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"key elements" of the battery module assembly had to be taken over and redesigned, Musk says. Tesla seems to be taking the opposite approach to Apple here. In
by williamscales 9y ago
"key elements" of the battery module assembly had to be taken over and redesigned, Musk says.
Tesla seems to be taking the opposite approach to Apple here. In my observation, Apple drives its suppliers extremely hard to achieve the quality it requires. Tesla, on the other hand, is too eager to bring any sundry part in house (e.g. car seats). Apple's approach appears to work in that it pushes suppliers to do what's necessary. I worry that Tesla, having already bitten off a large bite to chew, is inviting too much distraction that will, in the long run, not put Tesla in a stronger position (there is a reason most automobile manufacturers outsource their seats after all).
- btian 9y agoThen how do you explain Apple making their own SoC?
- lttlrck 9y agoPerhaps that is their secret sauce?
- DiabloD3 9y agoBecause they bought an entire company to do it with, because the value proposition of doing that was better than continuing to pay the Qualcomm tax, or conversely siding with Samsung to bring Exynos LTE to the US (and they already have too much of a complex relationship with Samsung; to the point that even on the iPhone 8 and X, if you bought an iPhone instead of a Galaxy S, Samsung still makes a profit).
- davrosthedalek 9y agoAs in: they earn more if an iPhone X is bought than if a S8 is bought? If not, do you know the relative size of the profit?
- DiabloD3 9y agoNot more, afaik, although some headlines seem to have reported it. All I know is Samsung is happy no matter if you buy an S8 or an X.
- williamscales 9y agoWell, I guess it's apparent now that it fell outside of my immediate observation. I would be curious what the risk calculus on that decision was. I think it still fits in to the same narrative that I was building though: Tesla seems like they want to bring everything in house while Apple has only brought one piece, the jewel of the system, in house.
- dzdt 9y agoIt is a part of their core product differentiation. They can get better performance and longer battery life by owning the hardware design and OS design and being good at it. Apple in particular understood lomg before competitors that battery life is an extremely important real world metric. Doing their own SOC helps them optimise that.
- peoplewindow 9y agoSeems like revisionism to me? Before the iPhone/smartphones in general, battery life on a mobile phone of a week was not uncommon. One of the first criticisms of the iPhone was that you had to charge it every night. I'm not sure I'd say that they had some unique insight into the importance of battery life.
- sah2ed 9y agoNot revisionism. Prior to the launch of the iPhone, "smartphones weren't very smart" to quote Steve Jobs. Anyway, you are comparing the battery life of touch-based smartphones with its non-touch predecessor which isn't a fair comparison. Besides, mobile phones that could last for a week from a single charge are definitely not considered smartphones, those are feature phones.
- sgc 9y agoBatteries are part of Tesla's core differentiation as well. Even if one might argue they make too much in house, taking batteries on seems like a reasonable move to me.
- drpgq 9y agoI think Blackberry cared a lot more, but it didn't work out well for them.
- rodgerd 9y agoThey don't make their own chips, though, do they? Or screens, or whatnot. Making their own SoC is like Tesla making their own drivetrain, not like making their own seats.
- simonh 9y agoI don't think Apple designing (not making, designing) their own SoC is comparable to Tesla making their own seats.
- rando444 9y agoYou could substitute Apple with Wal-Mart in your comment and every bit would be just as true. Sometimes forcing your supply chain to pinch every penny works out the best for your shareholders.. sometimes focusing on quality products pays off more in the long run. Time will tell.
- cma 9y agoInsourcing some things also helps pose a credible threat to suppliers in the future when you tell them to straighten something up or you will insource it.
- williamscales 9y agoHmm, I think I do agree with you that it would be true, but in my estimation it does shift the meaning. I was thinking of how Apple is known to specify extremely rigorous quality standards on cutting edge technology and really push its suppliers to advance their craft. Whereas Walmart I would associate more with outright penny-pinching. I'm thinking about the different ways to structure a business to achieve a quality product. Is there a good example of a company that produces, in-house, an entire non-trivial (i.e. there are some systems to be integrated) product?
- alexeldeib 9y agoFirst companies that come to mind as plausibly fulfilling this would be Samsung/LG types. Not sure of an example of a company on a smaller scale.
- smaddox 9y agoIntel.
- Gibbon1 9y agoOther comment mentioned Intel. Intel does their own fab. Other point Boeing had years long delays with the 787 partly due to developing a new technology while also trying to outsource much of their production.
- chipotle_coyote 9y ago
- skywhopper 9y agoThe difference is that Apple has its supply chain and manufacturing processes down to an exact science and has for years. Tesla is clearly still learning how to put everything together in a profitable way.
- NickM 9y agoApple does have a great deal more leverage over their suppliers though, just by virtue of their size. It may not be the most efficient thing for Tesla to bring so much stuff in house, but it may be their only option if they don't want to left at the whims of their suppliers.
- rconti 9y agoWendover Productions recently did a Youtube episode on Elon Musk that was citing doing things in-house as a way to keep costs low. Seemed a bit counter-intuitive, but they had some interesting numbers.
- dilemma 9y agoIf you're not good at it, doing things in-house can be multiples more expensive than buying from the market.
- rodgerd 9y agoApple and... every successful mass-market car maker. So it's interesting that Tesla are inhousing like Morgan rather than setting high standards like Toyota.
- azernik 9y agoI'm not sure about the "too" part. This approach has worked quite well for SpaceX - it might not work out for Tesla, but it's too early on this period of massive transition to know for sure.
- rasz 9y ago>Tesla seems to be taking the opposite approach to Apple here. In my observation, Apple drives its suppliers extremely hard to achieve the quality it requires. Apple earned this right by helping those suppliers get off the ground. With introduction of iMacs/iBooks (~1999) Apple helped build wireless card manufacturing plant in Taiwan from nothing ('few dusty rooms' at their modem supplier manufacturing facility). They did similar thing while shopping for Camera supplier, instead of going with someone established like Sony Apple chose Taiwanese bottom of the barrel volume suppliers (Primax/Micron) and grew their camera module divisions with each iteration of iPhone.