Tesla, the American electric car maker, is planning to break away from the traditional assembly-line way of manufacturing cars. Instead of building different parts of the car simultaneously in specific spaces and then combining them, Tesla wants to adopt a new approach that could reduce their manufacturing footprint by more than 40 percent and lead to faster and cheaper construction of future factories.
This change in manufacturing process could potentially cut production costs in half, which is key to Tesla’s goal of creating a more affordable electric car to meet slowing demand. CEO Elon Musk called this new system “revolutionary” and more advanced than any other manufacturing system in the world.
However, analysts warn that Tesla’s new system is unproven and could come with inefficiencies and risks. A recent analysis by Bloomberg suggests that the new modular manufacturing process could only reduce costs by a third, not half as claimed by Tesla.
Despite this uncertainty, Tesla shipped 1.8 million cars last year and aims to produce 30 million cars by 2030. Achieving this goal will require significantly cheaper cars in their lineup. The success of this new production system could be a game changer for Tesla’s future growth and profitability.