Tesla retreats from next-generation ‘gigacasting’ while competition intensifies: Report

Tesla has veered away from its ambitious plans for next-generation gigacasting, a new manufacturing technique, Reuters reported citing sources familiar with the matter.

This decision is Tesla's attempt to adapt to a shifting market landscape marked by declining sales and heightened competition.

Tesla had been at the forefront of gigacasting innovation, leveraging massive presses with immense clamping pressure to die-cast substantial portions of a vehicle's underbody.

However, despite its pioneering efforts, the company has abandoned its pursuit of manufacturing the underbody in a single piece.

Instead, it will adhere to its established method of casting underbodies in three segments, comprising gigacasted front and rear sections and a midsection crafted from aluminium and steel frames, sources disclosed.

The reversal from one-piece gigacasting represents a major spin around for Tesla, which comes while the company is looking for cost-saving measures in the face of softer global demand for electric vehicles (EVs) and escalating competition, from Chinese EV manufacturers like BYD.

Tesla's downsizing efforts, including workforce reductions and executive departures, further underline its realignment.

Experts highlight Tesla's prioritisation of developing self-driving capabilities over aggressive EV sales growth as a fundamental shift in its strategy.

The decision to halt one-piece gigacasting comes before Tesla's announcement in late February regarding the cancellation of the much-anticipated Model 2, a budget-friendly vehicle slated to utilise this advanced manufacturing process.

Instead, Tesla unveiled plans for more accessible vehicle offerings, opting for existing platforms and production lines.

However, specifics regarding these new models and their pricing remain undisclosed, with CEO Elon Musk declining to provide further details during an investor call.

While Tesla has shelved the Model 2 project, it continues to leverage the small-vehicle platform for developing a self-driving robotaxi, indicating a shift towards autonomous mobility solutions.

Suppliers involved in the gigacasting operations are reportedly adapting Tesla's three-piece process for the next-generation vehicle, reflecting a strategic repurposing of resources.

Gigacasting, while offering long-term cost efficiencies, demands upfront investments and intricate development processes.

Tesla's move towards a more conventional manufacturing approach is seen as a realistic move to avoid potential delays and capitalise on existing resources.

Industry analysts noted the challenges Tesla has historically faced in launching complex vehicles on schedule, citing the delayed release and pricing discrepancies of the Cybertruck as a case in point.

(With inputs from Reuters)