According to Automotive News, several automotive manufacturing experts agree with Martin French, managing director at consulting firm Berylls, who said, “I got the feeling when I watched the Tesla presentation that the Toyota production system has been thrown up in the air and machine-gunned down.” This comment is in response to Tesla’s unboxed production process revealed earlier this year, as well as to whether the widely mimicked Toyota Production System (TPS) will be disrupted by this new manufacturing process.
Mass production allowed Ford to decrease the price of its Model T from $850 to $300 between 1908 and 1924.
Using this unboxed process, Tesla aims to reduce the footprint of its factories by 40%, while cutting production costs in half. If successful, this would be revolutionary to the process of producing automobiles. The last revolution to occur in automotive manufacturing was Henry Ford’s introduction of the assembly line, which ushered in mass production in the early nineteen hundreds. This allowed Ford to reduce the price of its Model T from $850 in 1908 to just $300 by 1924.
The idea of a radical rethink for manufacturing is not new for Elon Musk. During his Battery Day presentation in 2020, Musk stated that he wanted Tesla to be “the best at manufacturing than any company on earth.” He described how volumetric efficiency and faster production speed are critical to reducing costs. Musk further described how the technology and design of the factory requires as much engineering capability (including software development) as what is required to engineer the vehicle. For Musk, this seems to point to fewer factories being able to produce the same number of vehicles as numerous factories produce today.
Winning in the auto sector will not be decided by vehicle technology. - Elon Musk
There are several manufacturing experts who do not believe this Tesla production process will be superior to TPS. James Womack (co-author of “The Machine That Changed the World”) calls TPS more than an assembly process. According to Womack, TPS allows automakers to run manufacturing processes as well as related operations more efficiently. Another expert (Hide Oba) calls the unboxed process too rigid, not allowing many manufacturing variables important to offering a varied lineup of vehicles.
The unboxed process will be put to the test by Tesla when it is installed in late 2024 at a new factory in Mexico. Thus, the potential disruptive impact of the process cannot be known until then. Of course, Tesla has a history of missed product and capability targets (Full Self Drive and Cybertruck are notable examples). Many Tesla fans continue to conveniently overlook these delays and failures. Yet, the company also has a history of eventually succeeding in the face of much doubt by many automotive experts.
Musk once commented that winning in the auto sector will not be decided by vehicle technology. He seems to believe that core competence in manufacturing will ultimately determine the automotive winners of the future.