Casting helped Tesla remove half the factory

Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

1. 49:08

   I think you scaled Tesla about 10x while you were there in terms of sales. I'm curious what goes into the physical infrastructure with that velocity of scaling. My experience was in software, and it was much easier to plug in servers while you were growing. But to 10x a car company, you've got to do the obvious things that you would know. You've got to build factories. You've got to build supply chain.

2. 49:32

   You've got to build delivery. You've got to build distribution, sales. And all that stuff is physical things that have to be built. So sometimes we would creatively reinvent those things. So rather than like building service centers, we discovered that 80% of what you could repair in a service center on a car could be done in a customer's driveway. So we invented mobile service so that we didn't have to build sales or service centers anymore or as many.

3. 50:04

   and so the creativity of the team helped us bend some of these assumptions but yeah we had to build physical stuff there's no getting around building a factory if you're going to make cars you got to make you got to make a factory to make the cars but i used to think that would be sort of like the critical path but elon has shown that you can build factories in times that we would not think even possible partly because the factories are utterly simplified so compared to competition so like if you take a car factory, it's almost a mile long and it's a long rectangle. And if you sat on the 50 yard line in the middle of the factory and you looked right, you see a sea of robots welding the skeleton of the car called a chassis. And if you look left, you see a sea of humans hanging parts on that skeleton. That's called general assembly. And so Elon gave the

4. 50:55

   challenge to the management team, we have to cut 50% of that out. And we have to do this because we've got to be competitive with the Chinese. They're ultra costs advantaged right now, etc. So Doug Field, who was the head of engineering, came up with this method to replace half of the factory. And that was rather than welding the skeleton of the car, he invented, literally, and his teams invented a way to cast that.

5. 51:27

   So to pour liquid aluminum into a mold that was impossible to produce before they did this, they would take 1600 degree aluminum and mold it and allow it to cool into the form of the chassis of the skeleton of the car. So the reason that Tesla can build these factories so rapidly is because Doug and his team figured out how to eliminate half the factory. So now, yeah, you can build these things a lot faster because now I don't have to have hundreds of robots, get synced up, deliver this perfectly welded 300-piece skeleton.

6. 51:59

   Now I've got two parts that come together and I don't need that half of the factory anymore. So that means you can build factories faster. So we were just, the whole team was figuring out how do you optimize and invent to make this a reality where we could 10x a company in 30 months. And it just required incredible creativity. on the part of the people that were making that happen and inventing these new ways of doing things.

7. 52:26

   So Doug invents castings. We don't need half the factory footprint. Krem Busta and his team invent mobile service. We don't need that footprint. And we just were able to unleash growth through being really creative about changing the model. Is it true the casting problem was fixed, like, with a Hot Wheels car? Well, that was Doug's original, it's the way he communicated what was possible. He's like, I have the answer.

8. 52:58

   And he rolled a Hot Wheels car across the table. And he's like, here's the answer. Here's how we're going to get rid of half the cost and half the factory. And we're like, that's a Matchbox car. Like, of course, you can mold something as big as your thumb. But the physics of molding something the size of half of a car, the pressures that it takes to hold that aluminum in place and the mold materials that it takes so that that thing doesn't explode were impossible at the time.

9. 53:29

   Nobody had figured out how to do it before they figured out how to do it because it was literally the physics were impossible. People didn't know how to do it. So you could say that was physically impossible and be accurate, but they figured it out. And it's created an eight-year competitive advantage for Tesla because just now car manufacturers are getting into casting. And that is the whole kind of characterization of speed.

10. 53:53

    Like when you invent at that speed, you're creating these multiple-year or maybe decade-long advantages versus your competition by going after these hard technical problems.