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: Production of the Model 3 at the US factory in Freemont
In cooperation with "The Economist".
The great Teslafication
How supply chain turmoil is remaking the car industry
Learning from Elon Musk
If you want to see how technology and deglobalization are changing the global economy, there are few better places to look than the car industry.
Not only is it going through an epochal shift: away from the internal-combustion engine (ICE) and towards electric vehicles (EVS).
Automobiles are also becoming, in effect, computers on wheels, running as much on processing power as the horse variety.
And the pandemic has wreaked havoc on car companies' complex global supply chains, most prominently of semiconductors.
As carmakers electrify, computerize and refashion their supply chains for the new reality, the giant sector is undergoing the greatest transformation in decades.
Having outsourced much of the manufacturing process in the past half-century to focus on design, supplier management and parts assembly, car firms want greater control over their value chain—from the metals that go into EV batteries to the software those EVs run on and the shops in which they are sold and they want to turn their EV arms into tech startups.
In both respects, control and startupiness, Big Auto wants to be more like Tesla, the world's undisputed EV champion.
As with earlier examples of tailgating a rival that tries something that works, from Ford's moving assembly line or Toyota's just-in-time manufacturing, Teslafication of the car business will prove disruptive.
Doing everything under one roof is an idea both old and new.
Tesla's industrial system is at first glance an embrace of Silicon Valley's "full stack”—internalising all aspects of production, and therefore all the profits. Elon Musk, Tesla's opinionated boss, once claimed that his company was "absurdly vertically integrated” by any standard , not just the car industry's.
In fact, Mr Musk borrows heavily from carmaking's past.
Henry Ford often sourced raw materials, like rubber for tires and steel for chassis, from plantations and blast furnaces owned by his firm.
His River Rouge factory in Detroit was powered by coal from Ford mines.
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