The Musk Method: Study from partners then go it alone

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Elon Musk is hailed as an innovator and disruptor who went from knowing next to nothing about building cars to running the world's most effective automaker in the space of 16 years.

But his record shows he's more of an easy learner who forged alliances with firms that had technology Tesla lacked, hired some of their most talented people, and powered through the boundaries that limited more risk-averse partners.

Now, Musk and his team are getting ready to outline new steps in Tesla's drive to become more self-sufficient company less reliant on suppliers at its "Battery Day" event on Sept 22.

Musk has been dropping hints for months that significant advances in technology will be announced as Tesla strives to create the low-cost, long-lasting batteries that could put its electric cars on a more equal footing with cheaper gasoline vehicles.

New battery cell designs, chemistries and manufacturing processes are just a number of the developments that would allow Tesla to lessen its reliance on its long-time battery partner, Japan's Panasonic, people familiar with the situation said.

"Elon doesn't want any part of his business to be reliant on another person," said one former senior executive at Tesla who declined to be named. "And for better or worse - sometimes better, sometimes worse - he thinks he can do it better, faster and cheaper."

Tesla has battery production partnerships with Panasonic, South Korea's LG Chem and China's Contemporary Amperex Technology Co Ltd (CATL) that are expected to continue.

But at the same time, Tesla is moving to regulate production of cells - the essential element of electric vehicle battery packs- at highly automated factories, including one being built near Berlin, Germany and another in Fremont, California where Tesla is hiring a large number of professionals in battery cell engineering and manufacturing.

"There has been no change inside our relationship with Tesla," Panasonic said in a statement supplied by a company spokeswoman.

"Our relationship, both past and present has been sound. Panasonic isn't a supplier to Tesla; we are partners. There is no doubt our partnership will continue steadily to innovate and donate to the betterment of society."

Tesla didn't respond immediately to a obtain comment.

MAKE EVERYTHING

Since he took over the fledgling company in 2004, Musk's goal has gone to learn enough - from partnerships, acquisitions and talent recruitment - to bring key technologies under Tesla's control, persons acquainted with Tesla's strategy said.

They said desire to was to create a heavily vertically integrated company, or an electronic version of Ford Motor Co's iron-ore-to-Model-A production system of the late 1920s.

"Elon thought he could improve on everything the suppliers did - everything," said former Tesla supply chain executive Tom Wessner, who is now head of industry consultancy Imprint Advisors. "He wished to make everything."

Batteries, a large chunk of the cost of an electric car, are central to the Musk method. While subordinates have argued for years against developing proprietary Tesla battery cells, Musk continues to operate a vehicle toward that goal.

"Tell him 'No', and then he really wants to do it," said a third former Tesla veteran.

The changes in battery design, chemistry and production processes Tesla expects to reveal next week are targeted at reworking the math that until now has made electric cars more costly than carbon-emitting vehicles with combustion engines.

Reuters reported in May that Tesla is planning to unveil low-cost batteries made to last for a million miles. Tesla is also attempting to secure direct supplies of key battery materials, such as for example nickel, while developing cell chemistries that could no more need expensive cobalt along with highly automated manufacturing processes to increase production.

'STRAIGHT FOR MARS'

Panasonic is partnered with Tesla at the $5 billion Nevada "Gigafactory", while CATL and LG Chem supply cells to Tesla's Shanghai factory, where battery modules and packs are assembled because of its Model 3 sedan.

Panasonic recently said it really is likely to expand its production lines in Nevada, which supply the cells that then go in to the battery modules assembled nearby by Tesla.

However the Nevada Gigafactory partnership almost didn't happen, according to two former Tesla executives. Musk ordered a team to review battery manufacturing in 2011, according to 1 former executive, but eventually partnered with Panasonic in 2013.

Now, Tesla is testing a battery cell pilot manufacturing line in Fremont and is building its vast automated cell manufacturing facility in Gruenheide in Germany.

The roller-coaster relationship with Panasonic mirrors other Tesla alliances.

During its development alliance with Germany's Daimler, that was an early investor in Tesla, Musk became considering sensors that would help to keep cars within traffic lanes.

Until then the Tesla Model S, which Mercedes-Benz engineers helped refine, lacked cameras or superior driver assistance sensors and software such as for example those used in the Mercedes S-Class.

"He learned about that and took it a step further. We asked our engineers to aim for the moon. He went straight for Mars," said a senior Daimler engineer said.

Meanwhile, an association with Japan's Toyota, another early investor, taught him about quality management.

Eventually, executives from Daimler and Toyota joined Tesla in key roles, along with talent from Alphabet Inc's Google, Apple, Amazon, Microsoft, together with rival carmakers Ford, BMW and Audi.

THE MUSK SPIN

Some relationships didn't end well, however.

Tesla hooked up with Israeli sensor maker Mobileye in 2014, partly to discover how to design a self-driving system that evolved into Tesla's Autopilot.

"Mobileye was the driving force behind the initial Autopilot," said a former Mobileye executive, who declined to be named.

Mobileye, which is currently owned by Intel, also recognized the chance of sharing technology with a fast-moving startup like Tesla, that was on the brink of collapse at the end of 2008 and now includes a market value of $420 billion.

But Tesla and Mobileye had an acrimonious and public split after a driver was killed in 2016 whenever a Model S using the Autopilot system crashed.

At that time, Amnon Shashua, who is now Mobileye president and chief executive, said Tesla's Autopilot had not been made to cover all possible crash conditions as it was a driver assistance system, not a driverless system.

U.S. tech firm Nvidia followed Mobileye as a supplier for Autopilot, but it too was finally sidelined.

"Nvidia and Tesla share a common strategy of developing software-defined vehicles powered by high-performance AI computers. Elon is quite focused on vertical integration and wanted to make his own chips," said Nvidia's senior director of automotive, Danny Shapiro.

Both Shapiro and the former Mobileye executive said there is no question of Tesla improperly using their technology.

Furthermore to partnerships, Musk went on an acquisition spree four years ago, buying a handful of little-known companies Grohmann, Perbix, Riviera, Compass, Hibar Systems - to rapidly advance Tesla's expertise in automation. Maxwell and SilLion further boosted Tesla's ability in battery technology.

"He learned a whole lot from those individuals," said Mark Ellis, a senior consultant at Munro & Associates, which has studied Tesla extensively. "He leveraged a whole lot of information from their website, then put his spin on so that it is better." 
Source: https://japantoday.com

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