Changes to EV manufacturing to ‘significantly reduce’ cost

An overhaul in the way electric vehicles (EVs) are manufactured could disrupt the industry by drastically reducing their cost.

That’s according to Owen Edwards, head of downstream automotive at Grant Thornton UK LLP, who argues that this could lead to a domino effect as other manufacturers follow suit.

For example, Tesla’s new Global Automotive Modular Evolution (GAME), also known as the Unboxing Process, builds the car using giant castings and then assembles the vehicle in these modules.

Writing in Cox Automotive’s Insight Quarterly, Edwards says such a process has fewer production steps and lower costs than the traditional monocoque process.

“The traditional ‘monocoque’ car manufacturing process debuted by Citroen in the 1930s is not ideal for modern EVs and is expensive compared to the GAME process pioneered by Tesla for its Model Y,” he explained.

“This ‘unboxing process’ enables vehicles to be constructed in modules, consisting of a front, rear, battery and floor section, with sides and roof added as the final piece of the jigsaw.” 

He speculates that this shift in the manufacturing process could lead to a significant price drop, in turn making the Tesla Model 2 electric SUV more affordable.

This has the potential to drive up demand for EVs, making it a trend other manufacturers will likely try to capitalise on in the future.

Edwards adds that the use of gigacasting at the front and rear of the vehicle allows Tesla to not only manufacture a number of independent modules, which can then be brought to one central assembly plant, but it also removes more than 100 stamping and welding steps in the production process, which contributes to a reduction in weight and cost.

Cox Automotive’s insight director, Philip Nothard, said: “Tesla’s GAME process appears to be an ingenious way to slash the cost of manufacturing and will no doubt pique the interest of other EV OEMs. Given that private consumer demand growth for EVs is slow, any initiative or innovation contributing to them becoming more affordable for the end user should finally see them achieve price parity with ICE.”

Tesla believes that the gigacasting and modular approach to constructing a vehicle could reduce their factory carbon footprint by approximately 40% and total cost of production by 50%.

By reducing its costs and capital investment in production, Tesla has hinted that the Model 2 would eventually cost the same as its ICE equivalent.

Edwards said: “The market share of BEVs in the UK has stalled at around 16%-18% of total new vehicle registrations. The high price of BEVs has been one of the main factors putting off consumers. However, a much lower-priced BEV, such as the Tesla Model 2 and BEV, which have a price similar to or below ICE vehicles, combined with legislation such as the UK’s ZEV mandate, should ignite demand.

“What remains unclear is how legacy OEMs will react to a compelling EV priced at $25,000 (£19,500).

“Some OEMs are already starting their own GAME processes and will be able to compete in the future with Tesla. However, we have no certain outlook when this will be.”