"Tesla retreats from next-generation ‘gigacasting’ manufacturing process" (TSLA)

 A Reuters Exclusive, May 1:

Tesla has backed away from an ambitious plan for innovations in gigacasting, its pioneering manufacturing process, according to two sources familiar with the matter, in another sign that the electric-vehicle maker is retrenching amid falling sales and rising competition.

Tesla has been a leader in gigacasting, a cutting-edge technique that uses huge presses with thousands of tons of clamping pressure to die-cast large sections of the car’s underbody. On a typical vehicle, the underbody can consist of hundreds of individual parts.

 

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.

 

Tesla’s retreat from one-piece gigacasting has not been previously reported. The automaker did not respond to a request for comment.

 

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 (002594.SZ). 

 

, opens ne 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.

 

The step-back on gigacasting occurred last autumn, the people said, before Tesla decided in late February to halt development of an all-new affordable car, often called the Model 2, which would have been the first vehicle it built with one-piece gigacasting. Reuters first reported the cancellation of the Model 2 on April 5....

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On one hand this is a bit of penny-wise, pound-foolish as gigacasting saves money on every unit sold. On the other hand "every unit sold."

 

If sales over the next three to six quarters are expected to decline, or at best flat-line it would make sense to delay the capital expenditure required to expand the gigcasting technique throughout the manufacturing empire.

Tesla currently has the ability to squeeze three million units out of the various gigafactories and would be hard-pressed to see unit sales hit 500,000 per quarter before Q2 2026, especially so if they are penciling-in a recession in any of their major markets.

All that being said, the gigacasting method will be how automobiles are produced later this decade and beyond.

Previously:

November 2023: ""Volvo Joins Tesla, Toyota in Giga Press Game""

November 2023: "Where In The World Is The FT's David Keohane? (gigacasting)"

February 2023: "Tesla's Margins? Thank Gigapresses (TSLA)"

Tesla was the first automaker to go large with the gigapresses.

And with Ford and now Toyota following suit, Elon is trying to stay ahead of the competition with the next innovation. From Technology.org, September 15:

Tesla Aims to ‘Gigacast’ the Underbody of Its EVs as a Single Piece

Tesla has achieved a significant technological breakthrough that could revolutionize its electric vehicle (EV) manufacturing process. Now, the company is nearly ready to die-cast – or gigacast, as Elon Musk calls it – nearly the entire underbody of its EVs as a single piece.

Tesla originally introduced the concept of “gigacasting” by utilizing massive presses with clamping pressures ranging from 6,000 to 9,000 tons to mold the front and rear structures of its Model Y. This innovative approach substantially lowered production costs, placing other automakers in a race to catch up.

To further solidify its lead, Tesla is now on the brink of a groundbreaking development that would enable the die casting of nearly the entire complex underbody of an EV as a single piece. This stands in stark contrast to traditional cars, which require approximately 400 individual parts for the underbody.

This gigacasting expertise forms a critical component of Tesla’s “unboxed” manufacturing strategy, unveiled by CEO Elon Musk in March. It is a cornerstone of Musk’s plan to produce tens of millions of more affordable EVs in the next decade while maintaining profitability....

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