Its obsession with reducing complexity in production, coupled with cutting-edge processes, allows Tesla to derive more profit from the sales of its vehicles.
In our column at LatestCarNews about manufacturing automobiles, we told you that Tesla is the leader in this field. The manufacturer has always approached production with an obsession for reducing complexity, speed of assembly, and, above all, reducing costs. The result of these efforts allows Tesla to record better profits than other automakers, such as Toyota, in particular.
According to data from Reuters media published on November 28, 2022, Tesla is currently making almost 8 times more net profit than Toyota on each vehicle sold. It’s US$9,754 in profit that Tesla makes on the sale of a single model, compared to $1,273 for Toyota.
But the situation is likely to improve for Tesla. Although Toyota has announced that it wants to completely revamp its electric marketing strategy – which includes a complete overhaul of its manufacturing sector – Tesla is on the verge of making several software and physical improvements for the Model 3, while increasing its profit margin. profit along the way. It is important to clarify that Tesla is not a manufacturer that usually makes this kind of update. Rather, it is known for prioritizing remote updates. It alters very little the aesthetics and physical appearance of its vehicles over time. Apart from the new LFP battery in 2022, the Model 3 has been physically unchanged for 5 years.
To help sales
Tesla is now building the Model 3 using new assembly processes, like its Gigapress, for example. The manufacturer is therefore looking to reduce costs further and thus increase profitability. It is also to give a second wind to sales of the Model 3. It would be Tesla’s Project Highland which aims to keep production complexity to a minimum.
“We sometimes realized that certain parts were useless. They had been added to the construction of the vehicle as a precaution or by mistake. We ended up removing a good number of coins that simply had no use, ”explained Elon Musk during a conference for the investment firm Baron Funds.
Remember, however, that the Model 3 is experiencing a drop in sales in China, in particular. In the first 10 months of 2022, Tesla saw a 9% drop in sales there. In China, the Model 3 is now being dethroned by the BYD Qin and Han electric sedans.
There is also the fact that new competition is starting to play on Tesla’s toes, notably the Hyundai group with the IONIQ 5 / EV6 / GV60 trio, or even BMW and Polestar with the Polestar 2 and the BMW i4 . . Tesla will therefore try, through its mid-term update, to seduce consumers again.
From this update, we could expect a slight alteration of the design, more specifically the front and rear parts. New rims and new body colors could be added, while an improvement in build quality could be seen. The passenger compartment, features, onboard technology, and even the powertrain could all be reviewed, as could the range of versions and the price range.
However, we should be patient before the arrival of this update, because Tesla does not intend to start production at its giga-factory in Shanghai, China, until the third quarter of 2023. Note, however, that the new Model 3 will also be built at the Fremont, Calif. plant, but Tesla is reportedly awaiting some confirmation from its suppliers before announcing the production start date.
