Tesla Motors Inc is expanding its products offerings and also improving the speed at which it makes them. The firm is bringing more and more manufacturing in-house, and now it plans to bring second-row seats of Model X in-house. The firm made that reveal as part of its earnings report for the third quarter.
Model X seats hard to make
Tesla CEO Elon Musk told investors in August that making seats is a sculptural work of art, but getting it right is very tricky, so it was difficult to make the seats. Making seats for Model X was such a hard task that it led Musk reduce Tesla’s delivery forecast from 55,000 to 50,000 that month, the report said. This led many to question Musk’s ability to meet his ambitious plans.
Addressing the issue, Musk said in a conference call on Tuesday that the firm has “substantially in-sourced” the seats at this point, and was producing its own seats. Musk has always preferred doing things on his own as much as possible, for instance making the largest battery factory so that the production could be streamlined and costs could be reduced to make its affordable Model 3 a reality.
On being asked over the rising costs of the automotive industry, Musk said Tesla Motors Inc is becoming more capital-efficient. “We believe that companies add value by doing hard things,” said Musk. “Not outsourcing those hard things to other people, because then they deserve the value.” Australia’s Futuris Group, which is a seat supplier, has also set up a shop in Newark close to Tesla’s factory in Fremont.
Tesla already using Gigafactory
Meanwhile, Tesla is already assembling batteries of use to utilities and building owners at its huge battery factory outside of Reno, Nevada called the Gigafactory, the firm said Tuesday. Tesla plans of selling batteries that could be plugged into the power grid, connected to buildings or paired with solar panels, the firm said earlier this year.
At times, when grid electricity rates are high, the business and home owners can put Tesla’s batteries to use, thus, lowering their power bills. Utilities can make use of the batteries for operating grids in a smooth manner, and also avoid building additional expensive and dirty power plants.
For the last quarter, the firm posted a loss of 58 cents a share versus analysts’ estimate of 56 cent a share. The stock was up over 9% at 7:59 p.m. New York time.
On Tuesday, Tesla Motors Inc shares closed down 2.54% at $208.35. Year to date, the stock is down over 6% and in the last one-month, it is down almost 16%.