The “first principle” that has been fired up by Musk roughly means solving essential demands from the perspective of requirements. Yes! I did not make a mistake. It means starting from the requirements and then solving the essential demands.
For example, Tesla’s mission is to “accelerate the transition of the world to sustainable energy.” Therefore, Tesla naturally needs to have an influence in the world’s largest consumer market for cars. And its essential demand is to make crazy money by mass-produce electric cars at a relatively low price and with ultra-high cost performance, while reducing costs and increasing production capacity as much as possible, which is the most “S3XY.”
Compared with Model S’s slightly excessive material usage, the various cost-saving operations of Model 3 are surprising, and Musk once admitted that the hardware of Model X was too complex, especially the rear door. In contrast, Model Y is very conventional, except for one thing.
Although it still inherits Tesla’s usual “public beta testing” style in quality control, the behavior of substituting aluminum for steel and even replacing plastic for the body and suspension materials of Model 3 and Y makes me have to admire Tesla’s courage again and give it the title of “cost-cutting maniac.”
However, this is not all. After all, these are also common practices of many car companies. Moreover, the most interesting things are the ones that cannot be seen on the car. Today, I am going to talk about Tesla’s exclusive cost-saving secret “Giga Press.”
Its inspiration comes from the toy car on Musk’s desk.
When I was looking at those toy cars on the desk, I was thinking: damn, where is the limit of die-casting? Where is the limit of physics? Have we reached this limit? Then I found, oh, it seems that we haven’t. Hmm, very good. What will happen if the whole car is cast? They all changed their expressions! “The whole car? In that case, we need a 150,000-ton die-casting machine. That’s too scary!” What if we only make 1/3? Hmm, it doesn’t seem that crazy.
How does it relate to me how they make cars?
Actually, it does.
This one,
The difference between the two is obvious: the number of colors in the former is reduced, while each color represents an independent component.
Compared with the Model 3 on the same platform, the number of parts in the same position of the Model Y has been reduced from 70 to 2, and will eventually become 1.
What are the benefits of reducing the number of parts? It means reducing everything!
In terms of the body, the performance advantages brought by the reduction of the number of parts and the design changes are huge. 70 stamping, extrusion and casting parts are replaced by a single huge aluminum alloy casting, and the effect of turning components into a whole is considerable.
According to the introduction of Tesla China, the weight of the component has been reduced by 30% compared to the previous process. The importance of weight reduction for electric vehicles is no less important than that for performance cars. Because lightweight means improved performance in all aspects:
- Longer range
- Faster acceleration
- Better handling
- Of course, there is also a shorter braking distance
And, this lump of aluminum alloy is not only light, but also strong.
After it became a one-piece casting, can you find any differences between this one,
and this one,
Yes, the safety helmet thrown on the ground has been picked up by someone. Apart from this, the most obvious difference is that a three-dimensional reinforcement structure is added under the wheel arch, which can improve the torsional stiffness of the vehicle body, and has positive effects on the riding experience and driving feel.
One-piece molding also has a beautiful side effect. The highly integrated modular design also optimizes the stress area and transmission path of the anti-collision beam, which improves the collision safety performance by about 20%.
But at this point, there must be someone who wants to criticize. Is this such a big one-piece structure, still made of aluminum alloy? If it crashes, won’t it be scrapped directly without any possibility of body repair? Regarding this view, I fully agree, because if the fuel tank of a traditional fuel vehicle is affected during a collision, it can also be scrapped.
Finally, because the one-piece structure has no welding, bolting or riveting linkages, and there are no stamping plates with low thickness, the abnormal noise has also been well controlled. This may be an improvement that Tesla owners can truly experience and enjoy.
Casting is good news for everything (broken sound)!So why does Tesla use integrated die casting? Of course, it is to reduce costs! After all, Tesla is a commercial entity and making cars is to make money.
From the perspective of time cost, a Giga Press can finish a casting process in less than two minutes, or 80-90 seconds. It can produce 40-45 castings per hour and 1000 castings per day, without the need for heat treatment or surface treatment, and the casting products are finished as they are removed!
If you are curious about how long it takes to assemble 70 components using traditional stamping and welding (over 1000 times), I can tell you that it takes at least two hours to assemble the parts and multiple lines must be run simultaneously to keep up with production pace.
Therefore, the production line cost cannot be ignored. The traditional way of producing 70 parts requires at least 70 sets of molds. In addition to equipment machine accessories, there are also machine arms, cables, various fixtures, and equipment accessories, all of which require investment. There are approximately 300 machine arms that a casting machine can replace, with a value of approximately 50 million yuan at this level.
Furthermore, a large-scale casting machine only takes up an area of 100 square meters. According to Musk’s statement, the factory area is reduced by 30% after using a large-scale casting machine of the size of a small house. This not only means a reduction in rental costs, but also obviously greatly reduces human cost due to the simplified production line.
Regarding material costs, die casting can recycle waste materials, achieving almost 100% utilization of raw materials. A more efficient production process also means a smaller carbon footprint, reducing environmental costs.
Ultimately, the adoption of die-casting technology reduces the manufacturing cost of Model Y by 20%.
Ahem, what exactly is Giga Press?
Casting (Die Casting) is the process of pouring molten raw materials into a mold and then cooling it to obtain the desired shape. The most common analogy in life is ice cubes, where water is the raw material and the mold is the grid for shaping. You make the opposite shape to get the desired shape.
In the automotive industry, the three most common techniques for producing lightweight aluminum castings are:
- Gravity Die Casting (GDC);
- Low-Pressure Die Casting (LPDC);
- High-Pressure Die Casting (HPDC).
Gravity Casting is one of the earliest casting methods relying on the gravity of the material itself to flow into the mold. Ice cubes are the most basic forms of gravity casting.
Low-pressure casting uses pressure (usually 0.7 Bar) to fill the mold with molten metal for shaping. It has a more controllable filling speed and is commonly used for aluminum alloy wheels.
Our hero today is high-pressure casting. It pours melted metal into a pressure chamber and then pushes the piston to inject the metal into the mold. High-pressure casting can produce very large parts in large quantities at a fast pace.
The finished product has the best surface finish, uniformity, and mechanical properties among the three methods. Tesla even claims that its castings do not require machining to ensure the positioning accuracy of the installation points.
The 6,000-ton high-pressure casting machine purchased by Tesla is the first in the industry to achieve such a high technical specification. The weight of this casting machine is only over 400 tons, which refers to the clamping force applied to the mold by the hydraulic system, ensuring that the mold does not open during casting. The greater the clamping force, the greater the injection pressure and production rate.
Sharing or Monopolizing?
Of course, no process is perfect, and casting is no exception. It has its fair share of problems.
First, the stability and consistency of aluminum castings are far less than that of stamped steel plates due to the material and process characteristics. Castings need to undergo X-ray inspection to ensure quality, which is another hassle.
Secondly, aluminum castings require heat treatment to eliminate internal stress and improve material strength through changes in the microstructure. However, stress release will inevitably cause material deformation.
Imagine a car frame being twisted after heat treatment. Can you tolerate it? Even the most tolerant Tesla owners may not be able to accept this!
To address these issues, Tesla has spared no expense. Giga Press is a joint development between Tesla and Italian large-scale casting machine manufacturer IDRA under local foundry giant LK Technology. This is true integration at its finest, as expected of Tesla.
Tesla’s team was deeply involved in the design, manufacturing, and parameter setting, and had multiple patents. For example, injecting solvable aluminum alloy itself is a very complicated matter, which requires considering the parameters of each part to ensure that no turbulence is formed.
However, the most crucial thing is the exclusive aluminum alloy material used by Tesla for integrated cast car body, which is also an exclusive formula. As early as 2016, Charles Kuehmann, an alloy expert well-known in the industry, was poached by Musk from Apple to lead the material engineering team of two companies, namely SpaceX and Tesla.
And this great man is Charles Kuehmann, also known as the “Wang Shouyi Thirteen Fragrance” in the aluminum alloy industry. His master stroke at Apple was the integration of aluminum alloy fuselage. This kind of aluminum alloy has a material strength 60% higher than that of standard aluminum alloy under the same density, and it is also very beautiful. That’s why the casing of Apple computers always feels better than that of other brands.
Without the exclusive aluminum alloy material developed under his leadership, other manufacturers buying Giga Press would be of no avail. It is also because of this special aluminum alloy that the one-piece casting on Model Y does not require heat treatment to ensure sufficient strength.
Are Traditional Enterprises Stupid?
First of all, it should be stated that traditional car companies do not avoid using castings, but only avoid using such large castings. It is not because they lack technology or cannot afford it, but because they cannot use it, or in other words, it is not cost-effective.
Therefore, traditional enterprises are not so motivated to upgrade their production lines. If they cannot achieve economies of scale through mass production, car companies cannot reduce the comprehensive cost of casting process. Everyone wants to make money, so why bother with something that is difficult and unrewarding?
The car series owned by traditional car companies are dazzling, with tens of models. The adoption of all-aluminum or steel-aluminum hybrid body is only for some of their high-end models, with limited production and sales volume. In contrast, Tesla almost is the only car company in the world that sells steel-aluminum hybrid car body in the hundreds of thousands.
Moreover, one can imagine that Model S has been on the market for 9 years, and this year’s “new generation” is actually just a major redesign. It can be speculated that the product life cycle of other models is also likely to be 10 years or longer.## Who is LK Technology?
Listed on the Hong Kong Stock Exchange, LK Technology is currently the exclusive supplier of Tesla’s giant die casting machine. With the performance of its stock price increasing more than ten times in the past six months, it even received the nickname “Tesla Printer” from the capital.
LK Technology has supplied Tesla with several 6,000-ton die-casting machines, of which IDRA produced the OL 6100 CS model, and LK Technology produced the DCC 6000 version. The products of 8,000-ton (for Cybertruck) and 9,000-ton levels are also in the plan.
Die-casting machine orders involve about 15 machines, located in Shanghai, China, California and Texas in the United States, and Berlin, Germany. The machines for Tesla’s U.S. factory are provided by IDRA, a subsidiary of the LK Group in Italy.
At the exchange meeting in February of this year, LK Technology’s high-level disclosed that it will increase production capacity to continue supplying Tesla next year and is optimistic about the prospects for the entire industry demand. Tesla’s influence and flow are widely recognized, and LK Technology says some OEMs have begun to make contact.
A simple calculation can be made here. Tesla’s 2030 production capacity target is 20 million vehicles per year. Based on the calculation that the three Giga Press die-casting machines at the Shanghai factory can produce 200,000 Model Ys per year, Tesla will need 300 die-casting machines by 2030.
The die-cast parts for the front part of the lower body have been exposed, and with the battery packs using the CTC (Cell To Chassis) packaging method in the future, it is highly likely that the middle part of the body will also adopt this production method. So, ignoring the capacity of the die-casting machine, an estimated reasonable demand for 600 machines by 2030 doubled from the present number is also possible.The price of a 6,000-ton die-casting machine is reportedly at the level of 8 million euros. For 300 machines, the cost would be 2.4 billion euros, and for 600 machines, 4.8 billion euros, which is a market worth about RMB 40 billion. With a net profit margin of 15% for die-casting machines, this amounts to a net profit of 6 billion euros.
Assuming that Force Genius Technology’s business is mostly focused on die-casting machines (currently accounting for 65%), it will make an average of 600 million yuan in profits per year by 2030. Multiplying this number by the average PE of 32 in the equipment manufacturing industry yields a market value of about 18 billion yuan. From recent trends, its current market value is around HKD 14 billion, which is less than 80% of our estimate.
So if you are only considering becoming a shareholder of Force Genius now, the odds of taking off may be lower because you would be reacting too slowly. Of course, we cannot rule out the possibility that this article will generate a lot of interest and change market perceptions, leading to a surge in die-casting concept stocks like Tesla.
All for Autonomous Driving?
The article ends here, but I still want to marvel at how much Tesla values autonomous driving. As of today, Tesla’s head of autonomous driving has already been replaced up to 8 times, which can fully demonstrate how intense the competition and high requirements, and high pressure for this position.
At the same time, I also discovered Tesla’s unique and extreme engineering and product strategies, which can be understood as cultivating user habits around the scenario of autonomous driving.
*The following content is purely fictional, don’t take it too seriously.
- Model 3/Y does not have an instrument panel.
Musk’s thoughts: Anyway, autonomous driving will come sooner or later, and speed is not something we need to pay attention to.
Translation: If it’s autonomous driving, do we still need to be looking at the speed?
- Tesla’s vehicle handling is too sporty (heavy steering, too responsive, overly clear road feel).
Musk’s thoughts: Anyway, autonomous driving will come sooner or later, and it’s not like we can’t drive without it.
Translation: Those who can handle it find it enjoyable, those who can’t feel nervous, which leads to even more reliance on Autopilot.
- The whole car is almost die-cast as a single unit. Won’t the car be scrapped if it’s touched?
Musk’s thoughts: Anyway, autonomous driving will come sooner or later, and if you don’t crash, you’re good, right?
Translation: In theory, the accident rate for autonomous driving is lower, so just don’t crash, right?
Therefore, die-casting as a unique operation is the perfect opportunity to capitalize on this trend. I also discovered the logical link in Tesla’s wealth code:
Unique operation – traditional car companies are trash – SpaceX space exploration romantic blessing – Iron Man apotheosized – Tesla brand faith – skyrocketing stock price – user tolerance – continued unique operation
Such a perfect business cycle.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.