Tesla Manufacturing and Innovation Advantage

Tesla has vastly superior engineering talent and business and engineering processes. Tesla has the lead with drivetrain, battery and control systems and aerodynamics and materials. Tesla has about 70% of the US EV market and 20% of the global EV market. This market share is even more dominant when only EVs in the same price range and segment are considered. A $4000 mini EV is not in the same market as a $50000 Tesla. Tesla will enter all major car segments. Tesla will likely carve out 50-70% market share in segments it enters.

The Toyota Production System was the best in class the auto industry for decades. Toyota has kept a manufacturing advantage over other car companies for over two decades.

If the Android software was not created then Apple would have 70+% of the smartphone market. There is no Android equivalent for Tesla competitors.

Tesla has an Agile process and Agile hardware and sofware company. This enables Tesla to safely make 27 major changes to the factory production and car designs every week. Tesla has full automated testing for every car.

Toyota is sending its next CEO into a separate subidiary so he can learn Agile processes and management in a company that leverages Agile methods. This will be a seven year process.

Tesla innovations enable them to have 30-100% more core efficiency with their cars and to have 30% operating margins. Tesla gets 30-100% more range for same size battery pack with range adjusted for car weight. Competitors are losing money on each electric car that they make. A few Chinese EV makers are barely profitable. Legacy carmakers use EVs for credits to avoid penalties selling profitable SUVs and Trucks. Tesla will start making cybertrucks and CyberSUVs.

Tesla will compete in all categories of cars. Tesla will keep and grow its dominance and they will suck all the profits from competitors like Apple does.

40 thoughts on “Tesla Manufacturing and Innovation Advantage”

  1. If I was Musk I'd ask any halfway decent old guard auto manufactuer to manufacture the shell of the car.

    Youtube teardowns I have seen of Tesla's are far from complimentary to build quality – as such a tech focused company it stands to reason that they concentrate on batteries, drivetrains, inverters etc to near exclusion of the physical shell it is all housed in, but that is far from any good long term strategy.

    The pivot to this gigapress technology shows just how far Tesla are beyond their contemporaries in the business on manufacture of this basic car part – it's basically a hail mary pass because those other companies don't have any problem churning these parts out efficiently as they have decades of experience in doing so.

    Musk should stop looking at new tech and look to acquiring something older if only to suck it dry of usable experience and dump it.

  2. Tesla has vastly superior engineering talent and business and engineering processes.

    No they don't. They came in next to last in CR reliability last year.
    They have very clever engineers but don't have good manufacturing. Look at Sandy Munro's videos.

    What Tesla does very well is constantly innovate and move fast. But that means replacement supply chain can be a nightmare due to part count.
    They also innovate and move fast because they are still learning–more testing and more experience would have avoided some of the problems in the first place.

    Tesla's biggest strength is the apparent lack of bureaucracy in management.

  3. With over provision with solar energy converters (photovoltaics, wind, water) people emancipate for their own energy demand (locally and decentralized, none to rely on for short term and ability for bridging several days directly, e.g. on a cars battery) and substituting what's missing by liquid (sun) fuels from high energy season.
    H refill takes load from the electricity grid on high demand times or highest prices densifications (and gives customers useful flexibility options).
    H on high demand times is an organizing difficulty towards flexibility options, electricity with high peak power for many places will get a cost problem (on todays infrastructure resources for liquid fuels and electricity infrastructure being more immobile than fuel)?

    No one to pay for remote infrastructure, but own devices or maybe for sun fuels (based on LoHC's)? Next generation grows up being used to human made additional irradiation then and trusts governmental or institutional big structures, because of never been disappointed?
    (With vulcanos and meteorites: methane, coal, oil and nuclear or if suitable geothermal and water movement are backup)
    Why trust "big" structures, from this point of view?

    (thanks for the above hints on units)

  4. Pretty sure "l" is now "L", for litre, to avoid confusion with "1". All the others remain the same. Caps if lc used already, or named for person. All HVs use some batteries, as you say they could be directly charged from grid. The H gas stations need to be built, after the larger H uses create the supply. This H will come from the excess of intermittent sources or very cheap Space, so is using *free* energy, power beamed perhaps. Grids cannot do this alone, and their size is already a problem (too big to be affordable, too small to go far enuf). This H refill will be faster than grid recharge, and far faster for larger amounts.

  5. Combinations enhance advantages for H and batteries, if known technology would be integrated for H being range extender and batteries seen for efficient direct storage of cheap over supply from electricity grids. Thinking about LHC is no new approach, but probably better concept for range extension backup or weather related rescue equipment, with 10l (on todays knowledge, ~1.3kwh/l for C14H13N) fuel bucket and 10-15kg 10-20kW fuel cell module added by demand (and/or for rent, because of standardized connectors)? Refilled from seasonal storage by grid optimization for electrolysis capacities.
    What's the cost for that ('mobile' mesh/grid) 'parking heater' gadget, if produced on large scale?

  6. All advantages are temporary. Technology is the "Red Queens Race". Must run as fast as you can just to stay in the same place.

  7. I believe Elon said that the shell of the batteries will contribute to transferring sheer forces between top and bottom of the pack, making it stiffer, so that the pack can be used as a structural element. So it's a "structural battery PACK", but the cells would contribute structurally, so "structural battery" isn't technically wrong.

  8. The website for the company didn't give more detail than you did in an easy to find spot. My initial suspicion is that it is hype & vaporware.

  9. Do you know of some breakthrough in storing hydrogen compactly enough for a vehicle fuel tank that I missed?

    Yeah, that one from Plasma Kinetics is supposed to be super great. The hydrogen is absorbed into some kind of substrate which is easily released in controlled conditions. Solid state hydrogen sponge, no need for all the pressure or cooling, apparently affordable to make and recharge (or so they say), etc.

    Still, hard to compete with the logic of "charge it at home". Electric vehicles have a major infrastructure advantage.

  10. This is from ISS projects as featured on NASA TV. Turbine was an experiment to mix alloy possible only in micr0g, for use on Earth. Here is the logic: Apply O'Neill question to things that need micr0g, and answer is clear. ALL of that heavy industry MUST be created in orbit. The rest will then be easy, as the infrastructure will already be bootstrapped there, starting with Space Solar.

    And, paradoxically, O2 is a waste product of metal production. Other than energy, vacuum, cold or space, the freest thing there is in Space.

    As a side note, the internet has allowed people to find and use the old casting and stamping *molds* to make and sell worldwide the orig car parts, I hear.

  11. That is only partially correct. It is not true that "Agile always loses to waterfall (and other classical approaches)". There are many projects for which Agile is a better approach.

    Why am I certain? I have managed SW development (hands on, even as VP, participating in Architecture, Design, etc) for the last 30 years, in many world-class teams, including top companies, such as AT&T/Bell Labs (where our team was the very first team in the world to use C++ in a large project… B. Stroustrup used to go to our lab and we developed the first project at Bell Labs / AT&T that used commercial off-the-shelf fault tolerant HW for a Telecom Project and that used system SW written in a language other than C …) and continuing with several teams in Silicon Valley and elsewhere and with top talent from all over the world.

    And I can tell you with full certainty that there are different approaches that are the best fit (agile, waterfall, etc) for particular projects and particular teams. The key thing is to have management talent with the deep knowledge that allows them to select what is best for the particular situation (project + team)

  12. I would think the turbine thing is about servicing space craft in space if the necessity calls for it.

    3D printers have always been a potential goldmine for auto dealers because eventually the manufacturers just stop making the parts for older models – yet if you have the part in a CAD/3D file you can just fire it up in a 3D printer.

    (obviously I know it isn't that simple with metal parts currently, but it could be in the future)

    It would take a very long time before the necessary infrastructure to move heavy industry to orbit exists – anything that requires heavy amounts of oxygen would be out, we need that for any humans up in space.

  13. Thanx for energy! The nanotube fiber, NASA has it, is for strength/lightness of COPVs, not exotic storage in them chemically. I would look to the Magnesium paste or Ammonia for such things too. Yes, home fuel cells work, even on the way to the Moon. Long ago. Make and use H2. Gas up the ol' automobile. Microgrid stuff! And, once again, current pipeline cos already can mix in and then sep out H2 from natgas in existing lines. You are arguing that existing tech cannot be possible.

  14. "It is not just that Tesla is very, very good, it is that old car companies are very, very bad."

    There's more to this though than just the tech which seems to be the only thing Musk ever wants to talk about with EV's.

    Going by the last teardown of a Tesla I saw on Youtube the precise opposite is true when it comes to actual build quality of their cars which is at least as important as initial price and range in the long term for TCO.

    They focus on the tech so much that they seem to have all but excluded actual physical manufacturing design of the basic metal car parts that all of that tech is built around.

    If they had acquired a company with actual experience in mass manufacturing quality vehicles then they wouldn't need that flashy gigapress which reeks of a desperate PR maneuver to mask their basic lack of capability in vehicle metalwork that the old guard of auto manufacturers perfected into a fine art over decades.

    Whether it uses battery electric or internal combustion the basic metalwork of the vehicles still needs to be well made on the production line, or they will be doomed to years of expensive maintenance once their warranty ends.

  15. Drake is correct. This comes from my experience being part and running world-class teams and creating several best-in-the-world type of products. As well as knowing several of the initial Tesla Engineers (some of which worked with me in some projects).

    There are many, many, really talented people in the world. If you have the funds and the correct perspective and management, it is very possible to create a team and compete with anybody. The problem is, in most cases, management. Which is run by MBA's or folks that are just business people, in an industry which is mostly about technology. The old idea that all businesses are equal and you just need the fundamentals and that they translate from one type of business to another is totally wrong when it comes to this type of products. And this is why so many fail.

    Tesla benefits from having Musk (which some believe is an uber-engineer, but in reality is not in the very top of talent, the way for example, Gates was). He is, however, so incredibly well rounded (deep talent in many, many areas) that he is way above others.

    So, Tesla does have at the moment a superior talent, but other companies can create similar or even superior teams. They just lack the correct management to be able to do so.

  16. Ugh, dear god don't use that term.

    It's not a structural battery despite what they say to try and butter it up.

    Structural battery means the battery cell(s) is literally part of the structural material used, and the Tesla thing aint it.

    All the Tesla 'Structural' battery does is build the battery pack nice and flat as part of the undercarriage of the vehicle, rather than as a squat block in the trunk and/or under the hood.

    I would be very surprised if it adds any significant level of structural support to an EV at all.

    At best what it does is better distribute the center of gravity for an EV so that it isn't all concentrated on a bunched up block or 2.

    Actual structural battery designs do in fact exist – one such design is supposedly in development with the equivalent strength of aluminium metal and equivalent about 70% the volumetric energy density of Li ion, so that should be a nice little improvement to many EV's when it rolls around

  17. I do Dan, but I can also think.

    Nanotubes for hydrogen storage is not yet a viable technology for cars. Energy density too low (a few percent per weight at most) and cost to high as well.

    Charge your "tank" with hydrogen at home? Zero chance. So "gas stations" it is, but for hydrogen.

    Tanker trucks would require another level of storage. Please note that most systems with carbon nanotubes require heat for the nanotubes to relinquish the hydrogen and it's not an instantaneous process. That is, not suitable when you have to "dump" the tanker hydrogen in the gas station within..say.. a couple of hours at most.

    Likewise, building a system of individual pipelines for hydrogen transport to every "gas station" would be costly. And, would pose a hazard, since hydrogen is so flamable.

  18. I was specifically mentioning O'Neill/Bezos plans to move heavy industry to Space. Nothing to do with Tesla? What about the turbine parts already being made in ISS micr0g that cannot be made on Earth? Car parts? Wake up!!!

  19. NASA nanotubes for tanks, known need for *gas* stations, or do you even read what was being responded to? Pipeline cos have already demonstrated ability to mix and unmix H in lines. They want the business. The energy from intermittent/Space sources is free, when it is in excess. H can store it at that time. Inefficient use of free energy is a potential winner. That takes care of all of your points. Again.

  20. You don't get it do, you? This article was about Tesla and had *nothing* to do with neither SpaceX nor space in general.

  21. Well.. Hydrogen has lots of dissadvantages. Round-trip efficieny about 50% – fuel cost at best twice as expensive compared to pure EV. Probably significantly more than twice as expensive.

    As you mention lacking technology for good "tanks" in the cars and, above all, lacking infrastructure for tanking cars. Transporting hydrogen to gas station cannot be done with pipelines, and trucks loaded with either liquid or compressed hydrogen both constitute a major hazard.

    Hydrogen is simply not competitive with batteries in the car market. Not by a long shot.

    For airplanes and ships.. I don't know. May or may not be long term competitive.

  22. "orbital colonies" would be Island 3, I suppose. O'Neill used them as a popular hope supply, but they were not the first thing to do! Space Solar was, and is (interested in global weirding solution?), using micr0g and non launched resources. People as needed, O'Neill sez 10,00 in a Bernal Sphere, Island 1. Criswell sez under 1,000. DO IT!

    I specifically said Musk has no interest in "Space", orbit to be clear. He does not like Space Solar, also specifically. Most think other "planets" when you say Space. Galileo and O'Neill say different. We are correct. Show me one thing SpaceX has planned that is not centered on Mars? Planet chauvinism is appropriately and exquisitely named by Azimov because it is chauvinistic, unaware of its own assumptions, yet imputing them to others.

  23. Remember, Android is the similar example, out of nowhere. There are many things that H is clearly better for, yet nothing batteries alone are. Bats can always be recharged with H cells and work as well. In fact, much of what I say relies on the fact that HV is just a BV with an added continuous recharger. Home fuel cells will work both ways, just like (almost as fast as) batteries. Existing Australian company does this. Battery recharge takes more active grid energy the faster it gets. H builds up over time and is then very quickly pumped. As H for other uses is made, from intermittent and Space Solar, it will seep into cars.

    As a more Physics sort of thing, the "pure electric" version of what we are talking about would be the capacitor, similar to battery or fuel cell in that it has electrodes, not a thermal turbine making electricity. Put a chemical paste in there for a normal battery, no longer pure electric. Flow the paste or liquid thru instead of recharging in place and you have a flow battery. Bring in O2 and you have a fuel cell. All the same, sort of. Flow battery and fuel cell have far less electrode area, can store energy in a tank, and run it thru a pipe.

  24. Dan, I read High Frontier back when it was still a relatively new book in the early 80s. Big fan, but it is not the be all end all, and to say "Musk has no interest in Space" simply because he is not a fan of orbital colonies kinda stretches it a tad… Remember that little rocket company called Space X?

  25. Good, well thought out answer, but the reason I really doubt that H will ever become mainstream is momentum. Battery tech and recharging times are getting the lion share of research and real world implementation. There are advantages of H over pure electric, but that is not where things are heading. Also, electric does have advantages over H like in home charging – a huge advantage over H. This is much like VHS vs Betamax but in this case pure electric is much further ahead in acceptance and is well ahead in the game.

  26. Yes. I believe it. Tesla adapted to the shortage in chips and grew deliveries by 87%. Legacy car companies down 10-50% in many quarters and still likely down 5-10% in 2022. This comes from staying on top of the supply chain, having vertical integration instead of just having contracts with suppliers and assembling parts. It also comes from having software teams able to write new firmware in 2 weeks to onboard new chip supply. They have built over-the-air software and firmware updates for each car and they have built complete non-destructive tests for each car. Tesla had over-the-air updates in 2012. It is not just that Tesla is very, very good, it is that old car companies are very, very bad.


  27. Generally, the H for cars is compressed, not liquified. NASA has true nanotube fiber that will make tanks even lighter. There is the Magnesium paste. All sorts of plans with Ammonia. There are liquid plans for planes that also cool the electronics, Airbus, and large trucks, where the boil off is all going to be used. The need is for H *gas* stations to quickly refuel, so the tanks don't need to hold so much. As for vehicle plans, Krafft Ehricke's design for Centaur second stage may work eventually. The current situation with H is that free energy is avail from intermittent sources, when the intermittent means *more*, for a while. Loss of this free energy making H is less of a problem than one would think, as no C cycle is involved. Throw in power beaming of this energy and looks good to me. Compared to batteries for everything, the hammer Musk has. Fuel cells and batteries are quite similar. I think Musk will have to add H to be a *big* car company.

  28. Tesla has vastly superior engineering talent and business and engineering processes.

    You dont actually believe that? It only takes money to rent competent people, everyone has that. Don't mistake first mover advantage for some kind of prophetic destiny. There are no special people, knowledge nor processes at work here.

  29. They are not perfect. Like Musk forcing the yoke steering wheel because he likes it and giving the consumer no option.

  30. Agile development is not so good. This idea has come up in software several times under many names. It always loses to the classical waterfall/hierarchical/pyramid system.

    100 Developers do not make a single Von Braun. And he was single!

  31. Musk has no interest in Space, thinks orbit is stupid, can't figure out why anyone would want to go there. O'Neill, however, understands.

  32. Hammer looks for nail. "There is no Android equivalent for Tesla competitors." Except H, the future, to recharge the bats as they go down. Musk calls them "fool cells".

  33. As batteries become cheaper, the advantage in the table will become less important, i.e. the range/weight/kWh number.

    Of course, Teslas advantage in this metric allows them to use LFP batteries and still have a decent range, which in turn gives them a huge cost advantage (LFP's are cheaper per kWh) over their competitors. And, Tesla has other manufacturing advantages that are separate from the range/weigt/kWh metric. I expect Teslas lead manufacturing efficiency to increase rapidly as the production of 4680 batteries ramp up and as the structural battery is introduced.

  34. It's not a bad idea, but if falls on two insurmountable stumbling blocks:
    (1) GM would never be as smart and as pragmatical to ask for help
    (2) Tesla does not do consulting work; all their engineers are 100% busy making their own production equipment and cars

  35. If I was GM, I would be having Tesla manufacture a line of EV's for me. At least then, they would have a better product that would not lose as much money. And, they could use the sales as offsets that would allow them to sell more Yukons and Escalades.

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