According to two sources familiar with the matter, Tesla has reportedly scrapped plans to innovate in its groundbreaking gigacasting technology, also known as "integrated casting," signaling another cost-cutting move amidst declining sales and increased competition.
Integrated casting is an advanced technology aimed at simplifying the manufacturing process and reducing costs by using large die-casting machines to cast most of the car's body bottom as a single piece.
Traditionally, a typical car's body bottom would consist of hundreds of individual parts.
This technology was expected to revolutionize car manufacturing, with Tesla leading the way in this field.
However, Tesla is said to have halted this innovative plan and opted to revert to the more traditional three-part casting method.
Recent Tesla models, including the Model Y crossover SUV and Cybertruck pickup, have adopted the traditional three-part casting method.
This move by Tesla is another example of cutting short-term expenses as the company adjusts to declining sales and profit margins, soft global electric vehicle demand, and intensified competition in the Chinese market.
Tesla laid off over 10% of its global workforce last month, with some executives resigning or being dismissed.
Terry Woychowski, President of the U.S. engineering firm Caresoft Global, stated that discontinuing the integrated casting technology would save the company from significant short-term capital investments in manufacturing and design.
These actions also reflect Tesla's fundamental strategic shift towards focusing more on developing autonomous vehicles rather than simply driving significant growth in electric vehicle sales, although many investors are more focused on the latter.
Tesla has not publicly commented on this matter yet. However, analysts suggest that this decision will undoubtedly have a profound impact on the company's production methods and cost structure. It also highlights Tesla's flexible adjustments in response to market changes.
James Womack, former research director at the Massachusetts Institute of Technology (MIT) and an expert in car manufacturing, stated that innovative production technologies do little to boost Tesla car sales.
"From a public and buyer perspective, it's not very exciting," Womack said. "You don't know if this will actually lead to significant cost savings."
