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Transportation Businesses The Almighty Buck

Tesla Model 3 Teardown Reveals a 'Symphony of Engineering,' 30 Percent Profit Margin (bloomberg.com) 287

An anonymous reader quotes a report from Bloomberg: Munro & Associates, a small Detroit-area firm that disassembles new cars and analyzes them down to the nuts and bolts, came out in April with damning findings that the Model 3 was poorly built and -- even worse for Tesla's long-term outlook -- costly to build. On that second point, at least, founder Sandy Munro has reversed course. Upon further analysis, his firm has found that the sedan can be profitable. It may even have the potential to make a 30 percent margin, which would be unmatched by any other other battery-powered vehicle. Munro said the systems that impressed him most were the tight integration of circuit board components, which he calls "a symphony of engineering," and the efficiency of the battery developed by Tesla and Panasonic Corp. Munro also pointed to a comprehensive side-by-side comparison of the parts and materials used by the Model 3, General Motors Co.'s Chevrolet Bolt, and BMW AG's i3, in which the Model 3 comes out favorably. The report echoes a teardown published in June by German magazine WirtschaftsWoche, which found that the Model 3 costs about $28,000 to build -- $18,000 for materials and $10,000 for production.
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Tesla Model 3 Teardown Reveals a 'Symphony of Engineering,' 30 Percent Profit Margin

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  • by jellomizer ( 103300 ) on Tuesday July 17, 2018 @09:08AM (#56962156)

    Tesla were designed and built more like a software development project, then a traditional automobile project, initially, later on they started to bring in _some_ of the traditional methods.
    However being that we have an All Electric Car being built using a different project method, scares the Traditional Automotive industry and their biases would probably have them hunting down problems in the design vs good points.

    Detroit was the Silicon Valley 2 generations ago, having its thunder taken away from them in terms of economy then in business practice will make them feel nervous.

    Tesla is currently making all electric cars that people actually wan't vs. the Tiny road legal golf carts like the Leaf that people would only want it because it is electric and affordable. The Chevy Bolt is a good contender too. But it still lacks some coolness.

    • by drinkypoo ( 153816 ) <drink@hyperlogos.org> on Tuesday July 17, 2018 @09:49AM (#56962392) Homepage Journal

      Tesla were designed and built more like a software development project, then a traditional automobile project, initially, later on they started to bring in _some_ of the traditional methods.

      Tesla's first project was its original roadster, which was basically a repowered Lotus. You don't get more traditional than that in the EV space. The Model S and X were built fairly traditionally. Only with the Model 3 did Tesla try to use non-traditional methods, i.e. robots for everything. Then they went back to traditional methods of production (more humans on the line) when that failed. So you have that completely backwards.

      However being that we have an All Electric Car being built using a different project method, scares the Traditional Automotive industry and their biases would probably have them hunting down problems in the design vs good points.

      If only you had ever heard of the BMW i3 you would know that the traditional automotive industry is capable of the same kind of feat. Look into how the i3 is made, it makes the production process for a Tesla look positively ho-hum.

      Tesla is currently making all electric cars that people actually wan't vs. the Tiny road legal golf carts like the Leaf that people would only want it because it is electric and affordable. The Chevy Bolt is a good contender too. But it still lacks some coolness.

      Ford (which is struggling for stock price) and FCA (which is circling the bowl for a broad variety of reasons) the entrenched auto industry can afford to take the wait-and-see position while Tesla figures out what customers want. If they ever actually got desperate, they could use Tesla's patents, and license particular pieces of tech from Tesla.

      There are two particularly likely outcomes for Tesla. One, they continue to succeed as an automaker, and make a small percentage of the vehicles on the road. By the time their numbers get at all big, mobility/sharing services will have decimated personal vehicle ownership. Or two, they simply become a tier 1 supplier, providing primarily batteries, electronics, and electric motors. Automakers are already getting into more powerplant sharing because customers of low-end vehicles don't care. Sooner or later, nobody will.

      • by sfcat ( 872532 )

        Ford (which is struggling for stock price) and FCA (which is circling the bowl for a broad variety of reasons) the entrenched auto industry can afford to take the wait-and-see position while Tesla figures out what customers want. If they ever actually got desperate, they could use Tesla's patents, and license particular pieces of tech from Tesla.

        There are two particularly likely outcomes for Tesla. One, they continue to succeed as an automaker, and make a small percentage of the vehicles on the road. By the time their numbers get at all big, mobility/sharing services will have decimated personal vehicle ownership. Or two, they simply become a tier 1 supplier, providing primarily batteries, electronics, and electric motors. Automakers are already getting into more powerplant sharing because customers of low-end vehicles don't care. Sooner or later, nobody will.

        And this is the basic flaw in the bear's arguments. What makes you think that the big auto makers could make an EV profitably? They don't have battery factories. They don't have a supply chain for the EV parts. And they don't have any experience making AVs. GM is probably the closest of the big auto makers to being able to make an EV profitably and its unlikely likely to do so. They lose about $9000 per Bolt today. To make that profitable, they need to scale up to about 10x the sales they currently g

        • Also, the Waze AV system costs about $100K per car to install so I doubt AVs will do much to reduce auto ownership in the next decade or so.

          We all know that most AVs will initially be owned by fleets, not by private owners — and putting AVs in the hands of private owners does relatively little to decrease vehicle ownership, while having them be owned by fleet managers does a lot. $100k seems like a lot, until you consider that it does the job of multiple drivers. For example, it enables one-way vehicle rentals in-town, which can dramatically increase utilization. Since it never takes a break (except to recharge) it does the job of three t

      • mobility/sharing services will have decimated personal vehicle ownership

        I keep hearing this or similar claims over and over again every time autonomous vehicles are discussed. Does anyone actually have any proof that aside from a few Slashdot hipsters that people won't still want to actually own their own cars when autonomous cars become mainstream?

      • If only you had ever heard of the BMW i3

        Please make sure people hear about BMW i3. Make sure they never look at it. Ugly as hell. I have seen Mattel and FisherPrice with better styling that that godawful thing.

        I was eagerly waiting for i3. I was willing to pay 50K for it in 2014. One look at it. And the spec, 2000 lb plastic body... No BMW, go back to the drawing board. There is a i8 or i9 that looks really cool. But priced at 140K.

    • by AmiMoJo ( 196126 ) on Tuesday July 17, 2018 @10:53AM (#56962746) Homepage Journal

      You obviously have never been near a Leaf. They aren't tiny, they are actually quite large. Same cargo space as a model 3, bigger than a typical crossover.

      They are solid cars, decent performance compared to similar sized fossil cars.

      Tesla have been met in the middle here. We have cars like the Kona, Niro and soon to be released Leaf 60 in the same price bracket as the M3 SR with similar features (100kW charging, auto steering, 150kW+ motor, 250+ mile range). You could argue that it might not have happened without Tesla, but equally Nissan build a good affordable car and charging network and LG got the battery pack cost down too.

    • "Tesla were designed and built more like a software development project, then a traditional automobile project,"

      And you think that is positive?

      Keep in mind that automobile makers, unlike software developers, can be held liable for (some) design defects.

  • PCB Design (Score:4, Interesting)

    by albeit unknown ( 136964 ) on Tuesday July 17, 2018 @10:59AM (#56962784)
    If you drill through to the breakdown video, he shows the PCB called a "symphony of engineering"

    It's a very ordinary design and would have been considered dense 25 years ago. Today, those components are medium-sized or even large. The PCB layout is designed to basic industry standards and no more. However, needlessly-small components reduce manufacturing yield and reliability. Unusual PCB designs increase costs and shrink your supplier base.

    The design is simply competent so I can't imagine what he's used to seeing that makes this one worth gushing over.
  • by edi_guy ( 2225738 ) on Tuesday July 17, 2018 @12:18PM (#56963190)
    Sandy Munro is a hacker in the truest sense of the word. Unfortunately I can imagine a day in the not too distant future when his actions might be made illegal under some sort of intellectual property law run a muck.

Every nonzero finite dimensional inner product space has an orthonormal basis. It makes sense, when you don't think about it.

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