Time to go big or go home
EkaLore has stated its position on Alien Invaders, competitors who seem to come out of nowhere and change all the rules. The US car industry has faced foreign invasions since the later 20th century, but the current EV market situation is different and, in some ways, direr.
Our posts on Tesla as an Alien Invader discussed radical changes coming from EV production and energy market transitions. It’s time to look beyond Tesla’s innovations and head start and to consider how the changes in manufacturing globally are impacting the US, European, and other established vehicle makers.
Vehicle manufacturers, governments, labor, and the global climate are affected by the efficiency of electric vehicle (EV) production. Each element in the transportation sector is affected by the cost efficiency of production. Investment capital (battery supply chains, transportation networks), business models (direct to consumer/business, gig drivers, shared ride), and emitted combustion pollutants (utilities and per-vehicle combustion engines) are all being restructured. Small percentage efficiency changes cause large economic effects.
Tesla (an Alien Invader) has chosen a manufacturing model with a high percentage of onsite vertical integration (from batteries to finishing) in production. A key element has been the design of EVs using many fewer components. Design for automation planned for vehicle production at conception is a second key element. The results speak for themselves.
Published reports and anecdotes say Tesla can produce a car (Model Y) at the new Berlin Gigafactory in 10 hours. VW takes at least three times as long for its new EV (ID.3). For the continuous quality improvement long at root in vehicle manufacturing, VW has been improving productivity by 5% per year. This is inadequate to catch Tesla. Tesla is planning further new vehicles aimed at the core of the most profitable North American market space segments in Pickup/utility vehicles and large trucks.
The article continues tomorrow morning on our LinkedIn feed or at our website www.ekalore.com/blog-1
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