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Tesla Slash Production Costs By Over 50% Following This Innovative Change

Tesla has been able to reduce production costs by just under 60%.

After many price increases on the electric vehicles and production issues, the EV company has recently revealed the plans for the company over the next five years. Speaking at the Goldman Sachs tech conference in San Francisco, Martin Viecha, Tesla’s boss of investor relations, summarised the company’s optimisations. According to The Insider, Viecha said:

“EV architecture is so different from internal combustion engine, it allows for a third revolution in automotive manufacturing,”

Claiming that Tesla is in the third revolution, Viecha explained that the optimisations in the production process have enabled Tesla to bring production costs down from $84,000 in 2017 to $36,000.

The main reason for this massive drop in the cost is the introduction of the megacastings. We have seen evidence of Tesla using these on the Model Y. This technique hugely reduces the amount of components used as well as saves a lot of time and money.

Tesla have brought in a new factory design that will be in the Gigafactories in Shanghai, Berlin, and Texas. The new design will incorporate a change in layout to bring everything under one roof to be able to speed up the production process and bring the costs down. Viecha anticipates Tesla will see the production costs drop even further below $36,000.