Tesla says production innovation to cut auto costs by half
DETROIT (AP) — Tesla says it will use innovative manufacturing techniques and smaller factories to cut the cost of its next generation of vehicles by as much as half of the ones it now builds.
CEO Elon Musk and other executives outlined the goals during a lengthy investor day presentation at Tesla's Austin, Texas, headquarters Wednesday.
The changes could bring the cost of a new generation of vehicles to around $25,000, although it didn't appear that the new vehicle would be introduced during the presentation.
Franz Von Holzhausen, Tesla's design chief, said the company has to make another sharp reduction in costs in order to reach its ambitious electric-vehicle production targets.
The company, he said, will build the cars in smaller modular units, then bring those units together. The system uses less space. Executives said as a result, its next electric powertrain factory will be half the size of the one Tesla just built in Austin, costing 65% less.
"That also means we can build more factories at the same time," said Tom Zhu, who leads Tesla manufacturing.
Executives said Tesla is unique from other automakers because all of the people involved in vehicle design and manufacturing are in the same room. The company also designs and makes many of its parts and software while others rely on tiers of parts supply companies.