‘The Elon Musk Formula’ – Learn from your partner, then step back

Tram Ho

Elon Musk’s profile shows that he is a quick learner, alliances with companies that lack Tesla technology, hiring the most talented people, and then crosses the boundaries that have bound partners to fear risk .

Now, Musk and his team are preparing to map out new steps in the effort to make Tesla a self-sufficient, reduced dependency on suppliers, at the “Battery Day” event on the 22nd. / 9.

Over the years, Musk has repeatedly hinted at key technological advances that will be announced as Tesla strives to produce low-cost, long-life batteries to bring its electric cars on par with low-cost gasoline cars.

A new battery cell design, chemical formula and manufacturing cycle are just a few of the developments that have allowed Tesla to ease its reliance on longtime battery partner Panasonic, Japan, a source familiar with the matter said.

“Elon Musk doesn’t want any part of the business to be dependent on other people,” said a former senior executive at Tesla. “And whatever the outcome – sometimes better, sometimes worse – he thinks he can do better, faster and cheaper.”

Tesla’s battery manufacturing partnership with Panasonic, Korea’s LG Chem and China’s Contemporary Amperex Technology Co Ltd (CATL) are expected to continue.

But at the same time, Tesla is also turning to control the production of battery cells, the basic building blocks of electric vehicle battery packs, in highly automated plants. Tesla is hiring dozens of battery cell engineering and manufacturing experts to work at factories near Berlin, Germany, and factories in Fremont, California, USA.

“Our relationship with Tesla hasn’t changed,” said a Panasonic spokesperson.

“Our relationship, both past and present, is fine. Panasonic is not a supplier to Tesla, we are a partner. Our partnership will definitely continue to innovate and contribute to a better society ”.

Tesla did not respond to requests for comment.

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Billionaire Elon Musk. Photo: Reuters.

Make everything

Since taking over the fledgling company in 2004, Musk’s goal has been to learn – from partnerships, acquisitions and talent hiring – to put key technologies under his control. Tesla.

Tesla says its goal is to build a vertical merger, or a digital version of the Ford Mortor’s Model A production system, by the late 1920s.

“Musk thinks he can improve everything the suppliers do – everything,” said former Tesla supply chain executive Tom Wessner, now head of consulting at Imprint Advisors. . “He wants to make everything.”

Batteries, which are a big part of the cost of electric cars, are central to Musk’s approach. While his subordinates have been arguing for years against developing proprietary Tesla battery cells, Musk has continued towards that goal.

“Say ‘no’ to him, and then he really wants to,” said another former Tesla employee.

The changes in battery design, chemical formula, and manufacturing processes that Tesla plans to announce next week are aimed at solving the problem that is making electric cars more expensive than carbon-emitting cars that use combustion engines. in.

Reuters reported in May that Tesla is planning to launch a low-cost battery, designed to travel a million miles. Tesla also works to ensure direct supply of vital battery materials such as nickel, while developing chemicals that do not include expensive cobalt raw materials, as well as highly automated manufacturing processes to increase production speed.

‘Straight to Mars’

Panasonic cooperates with Tesla at the $ 5 billion “Gigafactory” super plant in Nevada, and CATL and LG Chem supply cells to the Tesla factory in Shanghai, which assembles the modules and battery packs for its Model 3 sedan. .

Panasonic recently said it is planning to expand its production line in Nevada, which supplies Tesla-assembled battery module cells.

But according to two former Tesla executives, the partnership at the Nevada Gigafactory is near zero. Musk ordered a battery production research team in 2011, but eventually partnered with Panasonic in 2013.

Now, Tesla is testing a battery cell production line in Fremont and is building a mass automatic battery cell production facility in Gruenheide, Germany.

The up and down relationship with Panasonic also mirrors Tesla’s relationship with other alliances.

During the development of an alliance with Germany’s Daimler, an early Tesla investor, Musk showed an interest in sensors that help keep cars in the right lane.

At the time, the Tesla Model S, though fine-tuned by Mercedes-Benz engineers, still lacked the camera, sensors and driver-assist software of the Mercedes S-Class.

“He learned that and went a step further. We require engineers to aim for the Moon. He aimed directly at Mars, ”said a senior engineer at Daimler.

At the same time, the partnership with Toyota Japan, another investor, taught him about quality management.

In the end, executives from Daimler and Toyota have joined Tesla in many key positions, along with talented people from Alphabet, Google, Apple, Amazon, Microsoft, and rival carmakers such as Ford, BMW and Audi.

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Image of Tesla’s Model X electric vehicle. Photo: Reuters.

Turning away from Musk

However, some relationships did not end well.

Tesla teamed up with Israeli sensor maker Mobileye in 2014 to learn how to design a self-driving system, which later evolved into Tesla’s Autopilot.

“Mobileye was the driving force behind the original Autopilot,” said an anonymous former CEO of Mobileye.

Mobileye is currently owned by Intel and has a market value of $ 420 billion. The company was on the brink of collapse in late 2008, and also saw the danger of sharing technology with a fast-growing startup like Tesla.

But Tesla and Mobileye had a public and bitter split after a driver died when a Model S autopilot crashed in 2016.

At the time, Amnon Shashua, now the president and chief executive officer of Mobileye, said Tesla’s Autopilot was not designed to deal with every possible collision, because it was a support system. driver aids, not unmanned systems.

American tech company Nvidia followed Mobileye as a supplier to Autopilot, but was eventually ripped off.

“Nvidia and Tesla share a common strategy for developing software-based, high-performance computer-powered AI vehicles. Elon is extremely focused on vertical mergers and wants to create its own chips, ”said Nvidia’s senior auto manager Danny Shapiro.

Both Shapiro and the former Mobileye CEO asserted that Tesla used their technology inappropriately.

In addition to the partnership, Musk also made a series of mergers four years ago, acquiring lesser known companies such as Grohmann, Perbix, Riviera, Compass, Hibar Systems, to quickly enhance Tesla’s expertise. in the field of automation. Maxwell and SilLion then further enhanced Tesla’s capabilities in the field of battery technology.

“He learned a lot from those people,” said Mark Ellis, a senior consultant with Munro & Associates, a Tesla researcher. “He took advantage of a lot of information from them, then made an effort to make things better.”

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Source : Genk