↕️ Vertical integration. How China’s BYD built a better, cheaper EV. 💰💰Manufacturing all your own components is massively capital intensive. BYD was showered with state money, and backed with securing all the raw materials needed for drivetrains and batteries since at least 2005. China also has significantly lower labor rates. 🇺🇸Tesla already boasts significant vertical integration than the Big 3 with its gigacasting, diecasting nearly 400 components of the underbody in one piece. Though capital intensive and technically challenging, imagine the cost savings and reduction in complexity in managing a supply chain of 400 components. ⚡️Tesla’s breakthrough adds to an already reduced overall component makeup of electric vehicles vs their internal combustion counterparts. Tesla’s drivetrain has about 20 moving parts to 200 in conventional drivetrains. Overall, Tesla’s Model 3 comprises 10,000 components, whereas traditional combustion engine vehicles are in the 30,000 ballpark. As we know, the less parts, the less failure points; the less complexity in manufacturing, and reduced warranty and recall costs 🥱Besides Tesla, US OEMs have been asleep at the wheel. Can they make the monumental leap to compete with BYD? 🏭 Will the US OEMs drop all ICE models, convincing the US government to fund expensive plant conversions? 🏭🏭🏭Will Ford, Stellantis and GM merge to form one mega US automaker, and insource much of its supply chain to vertically integrate? 🛻Will the OEMs drop EV sedans and focus on ICE and EV trucks? 🔮US automakers have limited options and limited time to retain the North American market. How do you see this playing out?
⚡Energy and transport analyst, strategist, and advisor⚡ Supporter of a sustainable future. The first aid provider for #hopium overdose
👉The power of vertical integration. 💪 👉Vertical integration, in principle, enables a company to control various aspects of the supply chain, manufacturing process, and distribution channels, leading to reduced costs, growing sales, and maximizing profits by improving business operations. 👉To put it in layman's terms, by eliminating middlemen companies can cut supplier margins, while also gaining better control over their supply chain. 👉But vertical integration has some disadvantages like high capital requirements and, the risk of increased organizational inefficiency (paradoxically), if handled unwisely, vertical integration can be catastrophic to a company. 👉Chinese company BYD is the world's first fully vertically integrated EV maker. 1️⃣ 👉Vertical integration is also a dream of Elon Musk's, by the way. According to Elon Musk, #Tesla needs greater vertical integration to manufacture an EV below $25k. 😊 👉#Tesla announced in 2020 that it would be getting spodumene to make lithium from its own mine in Nevada. 👉Elon Musk, when will ⛏ start? 😊 👉I've made a little comparison between BYD Seal and VW ID.4 in terms of their battery-electric powertrain. 👉The BYD 8-in-1 powertrain includes the BMS, VCU, inverter, PDU, OBC-DC/DC merged into one unit, and the gearbox/e-motor in another. All components are produced in-house by BYD. 👉VW has a different approach, it gets almost everything from its suppliers. 👉Take a look at the picture below to see the details. ⬇ 👉BYD can produce very affordable, technologically advanced EVs, whether it's due to vertical integration, it's hard to say for me. 👉What do you think about it? 👉 Share if you want to spread the word 👈 #vw #byd #tesla #ev
⚡Energy and transport analyst, strategist, and advisor⚡ Supporter of a sustainable future. The first aid provider for #hopium overdose
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