Tesla's vertical integration and efficiency show why they're the leader in EVs (2024)

Supply chain issues brought on by the pandemic have been particularly challenging for the automotive sector. A global chip shortage among an onslaught of supply chain obstacles have adversely affected the entire industry. Tesla's vertically integrated strategy proved to be very advantageous when facing these supply chain challenges.

Tesla's insistence on vertical integration used to be one of the main reasons the company struggled to become profitable and reach volume production. Now, it has allowed the company to scale rapidly while the broader automotive industry is down amidst a supply chain disaster.

The conventional automotive business model has traditionally concentrated on design and final assembly while largely outsourcing to suppliers. This strategy left them extremely vulnerable to supply chain turmoil.

In the past, automakers outsourced as much as possible and mainly focused on supply chain management. In the short term, this strategy reduced production costs but in the long term, legacy automakers lost the ability to adapt, innovate and advance technology.

Automotive manufacturing has typically relied on third party suppliers which has led to supply chain contingency and reliance on external companies. This business model has been successful for a long time due to the maturity of the internal combustion engine and a lack of need for innovation.

Tesla recognized the stagnant supply chain of the automotive industry and revolutionized it by adopting a vertically integrated strategy.

Tesla is a chain of startups

- Elon Musk

In recent years, Tesla has defied the conventional business model, reducing supply chain needs and reliance on other companies.

Tesla has vertically integrated many production steps, from battery production to electric powertrain production and self-driving software. According to Tesla CEO Elon Musk, Tesla is a "chain of startups."

This strategy allowed Tesla to avoid shortages of batteries, which have hindered legacy automakers from reaching volume production of electric cars. Before legacy automakers began investing in electric vehicle manufacturing, Tesla partnered with Panasonic to build its first gigafactory to produce batteries. Now, the gigafactory ensures a reliable supply of batteries.

Lucid Motors, a newer EV automaker, has also adopted a more vertically integrated business model. CEO Peter Rawlinson says that gives them a huge advantage in the modern EV technology race.

In an interview, Rawlinson stated, “The electric powertrain cannot be bought off the shelf at a world-class standard, it is not a commodity. This is a technology race and the market doesn’t see it yet."

Tesla's in-house software development is perhaps their biggest advantage over its competitors. As a Silicon Valley born company, Tesla has never outsourced their software. They have instead developed a proprietary self-driving software that is improved by collecting data from Tesla's network of over one million beta testers.

Ford CEO Jim Farley emphasized the company's need to move away from the “catalog engineering” business model at a conference earlier this year, saying "The most important thing is we vertically integrate."

Tesla is potentially going a step further to vertically integrate their supply chain. In light of the skyrocketing prices of lithium, Tesla may plan to get into the lithium mining and refining business. Tesla is considering mining some of its own raw materials for the same reasons that they developed their own batteries, produced their own electric motors and built their own computer chip and software for autonomous driving.

Tesla's pace of innovation and lead in the industry has become clear as the traditional business model of outsourcing components and software to cut production costs is quickly becoming outdated.

Tesla's unveiling of the Cybertruck still has the community buzzing as Tesla continues to send out emails for reservation holders to configure their Foundation series Cybertruck. While you wait for that email, Tesla has released some reading material for you to get even more acquainted with the stainless steel beast.

The parts catalog is also available, and it reveals even more surprises. It also details how much future owners should be prepared to dish out if a new part is needed. We reviewed the catalog and read a former Tesla service technician’s takeaways.

Front Bumper Camera (Video)

One of the Cybertruck's most innovative features, highlighted in the parts catalog, is its front camera system. This camera, placed at the center of the front bumper confirms that the front bumper camera will contain a washer to hose down the front lens which is sure to attract some debris.

However, it also confirms a new feature, the existence of a heating element for the front camera.

Cybertruck’s bumper camera washer. �'�

You initiate the washer by tapping an icon in the camera app.

The camera also features a heater to melt snow/icepic.twitter.com/6inXFMBX14

— Not a Tesla App (@NotATeslaApp) December 22, 2023

This dual functionality is essential for maintaining visibility and functionality in various weather conditions, especially in colder climates where snow and ice can obscure the lens. The heating element prevents the build-up of frost, while the washer ensures that dirt and debris do not compromise the camera’s view.

The front camera washer is activated manually through the Camera app. When viewing the front bumper camera, there is a small icon in the corner of the video feed that activates the new washing feature.

It’s also likely that Tesla will include this front bumper camera in all future models. A revision to the Model S and Model X will contain the new front camera, and the North American version of the new Model 3 is expected to include one as well.

The Cybertruck also includes hardware 4.0, and like other models we’ve seen, the Cybertruck will only contain two front-facing cameras at the top of the windshield.

Windshield and Wiper Blade: Pricing and Practicality

The Cybertruck's massive windshield, priced at $1,900, has garnered attention for its size and cost. Its replacement, possibly requiring specialized techniques, reflects the vehicle's unique design. The wiper blade, priced at $75, has been humorously noted for its size but is essential for maintaining clear visibility in adverse weather.

Shatterproof Windows and Powered Frunk

The Cybertruck's side windows are shatterproof, priced between $200-$260, enhancing the vehicle's safety profile. The powered frunk, another innovative feature, offers added convenience and storage at approximately $2,845. Since the Cybertruck uses two gigacasting, the front and rear fenders will also be individually available. For the rear fenders, this is significantly different than most cars, as the rear fenders are usually built as part of the frame of the vehicle.

All-Terrain Tires and Suspension System

Equipped with 35" All-Terrain A/T tires (Goodyear Wrangler Territory RT), priced at $470 each, the Cybertruck is ready for rugged terrains. This choice in tires underscores the vehicle's off-road capabilities. Although not detailed in terms of cost, the suspension system is expected to match the vehicle's high-performance standards and be adaptable to varying driving conditions.

Rear Drive Unit: Engineering Excellence

A former Tesla employee, Anthony Spina, reviewed the catalog and provided an in-depth part-by-part breakdown. The rear drive unit, especially in the Tri-Motor Cybertruck, showcases Tesla's engineering prowess. Spina's insights reveal a 48-volt oil pump system integral to the vehicle's performance. This pump is vital in power distribution and thermal management, ensuring the motors operate efficiently under various conditions.

Better Phone Key Support

A lot of what makes the parts in the Cybertruck interesting is that they likely lay the groundwork for future Tesla models, much like the Model 3 did for the Model Y and new Model S and X.

It looks like the Cybertruck will now have seven Bluetoooth Low Energy (BLE) sensors around the vehicle, which is more than other models. Using a form of triangulation, this should be better at detecting where the driver’s phone is in relation to the car.

Since the car’s driver profile can be tied to a specific phone through Bluetooth Priority Device, this helps improve various features, including, better unlocking, setting the correct driver profile and connecting Bluetooth audio to the correct device.

SiriusXM Hardware

The Cybertruck is a mix between Tesla’s luxury line of the Model S and X and their economy line of the 3 and Y. While it has an air suspension, a powered frunk and other features not available on the new Model 3, it doesn’t have other features available on the Model S, such as an instrument cluster. It looks like it also won’t have dedicated SiriusXM hardware, which could be disappointment to some future owners. Hopefully Tesla plans on rolling out a streaming version of SiriusXM soon.

Concerns Over Supply Chain and Parts Availability

A looming concern for Cybertruck owners is the availability of replacement parts. Tesla's history of long wait times for parts, coupled with the Cybertruck's unique stainless steel construction, makes the efficiency of the supply chain a critical factor. Ensuring a consistent supply of components will be pivotal for Tesla to meet maintenance and repair demands.

The Tesla Cybertruck, with its array of innovative features, represents a significant evolution in the EV market. The insights derived from users like Spina and others offer a glimpse into a vehicle that is futuristic not only in design but also in functionality. Now, get studying while you wait for the delivery email from Tesla.

Tesla’s latest software update, version 2023.44.30.4. improves Tesla maps by integrating icons for traffic lights, stop signs and more directly onto the map.

The new icons help drivers be more aware of what their route looks like and what’s coming up next, potentially warning them of hidden stop signs or speed cameras.

All Icons And Their Meanings

There’s a lot more to this feature than just displaying traffic lights and stop signs. Tesla is displaying a large array of various conditions. According to Greentheonly, Tesla is displaying up to 11 different icons on its maps. The various icons you may see include:

Average Speed Camera - Instead of recording your speed at a specific moment in time, these systems use two or more cameras to determine your average speed between two points. If your average speed is higher than the speed limit, then you were speeding and may be ticketed.

Caution Lights - It’s not clear what this icon represents, but it may be used to identify flashing yellow lights

Construction - An icon that alerts you of recent construction areas

Danger Zone - A danger zone is defined by local law and provided by the local government. It’s only available in select regions.

Fixed Speed Camera - Fixed speed cameras capture a vehicle’s speed at a specific location.

Mobile Speed Camera - A mobile speed camera is when a speed camera is mounted to a vehicle instead of being a part of the city structure.

Police - An icon that may display the location of police or police departments

Red Light Speed Camera - A red light speed camera is usually mounted on traffic lights or near the intersection. The camera aims to capture the license plate of any vehicles crossing the intersection if the light has turned red.

Speed Camera (generic) - This appears to be a generic icon for speed cameras on the map. It’s possibly used if Tesla doesn’t know the type of speed camera at the location.

Stop Sign - A traditional stop sign. It’d be a great addition if Tesla could include whether the intersection has a stop sign in all directions or if the crossing street doesn’t stop.

Traffic Light - A traffic light with more than one light

The actual icons available and displayed are dependent on your region. Not all icons are available in all regions.

Data and Requirements

Unfortunately, this feature is not available to everyone. It’s limited to specific regions where the data is available (check out our release notes to see if it’s available in your region). However, it also requires owners to subscribe to Tesla’s Premium Connectivity service at $10/month in the US. Contrary to some other information going around, this feature does not require the latest map data.

Although it does require drivers to have Online Routing enabled to view this new data. To activate or see if you have online routing enabled, you can go to Controls > Navigation and confirm Online Routing is turned on.

While Tesla can determine traffic lights and stop signs using machine learning, they’re likely buying this additional data through an existing provider, which is why they’re requiring Premium Connectivity to use it.

How and When Icons are Displayed

The new icons are only displayed along your route and not on adjacent streets. This helps keep the display clean and easy to read, however, it could be useful to know where other traffic lights and stop signs are located when trying to find a faster route.

The icons on the map also disappear as you approach the item. So any traffic lights or speed cameras you recently passed are no longer displayed.

Tesla will also warn you about upcoming speed cameras above the next turn module.

Future Enhancements

Besides enhanced awareness of your surroundings and upcoming situations, these icons could also be used to aid in driving directions. Navigation system directions could sometimes be clearer and knowing where stop signs and traffic lights are could be an aid used in voice guidance. For example, instead of saying turn left onto Main St, it could use a traffic light as guidance and say turn left at the traffic light, or your destination will be on the right after the stop sign.

This is not something Tesla currently does, but this information leaves the door open for future enhancements.