Tesla – love it or leave it. Tesla’s technology draws in as much controversy as the company’s constantly changing stock price. Regardless, Tesla marches forward in changing the automotive landscape via Electric Vehicle (EV) technology and manufacturing innovation, and they have their eye on various other technologies to advance society into a new era.
Five years ago, how many car manufacturers were seriously considering EV technology? Very few. Tesla pioneered this terrain and they continue to break new ground as time goes on. At this rate, Tesla’s advancement into technology could very well impact the digital transformation space for companies all over the world. Similar to how many software companies have gone from traditional software to the new cloud-based ERP systems, Tesla has evolved the vehicular and energy space by going against the grain in the same fashion.
Here are the top 3 ways that Tesla has Disrupted the tech space within their industry
1. Manufacturing improvements using large scale die casting
Automobiles are made up of thousands of parts, and these parts must be manufactured and assembled to form the vehicle’s frame. This has traditionally been done by employees, or even robots, assembling a conglomeration of pieces (think castings, rivets, welding, bolting, bonding, etc.). This has been the process to build a car for over 50 years.
Tesla, on the other hand, is changing that. They are in the process of patenting some of the largest die casting machines ever built, and these machines are already at work in Tesla’s California production facility. The goal of the machine is to produce a large portion of the car frame in one single piece rather than using various parts. There are multiple technological advantages that Tesla will see with this integration, such as:
- Reduced build time and manufacturing costs
- Less factory space needed for assembly
- Improved product reliability (fewer parts to break or wear out)
- Less factory equipment and tooling costs
- Potential cost savings passed to the consumer
When you think of Elon Musk, you think of a disruptor. He is not afraid to think outside of the box when it comes to manufacturing. Some of his attempts to reinvent the assembly line over the last 15 years have failed, but that never stopped him. While his manufacturing improvements may be designed to benefit his company, he is not afraid to challenge traditional manufacturing processes with fresh ideas. If large-scale die casting proves successful, it will reduce the time and cost for Tesla to produce vehicles enabling them to reduce the MSRP of its vehicles to gain market share and improve its reputation for poor quality in some of its offerings.
2. Tesla’s self-driving technology is significantly ahead of the competition
Tesla is best known for producing cars, but they truly are a technology company with a portfolio ranging from building cars to building rockets. This is evident as they lead the pack in developing new technologies alongside their automobiles and engines. For example, they have pioneered autonomous driving technology which incorporates machine learning and AI to function. This is not only a revenue driver but a key differentiator for Tesla as well. General Motors and other auto companies are seeking out EV technology, but Tesla has positioned themselves as the premier EV producer, despite skeptics and doubters.
Their competition did not take them seriously at first, and the advanced technology that Tesla has integrated into their products wasn’t even on the competition’s radar, to begin with.
Regardless of what the competitors are doing, Musk is determined to one day reach “Level Five”, which is industry-speak for fully functioning and safe self-driving vehicles in the market. While they still have a ways to go to get there, Tesla has what it takes to develop this technology until they reach that level. They also are motivated by the prospective benefits coming their way as a result of this EV technology, such as:
- A distinct advantage to draw new customers to the brand
- Additional post-sale software revenue from software equipped vehicles and over-the-air updates
- Control by owning their own supply chain for hardware and software chips
- Newmarket opportunities – would companies like Uber and Lyft be interested in self-driving vehicles?
- A key feature to navigate the announced, but not yet built, Tesla Semi Truck
3. Battery Innovation
One can’t underestimate the importance of battery technology or “battery chemistry” when talking about the viability and ongoing emergence of electric vehicles. Tesla has introduced multiple battery advancements over the years, both in battery composition, safety, and charging capabilities. Foremost in buyers’ minds is range and longevity. Tesla has pioneered advancements in these areas, but reducing battery cost has taken priority as Tesla attempts to make EVs available and affordable to populations around the world.
One example of their innovative work is the new Tesla Powerpack, a commercial electricity venture in South Australia utilizing battery power to stabilize the region’s commercial power grid. Deemed a success in sustainable energy, it reportedly saved nearly $40 million in its first year. This is just one example of what Tesla can and will do with battery power.
Tesla’s Battery Day took place on 9/22/20, and it gave us a glimpse into Tesla’s evolving battery evolution. Information was announced regarding lower-cost EV batteries, but as only Tesla can do, there were also a few surprises to get everyone excited.
What does Tesla have to do with ERP? With their various endeavors into different products and resources, Tesla’s technology is bound to touch the ERP space in some capacity. Their vision of filling the sky with satellites to provide internet to rural locations could one day be the very internet that Cloud ERP systems operate on. The innovations in solar energy could become the very source of power keeping the lights on, both at our offices and in our homes.
It’s always a good idea to stay up to date on what disrupting companies are doing, as it could very well affect your business’ day to day operations in the future.
Feel free to contact me if you would like to brainstorm how your digital transformation might best be defined for your organization. I’d be happy to be an informal sounding board for you as you continue your transformation journey.