Tesla Inc
What Happened: For years, Tesla has been one of the most innovative companies in the electric vehicle sector and its vertical integration methods and focus on production have helped the company achieve benefits in cost and scale.
The company could be ready to disrupt the traditional moving assembly line method used by automotive companies for over 100 years further with a new patent showing its unboxed approach to manufacturing.
Unlike the traditional method of assembling pieces of a car together and passing them down the assembly line to complete a finished vehicle, the new method would allow Tesla to work on separate sections of the vehicle and then bring the pieces together at the end.
"A modular vehicle architecture for efficiently assembling vehicles. The modular vehicle architecture includes preparing a plurality of individual section of a vehicle in a plurality of sub-assembly lines prior to forming a full body frame of the vehicle," Tesla said in a patent with a publication date of June 9, 2024.
The patent references the front side, rear side, top side, bottom side, left side and right side as portions of the full body frame of the vehicle.
Tesla's patent says the normal manufacturing process moves the entire vehicle base to different areas for parts to be installed and for painting to occur.
"This traditional assembly process drives inefficiency in material handling and transport as the entire weight/footprint of the vehicle must be transported in order to assemble even small components."
In the patent, Tesla says "unboxing the assembly process" can improve speed in the manufacturing process.
Why It's Important: Musk hinted at this new manufacturing process in the past saying it could be faster and more efficient in making vehicles in the future.
The new process was reported to be part of the way for Tesla to get an electric vehicle to under the $25,000 price point, an item that has been delayed by the company.
With Tesla's robotaxi day scheduled for Oct. 10, all signs point to the robotaxi being the company's large focus and this new manufacturing patent could apply to that robotaxi vehicle.
Tesla could show off details of this manufacturing process during the robotaxi event.
While the new method abandons parts of the moving assembly line made famous by Henry Ford over 100 years ago, Musk and Tesla have been innovative in the production of electric vehicles. With scale and costs that other automotive companies are envious of, investors should be excited to see the new patent that could save costs and speed up the production methods for the company.
TSLA Price Action: Tesla shares were trading up 0.45% at $229.15 Thursday versus a 52-week trading range of $138.80 to $278.98. Tesla stock is down 8% year-to-date in 2024.
