Tesla buys its supplier and maker of automated manufacturing systems

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Tesla has acquired one of its long time suppliers and maker of highly-automated manufacturing equipment, as the company looks to overcome Model 3 production challenges.

Minnesota-based Perbix Machine Company, who’s been a supplier of Tesla for over three years, will be paid for with shares of Tesla’s common stock. The company has been supplying Tesla’s Sparks, Nevada-based Gigafactory and the Fremont factory with manufacturing equipment, including automated tools for production of drive units for its fleet of electric cars. Details of the acquisition were revealed in Tesla’s latest Securities and Exchange Commission filing.

The Silicon Valley-based electric car maker added a series of new job postings to its careers page, including a role for a CNC Lathe Machinist, Electrical/Mechanical Machine Builder, and service technicians to be based in Minneapolis.

This isn’t Tesla’s first manufacturing acquisition. Tesla purchased a Michigan tool and die stamping plant in 2015 and Germany’s Grohmann Engineering in 2016. With goals to “build the machines that build the machine”, CEO Elon Musk explained that the acquisitions were meant to drive exponential improvements in production speed and quality of output, while lowering overall vehicle production costs.

It’s not clear how Tesla will handle Perbix’s existing contracts with other businesses, as the company looks to integrate its new automation partner into its workflow. One might recall an issue faced by Grohmann’s founder and Musk, after the two reportedly clashed over disagreements on how to best manage existing client relationships following Tesla’s acquisition.

As Tesla sets its sights on reaching volume production in 2018, the purchase of Perbix can be seen as a crucial element in the company’s overall strategy to automate production, as much as possible, and minimize human involvement.

Tesla Model 3 production is expected to reach 5,000 units per week in the first quarter of 2018, but achieving its originally planned 10,000 units produced per week “sometime in 2018” still remains unclear.

 

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