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Since it was founded in 2003, Tesla has become the premier electric vehicle (EV) manufacturer globally. Tesla vehicles offer drivers access to a unique blend of comfort, style, technology, and performance.

Some have been critical of Tesla’s supply chain due to concerns about low sustainability scores. Despite these concerns, EVs such as those produced by Tesla generate far fewer contaminants than combustion engine vehicles. As a result, electric vehicles have gained a strong foothold in both the private transportation and supply chain logistics sectors.

While there are many attributes that differentiate Tesla from other EV manufacturers, one of the most notable is its supply chain. Tesla and its polarizing CEO, Elon Musk, knew that producing some of the most advanced vehicles on the market would require them to rethink traditional automotive supply chain practices.

For years, Tesla has been extremely secretive about where it sources its manufacturing materials from. This secretiveness has been fueled by concerns that other EV manufacturers may attempt to buy up essential materials or gain insights into Tesla’s processes.

Despite Tesla’s best efforts, the identities of a few of its most important suppliers have been uncovered. These suppliers include:

The suppliers listed above provide materials such as nickel, cobalt, lithium, and other specialized resources. There is plenty of speculation regarding where Tesla acquires other vital materials, but this information has not been confirmed. A few worthy mentions of possible Tesla suppliers include Garmin Ltd., Panasonic, and Vystar Corp.

It is unclear if Tesla’s decision to guard details regarding where it sources its materials contributed to the EV manufacturer’s meteoric rise. However, this strategic choice likely helped Tesla weather pandemic-related supply chain challenges far better than its counterparts.

Musk has repeatedly expressed interest in internalizing the manufacturing of key Tesla components, including batteries and semiconductor chips. In fact, Tesla actually began doing so in 2020. Tesla’s chips are unique in that they are not made purely of silicon. Instead, they incorporate silicon carbide, a relatively new material.

Tesla has long produced its own charging equipment as well. This equipment includes both in-home charging tools and its supercharger stations. All Tesla electric motors are also manufactured in-house.

As well, the company has started to manufacture its own batteries, as promised by Musk. However, it has only manufactured enough of its “4680 cell” batteries to power approximately 1,200 Model Ys, according to Reuters. This lack of volume is indicative of the inherent challenges associated with producing high-performance batteries at scale.

Specifically, Tesla is attempting to employ a manufacturing process known as dry electrode coating. Since this dry electrode coating is so new, Tesla must design and create its own factory equipment to perform this innovative process.

If Tesla can overcome this hurdle and begin efficiently mass producing its 4680 cell batteries, the EV manufacturer can drive down the cost of its vehicles. Increasing accessibility to electric vehicles will improve adoption rates and encourage more drivers to make the switch from gas-powered cars to sustainable alternatives.

The 4680 cell battery will purportedly increase the range of Tesla’s EVs by a significant amount as well. It already has some competition, though, from other battery manufacturers such as Our Next Energy (ONE). A Tesla Model S that was equipped with ONE’s Gemini battery reportedly obtained a staggering 752-mile range during a road test.

Tesla’s journey to the top has by no means been a storybook affair. The auto manufacturer has had to overcome more than its fair share of challenges since the first Roadster rolled off the line in 2008. Admittedly, some of these hurdles were self-inflicted, whereas others were created or exacerbated by unprecedented events like the global pandemic.

Some of the barriers that Tesla has encountered and successfully navigated include the following:

By far, the biggest challenge that Tesla has encountered in recent years is a widespread semiconductor chip shortage. As a highly advanced platform, Tesla EVs require far more semiconductor chips than your entry-level gas-powered automobile. Despite this fact, Tesla navigated the semiconductor chip shortage better than most auto manufacturers.

Tesla accomplished this feat in several ways. First, the company elected to deliver some vehicles without USB ports, Bluetooth functionality, and other convenience features. Additionally, Tesla manufactured some vehicles without amenities like lumbar support or radar sensors.

As noted earlier, Tesla also manufactures some semiconductor chips in-house. Musk’s car company has the ability to rewrite its vehicle software as well, which allowed it to substitute alternative options for its regular chips. This high degree of flexibility allowed Tesla to minimize disruptions to vehicle production while some other manufacturers had to shut down operations altogether.

Tesla’s massive 5.3 million square foot manufacturing facility is located in Fremont, California. California has long been the home of world-class creativity and innovation. However, much of this innovation was stifled during the pandemic due to the state’s extremely stringent lockdown regulations.

Ultimately, these restrictions prompted Musk to relocate Tesla’s headquarters from California to Austin, Texas. Construction is also underway on the Austin Gigafactory plant. These moves will allow Tesla to begin production and manage all operations from its Texas locations.

In the mid-2010s, Musk made several lofty promises regarding Tesla’s ability to scale up production of its entry-level Model 3. Specifically, Musk hoped to be producing 500,000 Model 3s per year by 2020. By 2018, it appeared that the automaker would fall well short of those predictions.

However, Tesla revisited its manufacturing and supply chain practices in order to increase the volume of vehicles it was producing. Although Tesla still did not meet its production goals, the changes that the company implemented helped make the Model 3 one of the best-selling cars globally.

Tesla’s supply chain stands out from those of other auto manufacturers due to several factors, including the following:

Tesla focuses solely on producing four models of electric vehicles — the Model 3, Model S, Model X, and Model Y. Most other major manufacturers produce ten or more different vehicle models for sale in the U.S., including hybrid models and gas-fueled vehicles. They also offer alternative products internationally.

By limiting its lineup to just four vehicles, Tesla can more efficiently manage materials sourcing and supply chain processes.

Tesla’s manufacturing facility is significantly more agile than many of its competitors. The company also produces several of its own components, which simplifies its supply chain. As a result, Tesla is able to respond to unexpected supply chain challenges more effectively.

During the pandemic, Tesla’s highly experienced software management team was able to rewrite existing software so that it would be compatible with substitution semiconductor chips. This recoding reduced the impact of the semiconductor shortage and allowed the company to maintain relatively high vehicle production levels.

Is Tesla’s supply chain perfect? Absolutely not. However, it is one of the most robust, agile, and resilient supply chains in the automotive manufacturing space. As other manufacturers strive to protect business continuity by improving their own supply chains, they may be able to gain valuable insights by reviewing how Tesla sources materials. 

Image Credit: BoJack / Shutterstock.com

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