Automotive Engineering - April 2023 - 10

TECHNOLOGY REPORT
MANUFACTURING
Tesla reveals new cost-cutting, manufacturing strategies, but no Model 2
Tesla's 2023 Investor Day on March 1 at the company's Austin,
Texas, Gigafactory was short on new-product announcements
but long on how the EV automaker will continue to refine its vehicles,
manufacturing, and processes to maximize profits and
growth. While anticipation was high for Tesla to unveil a new
vehicle to its aging lineup - and provide a definite showroom
date for its Cybertruck - multiple presenters on stage at the
event each discussed aspects of the company's " Master Plan 3. "
But to the disappointment of Tesla enthusiasts and some
financial analysts, the company didn't discuss its next model
beyond describing it as " next-generation vehicle. " While Tesla
design chief Franz von Holzhausen said the long-awaited
Cybertruck would be " coming this year, " Musk was mum at
the event about the anticipated, low-cost Model 2.
When pressed for details about on the next-generation vehicle,
Musk he responded curtly, " We will decline that question. "
The overarching theme of Master Plan 3 is the company's
focus on providing a " sustainable energy solution, " CEO Elon
Musk said at the beginning of the nearly three-hour presentation.
" We'll move to a sustainable-energy economy and do it
on our lifetime, " he asserted.
Cost savings = more-affordable EVs
Almost every executive who spoke during the presentation
stressed continuous cost reductions as the reason for the
company's profitability. Operating expenses as a percentage
of revenue dropped from 17.7% to 6.6% from 2018 to 2022,
while the cost of building the Model 3 was slashed by 30% in
the same period, the company said.
The savings are designed to help Tesla reach its goal to sell
20 million vehicles annually and also enable it to produce lower-cost
EVs. Musk said Tesla could achieve its sales target with
a maximum of 10 models. Tesla currently sells only four models.
Process, manufacturing improvements
Tesla executives pointed to vertical integration, product and
process innovation and efficiencies in areas from engineering
Although many expected Tesla's 2023 Investor Day to hinge on newmodel
announcements, Tesla gave little detail about expansion of its
aging model range. Shown is a prototype of the proposed Cybertruck.
and manufacturing to software and in-house support services
as not only driving profits but allowing the company to improve
vehicles and lower their costs. Going forward, the company
said it plans to slash manufacturing costs by 50% (compared
to today's Model 3 and Model y) while simultaneously
reducing the required manufacturing footprint by 40%.
Chief engineer Lars Moravy, formerly a suspension design
engineer at Honda R&D, revealed a production process that
will be used for future Tesla EVs. The process, known as " unboxed, "
lowers costs by streamlining vehicle manufacturing
- and therefore shrinking build time - by modularizing major
sub-assemblies. Moravy called the traditional assembly-line
method inefficient and " a silly way to build a car. "
" We take all these sub-assemblies and build all the sides
of the cars independently, then assemble the parts of the car
once - and only once, " Moravy said. " The interior is attached
from bottom-up or top-down, so there's more access
for robots or people. We aren't
moving heavy objects around, so
we're doing more work on the car
more of the time. "
During the Q&A portion of the
Tesla didn't reveal much of its " next-generation " car beyond using it as an example of the company's
systematic reduction of electronic systems cost and complexity.
10 April 2023
presentation - where Musk was
joined on a crowded stage by the 17
other Investor Day presenters that
some saw as a demonstration of
the company's decentralized leadership
- the CEO confirmed that
Tesla's next vehicle assembly plant
will be built in Mexico near
Monterrey; Mexican officials were
on hand at the event.
Doug Newcomb
AUTOMOTIVE ENGINEERING
BOTH IMAGES: TESLA

Automotive Engineering - April 2023

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