On the morning of May 16th, it was reported that Tesla’s new car assembly process, which was released in March, immediately caused a sensation and sparked a debate among automotive manufacturing experts. This is regarding whether Tesla CEO Elon Musk’s so-called “unboxed process” is too radical.
Elon Musk believes that Tesla needs to fundamentally rethink the traditional way of producing cars in order to produce more affordable electric cars while achieving higher profits.
Tesla is currently the world’s most valuable car manufacturer. Investors have been waiting for the company to release an electric car priced below $30,000, which is considered the “holy grail” of Tesla’s product line. Currently, the cheapest Tesla model starts at over $40,000. The “box-opening process” is aimed at achieving this price target.
An expert believes that this new production process is “revolutionary” and could disrupt the traditional assembly line in the automotive industry. However, some people question whether the process will significantly reduce production costs if it relies only on previously tested technologies, such as modular assembly.
Tesla unveiled this new process at its Investor Day event on March 1. Tesla executives said at the time that this will help the company’s next-generation models become “simpler and cheaper”.
They also said that the “box-opening process” could cut production costs in half and reduce factory floor space by 40%. Tesla’s ultimate goal is to “produce more cars at lower costs.”
The new technology-based production line will not be fully tested until the end of 2024 at Tesla’s new factory in Monterrey, Mexico. The investment in this factory is $5 billion, and Tesla plans to produce a new generation of electric cars priced below $30,000.
There are several major questions surrounding this new process: What impact will Tesla’s new process have on the entire automotive industry? Will this make Toyota’s widely imitated production system useless? Can Musk make this new process run smoothly as expected given Tesla’s history of delays and failures in deploying new technologies? Tesla has not responded to these questions.
Consulting firm Berylls focuses on the rapid transformation of the automotive industry towards electrification and intelligence. Martin French, the company’s Managing Director, is monitoring whether Tesla’s new process can replace Toyota’s decades-old lean manufacturing method. He said, “When I saw Tesla’s presentation, my feeling was that the Toyota Production System manual was thrown up in the air and then shot down by machine guns.”
Jan-Philipp Büchler, a researcher at the Free University of Dortmund in Germany, believes that Tesla’s new process is “revolutionary.” “This is not just modular production. The new process eliminates the standard steps of the past, creates new work patterns, increases speed, and reduces complexity.”
Tesla is still testing various aspects of the new process, including car front and rear modules based on single-piece casting, which will be connected to a central structural battery pack. Body panels will be painted separately and then connected together in the final assembly process.
Some manufacturing experts believe that the “box-opening process” could reduce or eliminate common steps in car factories, such as stamping, welding, and painting unfinished bodies before sending them to long assembly lines for installation of seats, engines and other components.
If everything goes according to plan, the “box-opening process” could rewrite the standard practices of the automotive industry. However, Tesla has not always been able to achieve such lofty goals, such as the CyberTruck model being delayed several times and the FSD software problem not being resolved.
Lean production experts like James Womack and Hide Oba have seen the key differences between Toyota’s production system and Tesla’s proposed innovations.
As a professor at MIT, Womack co-authored “The Machine That Changed the World” in 1990, analyzing Toyota’s lean production concept and method. He said that the core of Tesla’s new approach is an “assembly process,” while Toyota has developed a more comprehensive “production management system” that can help car manufacturers run assembly lines and other work more efficiently.
Independent lean production consultant Oba worked at Toyota’s Production System Support Center, which helped Toyota’s suppliers and other companies implement the Toyota Production System. He said that “the big risk of the ‘box-opening process’ is that it may become rigid.” He believes that Tesla’s process “will not work unless these large, complex box modules are produced in sync and all these modules are sent to the final assembly line on time.”
Another issue is whether Tesla can use the “box-opening process” to produce multiple car models of different sizes and bodies on the same production line. Oba said, “I guess that’s almost impossible.” This is because Tesla has split cars into very few large modules in a very aggressive way, and the size of these modules does not support customized production.
He said, “This may drag down the company’s overall efficiency, as Tesla’s product line may become more diverse and complex in the future.”
