The development of electric cars is important especially because it’s environmentally friendly. Nowadays, we can feel the change in our environment called “Climate Change”, additionally, air pollution keeps spreading. Somehow these electric cars will help lessen the air pollution that will give a better health of our environment for the next generation.
Electric cars are advisable for people to have; however, many have the unwillingness to buy it without better incentives.
How Tesla Revolutionized the Electric Cars Market?
Tesla has revolutionized the automobile industry with their electric powered luxurious and fast paced cars. The company was founded in 2003 and created a special interest and excitement around electric cars in the whole world. The product line of the company includes battery powered cars along with storage and green energy generation products. The company launched their first product the Roadster in 2008. We have chosen Tesla for the purpose of the paper and will analyze the supply chain to determine the value chain present in it.
Tesla motors have always showed innovation in every process of their business. One of the most crucial aspects is that the company owns most of its value chain which helps them market unique products at reduced costs and greater accuracy. The innovative approach is evident in the product design of the company which has come up with sophisticated and beautiful electric cars in the market. The company employs top software engineers and car designers in its product development team who work on a collaborative design approach to market their cars. The company uses DS software solution from the beginning of its operation and currently working on the version 6 PLM as the single platform for product development.
The software can work with complexities in their process and product and brings multiple organizations under a single software solution for seamless workflow and management. The version 6 of the solution is also able to squash data boundaries, quicken lead times and reduce the expenses of development for their upcoming cars. Designers use various tools such as Solidworks to design the Roadster model. The team then shifted to CATIA for 3D modeling and ICEM Shape Design for Class A surfaces. The company also changed it data management system and integrated it in version 6 of the software solution.
Currently Tesla utilizes sustainable methods to develop its products with 3D digitization along with visualization ending with virtualization. The whole process enables Tesla to develop their ideas faster and cut down on wastage. The collaborative version 6 enables them to account for customer and partner inputs and uses a 3D language to eliminate errors and data transition. The 3D models help them to get their ideas right at the first approach and turn information into action. It also enables them to ensure quality, manufacturability and safety. The single solution also cuts down costs of IT ownership while freeing up resources.
Tesla manufactures its cars in USA and still is able to achieve cost effectiveness even if the labor cost is higher than the usual manufacturing countries in the world. The major factory of Tesla is located in Fremont, California and claims to be the world’s most advanced plant for manufacturing automobiles. The factory is built over an expansive 370-acre land and the factory itself is 5.3 million square feet. The Factory is slated to expand to 10 million square feet in the future years to ramp up the production of their cars. Tesla purchased the facility in 2010 prior to which it was owned by Toyota’s New United Motor Manufacturing, Inc. Tesla carried out various transformations and renovations to increase the value of the facility such as providing skylights for natural light and painted the floors for a cleaner environment.
The company has also provided a gym, cafeteria and health center for the employees. The factory employs massive automated manufacturing systems and heavily utilizes robots in the production line. Many of the elements used in the production line such as drives units and battery modules are also produced in-house by Tesla. The company also invests in employee training to impart new skills and enable the employees to meet the Tesla standards.
The company is looking forward to increasing their production to 500,000 cars in 2018 and also has plans to increase the automation to achieve the target. The company through its production process and use of robots add value to their business and they have been able to scale their manufacturing by 400 percent in the factory.
Tesla also operates other factories in different parts of American which manufacture the different components used in their cars. They have setup a Gigafactory at Sparks, Nevada which handles the manufacturing of the batteries used in the cars. The annual production capacity of the facility is 35 gigawatt-hours which is greater than the world’s battery production capacity. The factory is in the process of development and Tesla has already started operating the finished areas for facilitating their production. The Gigafactory will enable Tesla to take advantage of the economies of scale and reduce the cost of production. The manufacturing process also provides room for innovation and reduces the waste. The lower cost of battery production enables Tesla to provide their cars at affordable rates to the customer. The company plans to open another Gigafactory in China which will increase their volume of production of batteries on a global basis.
The plant in Shanghai will aim to achieve a production scale of 500,000 cars per year. Combined with the production the California factory, Tesla will be able to market 1 million cars each year. The move will make Tesla the major automobile manufacturer in the world as other companies produce around 200,000 to 300,000 cars in a year. China is a favorable place to manufacture the cars as it is the largest auto manufacturer in the word. The factory will also use heavy levels of automation and robots which have always generated value for Tesla.
The future of electric cars is an exciting one. What do you think?