American electric car manufacturer Tesla is set to revolutionize the automobile industry by ditching the traditional assembly line method of car production. Instead, they plan to build different parts of a car simultaneously in specific spaces and then combine them. This innovative approach could reduce Tesla’s manufacturing footprint by more than 40 percent and lead to faster and cheaper construction of future factories.
CEO Elon Musk has described this new system as “revolutionary” and more advanced than any other production system in the world. While this change in production process could potentially cut production costs in half, analysts caution that it is unproven and may come with inefficiencies and risks. A recent analysis by Bloomberg suggested that the new modular manufacturing process might only reduce costs by a third, not half as Tesla claims.
Despite this uncertainty, Tesla delivered 1.8 million cars last year and aims to produce 30 million cars by 2030. Achieving this goal will require significantly cheaper cars in their lineup, which is crucial for meeting slowing demand. The success of this new production system could be a game-changer for Tesla’s future growth and profitability.