Tesla：Supply Chain Integration at its Best

Today, Tesla's investor day is the one that attracts the most attention from investors. If I had to use one word to describe this conference, it would be "extreme integration".

First up, Musk first showed his Master Plan. The core of the plan is very simple, to let us humans completely get rid of fossil fuels. According to his calculation, to realize this future, only 10 trillion US dollars of investment is needed, while the current investment of the entire world in fossil energy is 14 trillion US dollars in 2022 alone. The investment entails building 240 TWh of energy storage and 30 TWh of renewable energy. Musk emphasized that too many people don't know that the energy on our earth far exceeds the needs of human beings and is enough to support several human civilizations, so the amount is not a problem, and in the plan, there is no resource limit. On the contrary, more than Compared with the damage to the earth caused by digging coal and oil wells now, the damage caused by this future will become very small.

The whole plan involves five aspects, namely electrifying our power grid with solar and wind energy, which will reduce the use of fossil energy by 35%, the general popularization of electric vehicles will reduce by 21%, and convert all heating to heat pumps, which can reduce 22%. %, the overall decarbonization of enterprise production will be reduced by 17%, and finally the electrification of ships and aircraft will be completed by the last 5%. Specifically, how much energy storage capacity is required for each part, and how much investment is required, Musk has mentioned it, so I won’t go into details here. Let’s focus on the parts related to Tesla itself, and why I say it is the ultimate integration.

The first part is the car. Tesla is the only company among all car companies that allows all departments such as design, engineering, and manufacturing to sit together for discussions. When the Model S was first produced, the company first designed it and then manufactured it, which made the design no consideration of manufacturing cost. Although Tesla has been innovating and reducing costs since then, if it can be manufactured at the beginning, If engineering and other costs are considered in the design, the final cost can be saved a lot. So the company's new generation of car platform will take all these into consideration, not only that, but also completely change the way the entire car is made. Tesla uses animations to show how cars are manufactured today. There are many steps of dismantling and reassembling. Among them, the most interesting thing is that the company first puts together the main structure of the entire car, uniformly paints it, and then disassembles it. Open, and then install chair upholstery etc. inside. And Tesla intends to only need to assemble it once in the future. How to do it? Modularization, paint all the exposed parts first, then install each module first, and finally put them all together. For example, the chassis and battery pack are the bottom of the car, and chairs should be placed on it. By the time the chassis was put in, the chair was already assembled. The advantage of doing this is that the area occupied by the module of the unit is small, so the moving distance of people is reduced, the assembly can be completed quickly, and the factory area required in the future will also be reduced.

Then there is the power part. After the company's continuous efforts, the powertrain of Tesla Model 3 is lighter, smaller and cheaper. So why can these characteristics be realized? Because the company has never completely relied on the off-the-shelf products of suppliers, it will either develop itself or sit down with suppliers to design together. The president in charge of the powertrain said that we have integrated what originally required four chips into one , without sacrificing any performance, which is why Tesla is getting cheaper and cheaper while maintaining acceleration and range. He also mentioned that in order to complete other projects, such as the manufacture of powertrains, the company has also developed its own software to complete production more reliably and accurately. Because of this, the size of the manufacturing platform for new powertrains will be reduced by 50%. , can be used with any battery chemistry combination, and most critically, the entire cost should be around $1,000. According to the estimate of Inside EV, the current powertrain accounts for 50% of the overall cost.

In terms of software, Tesla is also constantly optimizing the lines in the car, and at the same time intends to implement the Internet of Things in the car to some extent. Under normal circumstances, if there is a problem with the car, it may be checked one by one, but the person in charge of the software said that after the integration, many problems will be clear at a glance. This will be used in two aspects. One is production. Every time a new component is installed, the software will run again to test whether the component is correct and whether the installation meets the requirements. Some of them can be optimized through software, but not Immediately notify the people on the production line, which means that problems can be discovered and solved as soon as possible. The second aspect is after-sales service. Tesla can use these software to collect in-car data and predict which parts may need to be replenished, so as to purchase in advance and prepare for inventory. Software also plays a very important role in car damage prevention and safety. Tesla will adjust the vehicle to adapt to road conditions based on the data collected on the software, and will also redesign the vehicle based on real car accident data.

Finally, Tesla also talked about the supply chain and the charging part. It is worth noting that the cooperation model between Tesla and suppliers is very different, more like a general command platform. As mentioned above, they often sit down with suppliers to discuss the requirements for new parts. Tesla In fact, the engineering team has already prepared the drawings and has some ideas about the materials. Sometimes they will chat with suppliers for several months until the production line is built and mass production starts. This kind of cooperation mode will be very in-depth, not every A supplier can keep up, so the person in charge said that we have been selecting, and the number of suppliers will continue to decline.

Today’s decline in Tesla’s stock price is more of a manifestation of Sell the news, because there were many rumors before the meeting that the next-generation new car will be released today, but it was not shown in the end, which inevitably disappointed many investors , Therefore, this 5% drop after hours is also understandable in my opinion.

But from a long-term perspective, Tesla has fully demonstrated their ambitions this time, moving towards the ultimate integration and the ultimate scale. Tesla's ability to innovate is something that most companies do not have. To borrow Buffett's words, choosing such a company is reassuring