Martin Vicha, responsible for looking after investors in Tesla, recently gave a behind the scenes look at the electric car maker from the United States at a closed event. A guest present in the program gave some such information. He explained to BusinessInsidere how Viecha determined the development of manufacturing costs and their importance to the company.
Viecha emphasized the phenomenon that cost per vehicle manufacturing is the most important metric in the coming years as the determining factor in how many cars a company will build and how big it can get. He also commented on the classification of developments at Tesla. For example, in 2017, Tesla cost $84,000 to build, and the cost dropped to $36,000 per vehicle in the final quarters of 2022.
The exciting thing is that almost none of these savings have been achieved through cheaper battery costs. Rather, the savings were achieved through an improved vehicle design, which plays its part in making production as smooth as possible. More important, however, is Tesla’s factory design, which increases the associated efficiencies in the production process.
Choosing the right production site is also important, as the idea continues. There isn’t a good place near Silicon Valley to build Tesla’s first factory car in Fremont, California. Places like Shanghai and Berlin, where Tesla has built factories, are better options. Likewise the factory in Austin, Texas. It is planned that the cost screw will be tightened to further reduce the manufacturing cost.
The Fremont plant accounts for about half of Tesla’s production. As the new facilities produce more cars, they will be able to produce each vehicle for less than $36,000, which should have a positive impact on Tesla’s profitability, Wicha said. Hope is growing for potential Tesla customers, who are sometimes put off by the price.
Asked about the possibility of Tesla building an affordable electric car, Wicha said the company eventually wants to get a more affordable vehicle on the road. If a company wants to become a large-scale automaker, it needs a broad portfolio, and Tesla needs an affordable offering before launching its proprietary robotic taxi service. However, it probably won’t be on the road anytime soon. He justifies this by saying that demand for the Model 3 and Model Y was stronger than expected, reducing the need for new models any time soon.