Elon Musk Reveals Secret Of Manufacturing Success Strategy

Elon Musk Reveals Secret Of Manufacturing Success Strategy

Tesla Inc (NASDAQ:TSLA) CEO Elon Musk boasted that he might have overseen the construction of a wider range of manufacturing systems than anyone else. Musk’s comment comes hours after he blamed the movie industry for manufacturing being underappreciated as compared to invention.

What Happened: Responding to a Tesla enthusiast who requested an interview with the CEO on the company’s manufacturing practices, Musk on Friday reflected on the difficulties involved in managing a global supply chain.

“Managing a global supply chain is also very difficult and underrated. Tactics wins battles, but logistics (supply chain) wins wars,” the CEO said.

There’s A Cultural Gap: Musk also noted a significant gap between the number of movies focusing on invention and the number of movies looking at manufacturing. This attention, Musk said, is not proportional to the hardship behind each of the two processes.

“Compared to the insane pain of reaching high-volume, positive-margin production, prototypes are a piece of cake,” Musk wrote in a post on X, formerly Twitter. The CEO responded to a user who noted that despite the large number of movies made on cars, none focus on manufacturing.

Musk agreed, “Many movies exist about a lone inventor in a garage having a eureka moment, but almost none about manufacturing.”

Why It Matters: The EV giant CEO has often discussed how production is way harder than prototypes.

In March 2022, Musk said that making an electric car was relatively simpler for Tesla than scaling production, given that many players, such as General Motors, had tried to make an EV before.

“The extreme difficulty of scaling production of new technology is poorly understood. It’s 1000% to 10,000% harder than making a few prototypes. The machine that makes the machine is vastly harder than the machine itself,” Musk wrote in a September 2020 post on X.

Overhauling Old Ways? As per a report from Bloomberg on Thursday, Tesla is currently attempting to replace the traditional production line with an “unboxed” approach for its new and upcoming cheaper EV expected to be priced around $25,000. If the new process succeeds, the company can cut its costs in half, the report said.

During Tesla’s fourth-quarter earnings call in January, Musk said that both the company’s new-gen EV and its manufacturing system would be “revolutionary.” The CEO, however, did not provide more details. The unboxed approach reportedly aims to assemble vehicle parts simultaneously at dedicated areas and put them all together in the end.

Tesla is also currently attempting to scale up the production of its stainless steel Cybertruck. The company began delivering the vehicle in late November and aims to deliver 250,000 units annually. However, Musk has previously said that this delivery target will not be met in 2024 but in 2025, citing production challenges.

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