosche), networks of temperature/pressure/movement sensors, torque controls/monitoring for window motors, windshield wipers, airflow motors, etc. In the model 3 it's largely integrated into a single board at a level of integration Munroe claims they have seen in no other car, or even any product ... outside of a satellite.
This might sound like hand waving and marketing, but one metric that supports this is the cars products per square foot of factory per hour. Tesla is way ahead. It's also supported by high profit margins, even when compared to companies that have as high or higher prices.
So yes I'd say that the gigapress is a key part of reducing the part count, assembly time, and number of robots required to build a car. The result is a Tesla factory builds more cars than the competitions factory of the same size.
Disclaimer: I respect Tesla's manufacturing prowess, I despise the self driving claims, and think the vehicles are hideous.
Agreed on the self driving. Not a big fan of the Tesla look, but after living with one I'm a fan. Then again I've had some ugly cars, early Acura GSR (with the tiny headlights), early Subaru WRX, and early Forester Turbo. None would win any beauty contests. Model 3 generally seems like the look is determined by a wind tunnel. At least the model S (at least in some trims) is pleasantly curvy and has some style.
> Most cars have an extremely complex set of CPUs, sensors, and control distributed all around the car. Chips in doors for locks/windows, a separate system for ABS (usually from bosche), networks of temperature/pressure/movement sensors, torque controls/monitoring for window motors, windshield wipers, airflow motors, etc. In the model 3 it's largely integrated into a single board
yeahnah, thats deffo not true.
tesla has a similar number of sensors, actuators and other junk. It even has an ABS pump too. How do they think they measure torque if there aren't any torque sensors?
Having everything wired directly to a single board makes the wireloom really really unwieldy. Telsa use the same automotive busses everyone else does. (it probably uses ALL THE BUSSES, because why not.)
the reason the reason tesla make a profit is that they've been value engineering the same three cars for close to ten years. however, they have only been making a profit since 2020.
The other key is producing a car to a standard of something retailing for less than half the price. The top end Kia EV 4 feels much more "posh" than a model y, which is much more expensive. The killer feature of the EV 4 is that its waterproof.
That's why I wrote "Thanks in part to..."
It'll be interesting to see how it all settles out compared to the legacy manufacturing style of subbing out components. Some people will pay extra for Recaros (me!) but a lot of people couldn't care less.
They are one of the biggest reasons i drive tesla instead of the etron.