Tuesday, June 4, 2013

What TESLA’s Recent Success Means for America’s Manufacturing Comeback

With much fanfare, Tesla just announced its first quarterly profit: $11.2 million.  Why is this so significant?  Well, some core tenants of Tesla’s manufacturing process are gaining traction among manufacturers globally as they assess new opportunities in the U.S.

A lot has been written lately about America’s comeback as a manufacturing powerhouse.  While the degree to which this country will see a resurgence in manufacturing jobs is open for debate, one thing is for certain – cost efficiencies from natural gas exploration, increased labor costs abroad and new innovation in the US with regards to automation, 3D printing and many other technologies have all converged to fuel the perfect storm of opportunity.   But the how, when, and where of increasing production allocation to the US is complicated.   Tesla provides some answers.

  • Tesla is located in the heart of innovation as one recent Christian Science Monitor article pointed out.  Being near new technologies that will  benefit the specific manufacturer’s production is critical.
  • Tesla utilized abandoned auto plants for production.  Re-purposing America’s vast decaying resources from manufacturing’s bygone era is not only cost-efficient but allows companies to tap into sustainability initiatives.
  • Tesla  is able to promote the  “Made in America” feature for brand strategy.   Manufacturers continue to evaluate and assess the customer’s willingness to pay for the “Made in America” brand, and while skeptics assert there is no such thing as a patriotic dollar, customers continue to prove that there is a demand for domestically produced products.  

It will be interesting to watch how many other manufacturers turn to Tesla’s model for inspiration and future planning.

- The IIR Alternatives Team


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