May 30, 2024


Tesla is giving up on its ambitious plan for a “gigacasting” manufacturing process in another sign the automaker is looking for a new footing as sales fall and competition rises.

So far, the Austin, Texas-based automaker has been an industry leader in gigacasting. This manufacturing technique uses huge presses with thousands of tons of clamping pressure to die-cast large sections of a vehicle’s underbody. Typically, the underbody can consist of hundreds of individual parts. From Reuters:

Last year, as Tesla developed a new small-vehicle platform, it aimed to punch out the underbody in a single piece, Reuters exclusively reported last September, citing five sources familiar with the automaker’s gigacasting operations. The long-term goal was to radically simplify manufacturing and slash costs.

But Tesla has since halted the effort, opting to stick with its more proven method of casting vehicle underbodies in three pieces: two gigacasted front and rear sections and a midsection made of aluminum and steel frames to store batteries, according to the two sources familiar with the matter. That is largely the same three-piece method the company has used for its last two new models, the Model Y crossover SUV and the Cybertruck pickup.

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The decision to hold off on the potential manufacturing breakthrough marks another example of Tesla slashing short-term spending as it adjusts to falling sales and profit margins, softening EV demand globally, and intensifying competition from rival EV makers such as China’s BYD. Tesla last month laid off more than 10% of its global workforce. A handful of senior executives have also resigned or been pushed out.

Such moves also reflect a fundamental strategy shift, with Tesla now focusing more on developing self-driving vehicles than on pushing for huge growth in EV sales volume, which many investors had been counting on.

Sources who spoke with Reuters said Tesla really started to give up on gigacasting last autumn before Tesla decided at the end of this February to scrap development of a more affordable car. It would have been the first Tesla vehicle built using the gigacasting method.

On April 23, as it released earnings that missed Wall Street expectations, Tesla said it had a simpler, faster plan for producing “more affordable” cars after shelving plans for the Model 2, which was expected to cost $25,000 and be released in the second half of 2025.

Instead, Tesla officials said, it would produce affordable models using a current platform and production lines. On an investor call, Chief Executive Elon Musk declined to provide details on the planned new offerings or their target prices.

Musk and the automaker he helms have both said gigacasting helps the automaker reduce costs over the long term. However, it requires a huge up-front investment, and it can be difficult and time-consuming to perfect.

Experts in vehicle manufacturing said Tesla’s more conservative path on gigacasting is no surprise and in part reflects the pains it has experienced historically in launching complex and innovative vehicles on time. The automaker’s highly experimental Cybertruck arrived last autumn at a far higher price than predicted after substantial delays to work through manufacturing issues. Tesla is still struggling to produce the angular, stainless-steel pickup in mass-market volumes.

A version of this article originally appeared on Jalopnik’s The Morning Shift.



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