What is the production organization between Tesla factories and parts companies

The main method of production organization between Tesla factory and component companies is vertical integration. Vertical integration means that a company controls multiple production links in the supply chain, from raw material procurement to the manufacturing and distribution of the final product, without relying on external suppliers. Tesla has adopted a vertically integrated production model, producing components and assembling them into complete electric vehicles through its own factories.

Tesla's production is organized differently than traditional automakers. Traditional automakers usually adopt a division of labor production model, dividing the car manufacturing process into multiple stages, with different companies focusing on different parts, and then assembling the parts into the final product through a cooperative relationship. Tesla, on the other hand, chooses a vertically integrated production model, controlling the entire supply chain itself, from design, research and development to production, in order to ensure consistent product quality and production efficiency.

By vertically integrating the production organization, Tesla is able to better control the production process and improve production efficiency and product quality. In addition, Tesla is able to innovate and improve more flexibly, respond quickly to market demand, and reduce its dependence on suppliers, minimizing potential risks and costs.

In short, the way production is organized between Tesla's factories and component companies is vertically integrated, meaning that Tesla itself controls the entire supply chain, from raw material sourcing to manufacturing and selling the final product.