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

By Gabe Rodriguez Morrison
Tesla's vertical integration and its competitors
Tesla's vertical integration and its competitors
Not a Tesla App

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.

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Tesla FSD V13 Makes Big Improvements Around Emergency Vehicles, School Buses and Speed Zones [VIDEO]

By Karan Singh
HABiBtheDWEEB / bilalsattar

Tesla’s FSD V13.2.2 continues its rollout to the HW4 fleet, now complete with holiday goodness that makes it available to all HW4 vehicles. While FSD V13 is capable of some incredible feats, such as three-point turns, there are some additional capabilities Tesla hasn’t talked about yet.

Emergency Vehicle Handling

First up, better handling for emergency vehicles. While Tesla works on gathering audio data to make emergency vehicle detection even better, Tesla improved how it handles emergency vehicles with FSD V13.

FSD previously had issues handling emergency vehicles - sometimes pulling over and stopping on V12, other times requiring driver intervention to do the job. This led to lots of user interventions when an emergency vehicle was detected. Ensuring you’re out of the way of an ambulance can save precious seconds - which is enough to save lives.

V13 now does a much better job of pulling overly safely to the side for emergency vehicles. Check out the video below of FSD pulling the vehicle over to the side of the road.

School Buses

Another issue that FSD had trouble handling previously was school buses. Previously, FSD would ignore the stop sign and flashing lights and attempt to drive around the bus.

School buses often required driver intervention, but it seems Tesla has dedicated time to training FSD V13 to handle them properly now. Check out this post of FSD now successfully stopping and waiting for a school bus.

Speed Zone Handling

Reduced speed zones, including school zones, have had mediocre handling by FSD in previous versions. Now, some initial speed zone handling has arrived in V13.2. However, while it does handle some speed zones with blinking signs, it doesn’t necessarily handle all speed zones. For now, while Supervising, drivers will need to make sure their vehicles don’t exceed the speed limit, especially in school zones. In the meantime, look at this speed video of the vehicle handling a speed zone with FSD V13.

Camera Cleaning

As part of V13, Tesla included some interesting features addressing hardware - namely camera cleaning, The initial changelog was slightly vague: “Improved Camera Cleaning” and nothing else.

It turns out this actually refers to the camera heating elements around the vehicle, including those around the B-Pillar. According to FSD engineer Yun-Ta Tsai, this is far more complex than just heating the camera up.

Tesla Addresses Cybertruck Tonneau Cover Leaks with New Rubber Seals

By Karan Singh
The new Rubber Seal on the Aero Flap
The new Rubber Seal on the Aero Flap
theMONK11/Reddit

The Cybertruck features an automatic tonneau that lets you lock in valuables. It rolls back and forth along a track and is somewhat water-resistant. Tesla never said that the tonneau would be waterproof, but many owners have encountered a lot of water flowing into their tonneau covers.

The place where the glass roof meets the plastic strip - the aero flap- seems to be the location where most of the water gets in, and this has been noted by many as a constant source of leaks - while the rest of the bed stays mostly dry.

Tesla has attempted to fix this by adding additional slats to the tonneau, which ensures that there are slats left over underneath the aero cover, thereby providing some additional water resistance. However, it looks like they’re doing more now to prevent these leaks. 

New Rubber Seals

Tesla intends to issue a service code - the term they use for service bulletins to fix common problems - for this particular issue. This service code will include the removal of the old aero flap and the installation of a new aero flap that has additional rubber seals - similar to the ones used on windows. Thanks to theMONK11 on Reddit for catching this and providing the photo.

The service code hasn’t gone live yet, so it looks like Tesla is only testing this new part for owners who have complained about excessive water intrusion. We’ll likely see this new flap, with the additional rubber seals, become a standard part on newly built trucks to resolve this issue.

For everyone else, you’ll need to put in a service ticket with Tesla, but we would recommend waiting a few weeks before doing so. That will give them time to finalize the process and have the new part sent around to service centers across North America. Given that this isn’t a critical issue to the functionality of the vehicle, Tesla likely will not issue a recall for this - so it’ll be up to owners to create a service ticket and have the new applique installed.

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