Who will manufacture the Tesla Model S?

Tesla motors recently announced they have agreed terms for a lease on 350,000 sq/ft of manufacturing space formally occupied by Hewlett Packard. The Palo Alto facility is intended to be the powertrain production facility with assembly of the Model S at a separate, still as yet un-announced, plant. Tesla intend to spend $100 Million of their $465 M government loan to bring 'powertrain' manufacture in-house. The huge size of the facility seems to be pegged on securing more customers like Daimler who will incorporate Tesla made battery packs and chargers into their initial run of 1000 Smart EVs.

The biggest questions about Model S production still remain. With a self imposed delivery deadline of late 2011, over 1000 orders taken and the vehicle assembly plant location still not selected, we're left to speculate about how much of the Model S Tesla is actually planning to manufacture themselves?

With the chassis and most of the body panels for the Model S being specified in Aluminum it seems highly unlikely Tesla will bring manufacture of those parts in house. Currently the Tesla Roadster, which has an Aluminium chassis, is assembled by Lotus in the UK and delivered to Tesla as a completed vehicle minus the powertrain.

The adhesive-bonded aluminium Tesla Roadster chassis is not made by Lotus but is manufactured by aluminum sub-contractor Hydro Raufoss Automotive, a division of Norsk Hydro, on the same production line as those of the Lotus Elise.

Is Tesla planning to take over the vehicle assembly role currently filled by Lotus or will another company take their place and supply a finished Model 'S' minus powertrain using the same business models as used for the Roadster? There may be the option of having a 'glider' manufactured by a large subcontractor other than Lotus but Musk has made plenty of enemies in those circles to date.

Who 'could' build it?

Canadian firm Magna are one of the largest vehicle assembly subcontractors in the automotive business but as Tesla have already sued and been counter sued by them over the ill conceived 2 speed transmission, it would seems bridges have been burnt there already. Magna already has it hands full with a deal to make Focus EVs for Ford by 2011.

Finland based Valmet have years of experience building aluminium chassis and body panels having been the main contractor for Porsche building Boxster and Cayman over the past decade, but EV rival Fisker already have a production contract for their Karma to be manufactured by Valmet and Tesla have made themselves unwelcome by suing Fisker as well. When the music stops will Tesla be left standing?

There may be an option to have the Model S chassis manufactured by Hydro much as the Roadster chassis is although there are many technical differences between the two. While the Model S is a unibody the Roadster/Elise is a very unique bonded chassis constructed primarily from aluminium extrusions.

Full aluminium unibody chassis, while more common in recent years, are still rare in the automotive business and are usually the reserve of low volume, high priced sports cars where higher manufacturing costs can be recouped. Tesla may not have that option because while the 'S' will be a low volume production vehicle, they are simultaneously attempting to make it an 'affordable' car with a monster battery pack, both strategies leaving very little room for margin.

Powertrain

Currently the Roadster battery pack and 3 phase AC motor are manufactured in Asia and shipped to California for installation into the Lotus based chassis. With the new Palo Alto facility slated to take over the battery pack assembly, with some question over whether AC motor manufacture will be brought in-house, there must be a very steep learning curve for Tesla Motors to grow from a small operation who currently manufacture nothing in-house to manufacturing the entire powertrain and chassis with their own plant and equipment in the space of the next 2 years.

Some questions must also be raised about the engineering reality of offering different sized battery pack options for the Model S. Tesla says they will offer upgrade battery options for 230 miles (370 km) or 300 miles (480 km) on the standard 160 mile (256 km) range.

While the 160 mile 'Standard' Model S will include a 42 kw/hr battery pack, the larger 300 mile battery pack will be 70kw/hr and weighs 1200lb (544 kg). There will be a significant weight difference across the range of battery sizes which may pose a challenge to the Tesla chassis engineers if the various sized packs can be “hot swapped”. Installing the larger 300 mile battery will be like putting a load into a truck - and will have adverse affects on the vehicles dynamics as it's almost double the weight of the smallest pack.

Amongst the torrent of Tesla Press Releases there is virtually no news regarding Model S production. There was a recent company blog mention that the Model S chassis would be used as a base for derivatives including a minivan, cross-over utility vehicle and a utility van for fleets although these plans must be years off given the total lack of Model S production facilities to date.

We certainly hope Tesla haven't bitten off more than they can chew and that the Model S isn't a very expensive example of EV vapourware. It will be very interesting to see them create a vehicle assembly plant and supply chain from scratch, presumably in California, and make the leap from glorified EV conversion company to full fledged auto maker within the next 24 months!