Capital Efficiency (Tesla’s Obsession)
Credit to Author: Zachary Shahan| Date: Sat, 26 Oct 2019 04:30:26 +0000
Published on October 26th, 2019 | by Zachary Shahan
October 26th, 2019 by Zachary Shahan
I recall a quarterly Tesla conference call some years ago in which then-CFO Deepak Ahuja emphasized quite strongly and clearly that he had worked many years at another major automaker (Ford) and had never seen it or any other automaker focus as obsessively or effectively on improving capital efficiency as Tesla does.
Talking to Tesla President of Automotive Jerome Guillen earlier this year in Tesla’s Fremont factory, he discussed for several minutes Tesla’s focus on making almost nonstop incremental improvements in the manufacturing process. Top managers in the company’s unique seat factory told CleanTechnica about their efforts to shave milliseconds off of certain manufacturing processes as part of an ongoing effort to get more efficient. More recently, talking to a Tesla insider, I was told that Jerome required two manufacturing improvements a week from staff (at least, in years past, but presumably still today). To close out these examples (for now), Tesla CEO Elon Musk spoke last year about the “game of pennies” Tesla was engaged in to bring down manufacturing costs on each Model 3 the company produced.
I think you’re getting the picture. Capital efficiency is not the sexiest phrase in the world of manufacturing, but it’s got to be one of the most important. The noteworthy thing for Tesla supporters as well as critics is that the company seems to continuously improve on this matter. Tesla’s 3rd quarter shareholder letter highlighted capital efficiency in several places, but unless you were looking for info on this topic or you just keep a close eye on manufacturing lingo like this, it might not have jumped out at you. So, I thought I’d spend a little time showing how much Tesla actually highlighted this topic:
Any other favorite examples of Tesla improving capital efficiency?
If you’d like to buy a Tesla Model 3, Model S, or Model X and want 1,000 miles of free Supercharging, feel free to use my referral code: https://ts.la/zachary63404 — or use someone else’s if you have a friend or family member with a Tesla. I won’t cry. You can also use the code to get a discount on Tesla solar if that interests you.
Related:
Jerome — The Man, The Myth, The Tesla Super-Engineer — #CleanTechnica Interview
Our Interview With Tesla President Jerome Guillen, Part Deux
Follow CleanTechnica on Google News.
It will make you happy & help you live in peace for the rest of your life.
Zachary Shahan Zach is tryin’ to help society help itself one word at a time. He spends most of his time here on CleanTechnica as its director and chief editor. He’s also the CEO of Important Media. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, Canada, and Curaçao. Zach has long-term investments in Tesla [TSLA] — after years of covering solar and EVs, he simply has a lot of faith in this company and feels like it is a good cleantech company to invest in. But he offers no investment advice and does not recommend investing in Tesla or any other company.