Tesla Model Y 1 piece frame from GigaPress

[edyvw]

Can you speak to VW's margins and profitability over the past 10 years? Didn't profits double last year?
Regarding efficiency, VW is a low margin high volume manufacturer. VW states they need to improve mfg efficiency to compete and grow into the next generation of vehicles.
Porsche is the king of high margin low volume auto manufacturing.
Tesla has shown a company can be high margin high volume. That is a key reason the market has rewarded them.

By the way, VW will figure it out. They are at an inflection point, as is the entire industry. And I bet some smart company scoops up ex CEO Diess.

I think comparing Tesla and VW is like comparing apples and oranges, and that is why VW is in turmoil right now. The German understanding of business is not short term and the huge delivery problems in Europe right now that VW experiencing is a consequence of short-term thinking that VW fell into (the diesel gate is actually a consequence of that). VW neglected its core clientele in Europe, and the departure of CEO is a direct consequence of that. Yes, they will figure it out.
Porsche is different. Porsche is a niche product with a niche clientele. That is why Tesla is so profitable as it is a trendy product right now. Frames won't help them long-term, especially since no, it won't be easy to fix them, if at all. But short term, yes, it might increase efficiency. Until the next trendy thing they come up with.

 

[JHZR2]

Sure, in a perfect world. If that casting is off just a hair, though...nothing will ever make it right. Cooling, thermal drift as it happens, a whole lot of stuff is going to play a role. Then of course the purity and effectiveness of the casting process...bubble at a critical juncture? stress risers?

You're right, theoretically it's absolutely amazing! I await the real world results. With Tesla's quality control practices, I have big doubts.

Agree 100%. As much as they want to claim that a super high tech process is wonderful, there still will be variability. Time will only tell if it’s meaningful. Not the first many thousands or even 100k off the press. And certainly not the first year or three in use. That’s nearly irrelevant because even a Yugo can be reliable and drive decently for the first few years.

To me the real question is if the cast part is indeed weldable and repairable, then what is the strength difference when the new section is put into place?

I can see scenarios where the old mantra that a car with substantial body work is never the same, May become even more severe in this scenario.

 

[JeffKeryk]

The ability to withstand crashes and subsequent repairability are good questions. Tesla considered these issues long before deciding to convert to Giga Casting. Regarding consistancy, a single piece is far more uniform than hundreds of pieces assembled with perhaps thousands of welds, both robotic and human. Each single part, each weld are potential points of failure and definitly lower consistancy.

My understanding is, the components surrounding the frame are designed as energy absorbing to protect the vehicle and occupants. The frame itself is far stronger than traditional frames. VW is planning to adopt the Giga Cast model.

 

[JeffKeryk]

Agree 100%. As much as they want to claim that a super high tech process is wonderful, there still will be variability.

Comparing the variablilty of 1 casted part to an assembly containing hundreds of welded, glued, bolted parts is hardly a fair comparison.
Having said that, nothing is perfect. But Tesla did not decide and employ the Giga Casting process overnight.

I would like a real world driving comparison of the early cars vs these cars. I am guessing the cars have increased rigidity.

 

[edyvw]

The ability to withstand crashes and subsequent repairability are good questions. Tesla considered these issues long before deciding to convert to Giga Casting. Regarding consistancy, a single piece is far more uniform than hundreds of pieces assembled with perhaps thousands of welds, both robotic and human. Each single part, each weld are potential points of failure and definitly lower consistancy.

My understanding is, the components surrounding the frame are designed as energy absorbing to protect the vehicle and occupants. The frame itself is far stronger than traditional frames. VW is planning to adopt the Giga Cast model.

Which is irrelevant. It could be chasing short-term profitability before knowing actual strengths and weaknesses. Now, if all manufacturers jumped on that, it would say something, but VW lately is in the serious race toward quick profitability over smaller and continuous but safer profit.

 

[JeffKeryk]

Which is irrelevant. It could be chasing short-term profitability before knowing actual strengths and weaknesses. Now, if all manufacturers jumped on that, it would say something, but VW lately is in the serious race toward quick profitability over smaller and continuous but safer profit.

Maybe... Just a short time ago all manufacturers were declaring Teslas as only for rich CA granola heads; they will be belly up any day now... Trendy.
VW knows they need to increase margins and learn to become software driven.

 

[edyvw]

Maybe... Just a short time ago all manufacturers were declaring Teslas as only for rich CA granola heads; they will be belly up any day now... Trendy.
VW knows they need to increase margins and learn to become software driven.

Hmmm, who said Tesla is not for rich? I don’t see average family owning Tesla, sedan, gas guzzling SUV’s in same garage. That is typical profile of Tesla owner here.
VW doesn’t need to increase margin. Why they need to do that? That is your thinking bcs. you think that makes sense. That is precisely why VW dumped CEO as their European market share is in trouble. I talked two days ago with editor of car magazine I worked for long time ago and that is what he identified as problem. Hyundai etc. gladly filled VW role, while VW chases Tesla business “model.”

 

[UncleDave]

Sure, in a perfect world. If that casting is off just a hair, though...nothing will ever make it right. Cooling, thermal drift as it happens, a whole lot of stuff is going to play a role. Then of course the purity and effectiveness of the casting process...bubble at a critical juncture? stress risers?

You're right, theoretically it's absolutely amazing! I await the real world results. With Tesla's quality control practices, I have big doubts.

If it's off at all you find out when it hits the trim jig and if it is you ditch the part.

 

[JeffKeryk]

Hmmm, who said Tesla is not for rich? I don’t see average family owning Tesla, sedan, gas guzzling SUV’s in same garage. That is typical profile of Tesla owner here.
VW doesn’t need to increase margin. Why they need to do that? That is your thinking bcs. you think that makes sense. That is precisely why VW dumped CEO as their European market share is in trouble. I talked two days ago with editor of car magazine I worked for long time ago and that is what he identified as problem. Hyundai etc. gladly filled VW role, while VW chases Tesla business “model.”

Diess was fired because of his rocky relationship with the powerful German auto union and the problems with the Cariad software.
He was credited with recovering from the dieselgate problem. CEO Diess excelled at setting a strategic direction for VW, but results from operations were poor (including margins) due to many issues, some of which were beyond his control.

I suggest reading this Bloomberg article.
I am not sure why you say, "VW doesn’t need to increase margin." They are in the business of making money and results from operations are key to growth and ongoing success. The latest number as of December 31, 2021 is 5.93%. Tesla and Porsche margins approach 30%.

 

[edyvw]

They are in business of making money. What makes sense in Bay Area doesn’t in Wolfsburg. First mistake any CEO in Germany can do is to have rocky relationship with unions.
I know what Bloomberg writes, they like my work on diesel gate.

 

[JeffKeryk]

They are in business of making money. What makes sense in Bay Area doesn’t in Wolfsburg. First mistake any CEO in Germany can do is to have rocky relationship with unions.
I know what Bloomberg writes, they like my work on diesel gate.

You are so right on German unions. And the auto union is an extra strong one.

 

[edyvw]

You are so right on German unions. And the auto union is an extra strong one.

It is not only that, most German businesses truly believe they are added value. VW wanted to unionize workers in TN in some fashion, but TN told them to take a hike.
Him having rocky relations with unions is indicative of more serious problems. That means he couldn’t navigate German business culture (understand it).

 

[JHZR2]

Tesla has shown a company can be high margin high volume. That is a key reason the market has rewarded them.

That’s because Tesla is still niche, like Porsche. A toy.

When competition really rises in the next few years, those margins will decrease. The majors will also move to tooling like Tesla has.

The question will then be if Tesla can survive on more realistic industrial margins. As time actually proves the cars’ longevity and long term quality, savvy buyers will actually determine if the juice is worth the squeeze.

Comparing the variablilty of 1 casted part to an assembly containing hundreds of welded, glued, bolted parts is hardly a fair comparison.
Having said that, nothing is perfect. But Tesla did not decide and employ the Giga Casting process overnight.

I would like a real world driving comparison of the early cars vs these cars. I am guessing the cars have increased rigidity.

I don’t care if it’s made with bubblegum. The reality is that there will be variability… maybe more, probably much less. As I said in the rest that was cut off in quote, we will see as many, many thousands are made, and the years roll by… and as we learn the actual reality of the repair ability and consistency of any repairs for the long run.

 

[JeffKeryk]

That’s because Tesla is still niche, like Porsche. A toy.

When competition really rises in the next few years, those margins will decrease. The majors will also move to tooling like Tesla has.

The question will then be if Tesla can survive on more realistic industrial margins. As time actually proves the cars’ longevity and long term quality, savvy buyers will actually determine if the juice is worth the squeeze.


I don’t care if it’s made with bubblegum. The reality is that there will be variability… maybe more, probably much less. As I said in the rest that was cut off in quote, we will see as many, many thousands are made, and the years roll by… and as we learn the actual reality of the repair ability and consistency of any repairs for the long run.

Tesla sells a lotta cars to be considered niche. It outsells other luxury cars in most markets. By a lot...
Didn't Tesla out sell BMW in the US by many thousands of cars last year? I think Tesla is the #1 luxury brand in the US this year, by quite a bit. The Model 3 and Model Y even beat Corolla/Civic in some markets.

100% agree other companies are striving to catch up, but there is a problem. Do they have the resources? This why I speak to margins. The higher the GM, the more capital a company retains, which it can then use for other costs. Cash from operations is used for change; how many companies have the profits for development and change over? They are already stretched. The "wait for the big guys to get in" has not done much yet.
Legacy car companies are strapped to existing practices and contracts including dealer sales model and little vertical integration. Disadvantage...
And only Ford seems to be stepping up in chip firmware programming, a huge Tesla advantage. Software is the future; heck it is now.

Please explain "industrial margins". I am very familiar with finance, especially in manufacturing companies and have never heard of that. Typically gross margin and net margin are used as key measurements. Industrial margin is one I am not familiar with.

I struggle with your assessment of variability. Hundreds of assembled parts as compared to 1? From an engineering point of view, I am not sure that figures. As time goes by, good manufacturing companies continually improve processes, which I expect Tesla to do. This will only improve uniformity and performance. The Giga Cast process is an exercise in uniformity, far better than the old process. I apologize for cutting off the rest of your post; I do not mean to change your thoughts.

One has to agree; long term viability of any process, especially a new one, remains to be seen. Certainly Mr. Munro and his team are impressed with the Model Y Giga Casted frame. I would like to see a driver's comparison of old vs new.

All good. I appreciate your point of view.

 

[NismoNVT]

The i4 M50 seems to do both quite well, and it's an excellent first serious offering into this space by BMW. I was extremely impressed with the car, having Tesla performance, but BMW ergonomics, materials selection and fit and finish.

The i4 is a futile exercise in adapting their 3 series ICE architecture to accept an EV with a metric ton of marketing, gimmicks, and eventual sales support. While I might be harsh and say it wont sell, the BMW core demographic might be willing to accept it flaws (this strategy has proven worthy in other ICEV adapted for EV use). The price tag is also insane for what is essential is a 3 series shell and interior. The weight penalty that the architeture suffers from is quite evident in a couple of performance reviews.

I think munro did a review for this vehicle, and they went into some technical details to achieve a more objective take on the shortcoming.

 

[NismoNVT]

Everyone talks about poor Tesla fit and finish. I was worried about it and really checked mine out at delivery. I can't speak for them all but my Tesla Model 3 was delivered with very good fit and finish. And after a year it's till rattle free.

I suspect talk about poor Tesla fit and finish problems is old news.

Thats good to hear. Munro who did a comparo and it seemed the more mature fremont built teslas seemed to have better quality then the Giga casting piece. The issue I guess might be due to the relative new process.

I dont think the Gigacasting process will magically work out the kinks of fit and finish. I do appreciate how nimble Tesla is in recognizing processes that dont work and daring to go in another direction such as the casting process, structural battery pack, and removing vestigial remnants of the ICE platform in search of efficiency.

The issue remains I guess is whether all these process improvements will allow Tesla to extend their margins and finally end the "Tesla cant produce a consisently well built vehicle outside of the software and powertrain".

 

[JeffKeryk]

Thats good to hear. Munro who did a comparo and it seemed the more mature fremont built teslas seemed to have better quality then the Giga casting piece. The issue I guess might be due to the relative new process.

I dont think the Gigacasting process will magically work out the kinks of fit and finish. I do appreciate how nimble Tesla is in recognizing processes that dont work and daring to go in another direction such as the casting process, structural battery pack, and removing vestigial remnants of the ICE platform in search of efficiency.

The issue remains I guess is whether all these process improvements will allow Tesla to extend their margins and finally end the "Tesla cant produce a consisently well built vehicle outside of the software and powertrain".

From a cost standpoint, the Giga Casting process removes hundreds of welding robots from the manufacturing floor. Saves assembly times and line issues. Additionally, the strength by weight for the aluminum castings exceeds high strength steel, so the frame is lighter. This helps the vehicle because EVs are pig heavy. Saving weight allows for a smaller battery/drivetrain to achieve the same performance and range.

 

[NismoNVT]

From a cost standpoint, the Giga Casting process removes hundreds of welding robots from the manufacturing floor. Saves assembly times and line issues. Additionally, the strength by weight for the aluminum castings exceeds high strength steel, so the frame is lighter. This helps the vehicle because EVs are pig heavy. Saving weight allows for a smaller battery/drivetrain to achieve the same performance and range.

Agreed and this 100% will benefit Tesla sustained production costs and improve mfg efficiency. But as I mentioned earlier the benefit at least from the customer side will be next to nothing. Same thing with the 4680, its great for Tesla, and awesome PR buzzwords but nothing really substantial in terms of range, efficiency, and removing some of the remaining fears folks have with EVs.

The insurance costs also at least in a preliminary standpoint will seem to increase. Yes more rigid etc, but insurers will probably have zero clue to handle these claims initially and total them out until they have sufficient data points as reference.

 

[Ws6]

If it's off at all you find out when it hits the trim jig and if it is you ditch the part.

Yeah, but we are talking about "me", with standards. Not Tesla, which has no standards that I can detect. They use the cheapest, fastest part that allows them to shove product out the door, and when it fails they deal with it later.

 

[Ws6]

From a cost standpoint, the Giga Casting process removes hundreds of welding robots from the manufacturing floor. Saves assembly times and line issues. Additionally, the strength by weight for the aluminum castings exceeds high strength steel, so the frame is lighter. This helps the vehicle because EVs are pig heavy. Saving weight allows for a smaller battery/drivetrain to achieve the same performance and range.

So wild that Tesla is literally the first company that thought of this and that noone else does it just because they're too lazy, cheap, or dumb....