Norihiko Shirozu and Giulio Piovaccari
AUSTIN, Texas (Reuters) – Tesla (NASDAQ:) has abandoned an ambitious innovation plan for gigacasting, its pioneering manufacturing process, according to two people familiar with the matter, in another sign that the electric vehicle maker is cutting costs amid falling sales and increasing competition.
Tesla is a leader in gigacasting, an advanced technology that uses huge presses with thousands of tons of pressure to injection mold large parts of a car’s underbody. The underbody of a typical car can be made up of hundreds of individual parts.
Last year, when Tesla developed a new platform for small cars, it sought to make the car’s underbody uniform, Reuters reported last September, citing five sources familiar with the automaker’s gigacasting efforts. The long-term goal was to radically simplify production and reduce costs.
But Tesla has since abandoned those efforts, opting to stick with its more proven method of casting a car’s underbody in three parts: two front and rear sections made from gigacast, and a middle section made of aluminum and steel to store the batteries, according to two sources familiar with the company. . cause. It’s essentially the same three-piece method the company used for its last two new models: the Model Y crossover and the Cybertruck pickup.
Tesla’s abandonment of monolithic gigacasting has not previously been reported. The automaker did not respond to a request for comment.
The decision to delay a potential production breakthrough is another example of Tesla cutting short-term costs as it adjusts to falling sales and profitability, weaker demand for electric vehicles worldwide and increased competition from rival electric vehicle makers such as China’s BYD (SZ: ) . Tesla laid off more than 10% of its global workforce last month. Several senior executives also resigned or were fired.
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The moves also reflect a fundamental shift in strategy: Tesla is now focusing more on developing self-driving cars rather than chasing the huge growth in electric vehicle sales that many investors had hoped for.
The cancellation of gigacasting happened last fall, the people said, before Tesla decided in late February to halt development of an all-new affordable car, often called the Model 2, which would have been the first car built from single parts. gigacasting. Reuters first reported the Model 2 cancellation on April 5.
On April 23, posting an earnings report that missed Wall Street’s expectations, Tesla said it had a simpler and faster plan to produce “more affordable” cars after it delayed plans to produce the Model 2, which had been expected , will cost $25,000 and will be released in the second quarter. half of 2025.
Instead, Tesla said the company will produce affordable models using its current platform and production lines. On a call with investors, CEO Elon Musk declined to provide details about the planned new offerings or their target prices.
Tesla has not completely abandoned the small car platform it had planned for the Model 2. Instead, it will move forward with developing a self-driving robotaxi on the same platform, Reuters reported in an April 5 article. One of two sources familiar with the automaker’s gigacasting efforts said the suppliers involved are now adapting Tesla’s three-part process for the next-generation vehicle.
Both sources said the automaker decided last fall to halt work on a more innovative and complex one-piece casting process. The reason for the decision at the time was to speed up development of the now-defunct Model 2 and avoid any costly delays or production problems, two sources said at the time.
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Tesla and Musk said gigacasting helps the automaker cut costs in the long run. But the process requires a large upfront investment and is difficult and time-consuming to perfect, auto experts say.
Auto experts said Tesla’s more conservative approach to gigacasting is not a surprise and partly reflects the difficulties the company has historically had in delivering complex and innovative vehicles on time. The automaker’s experimental Cybertruck arrived last fall at a much higher price than predicted after significant delays to resolve production issues. Tesla is still trying to produce the angular stainless steel pickup at mass market volumes.
Eliminating all-in-one gigacasting would save the company from massive short-term capital investments in manufacturing and design, said Terry Wojchowski, president of US engineering firm Caresoft Global, who has conducted dismantling and engineering analysis of numerous vehicles, including Tesla.
“Would they rather do it all in one big piece? Of course they would do it, but at what cost? – asked Wojchowski.
James Womack, an auto manufacturing expert and former director of research at the Massachusetts Institute of Technology, said Tesla’s move away from gigacasting reflects the company’s struggle last year to launch an all-new $25,000 car to catch up with Chinese electric vehicle makers that already dominate the low-end market. EV segment cost.
But promoting innovative manufacturing technology is unlikely to sell a Tesla car to consumers, Womack said.
“It’s not very interesting from a public and consumer perspective,” Womack said, “and you don’t know whether it’s actually a significant cost savings or not.”
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