Amid Production Woes, Tesla Inc Buys Automated Machine Maker

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Tesla Inc (NASDAQ:TSLA) has acquired Perbix – a maker of factory automation equipment – presumably to ramp up the production of the Model 3. Perbix has been supplying custom machinery to Tesla for over three years now. The EV maker has not revealed how much the deal is worth.

Can Perbix help Tesla?

Last quarter, Tesla delivered only 260 Model 3 cars owing to several production side issues including slower than expected battery production at Tesla’s Gigafactory in Nevada, disagreement with suppliers and an inefficient assembly line, according to the Financial Times.

Owing to the production issues, Tesla CEO Elon Musk stated that their target of manufacturing 5,000 cars per week would now only be achieved in the first-quarter of next year. According to a filing last week, Tesla noted that they will be more focused toward the intermediate target before aiming at 10,000 units per week. Such a strategy will help the company optimize its automation and conserve spending.

Last week, Musk also hinted that automation is one of the glitches that have slowed the production of the Model 3 sedan, notes Bloomberg. Also, Musk previously said that he is keen to remove challenges being faced by Tesla factories, and the machines from Perbix could assist in that.

Musk has never been shy of revealing his plans for the factories and his efforts to make them the most efficient in the auto industry.

In a shareholders meeting last year, Musk said, “We realized that the true problem, the true difficulty, and where the greatest potential is — is building the machine that makes the machine.”

Stock and cash deal

On the Perbix acquisition, Tesla said that no one would be relocated, and that the company is looking to thrive in the Twin cities with the help of a large pool of highly skilled engineering talent, along with various colleges and universities from which the company can hire talent.

“Moving forward, we will be expanding our presence and recruiting efforts in the Twin Cities area as we continue to build the machine that builds the machine,” Tesla said in a statement, according to the Star Tribune.

A spokesman said that the company will pay stock and cash for Perbix, and that the price paid would not have any material effect on Tesla’s financial numbers, according to the Star Tribune.

Over the past few years, Tesla has made various acquisitions to boost its manufacturing capacity. Back in 2015, the company acquired a Michigan parts stamping plant, and in 2016, the company took over a German engineering firm, Grohmann Engineering, according to The Seattle Times.

Other Tesla-related news

In separate news, the Tesla director of battery engineering, Jon Wagner, is leaving the company. Wagner’s LinkedIn page suggests that he is launching a battery and power-train startup in California, according to Reuters. Wagner joined Tesla in 2013, and looked after developing technology for Tesla cars and the Powerwall.

Also, next week, Tesla will finally reveal the much-awaited semi-electric truck at the design center in Hawthrone, California. Tesla released another teaser image of a truck as part of the invitation for the event, which would be hosted by Musk at 7 p.m. Pacific time on Nov. 16.

On Monday, Tesla shares closed down 1.08% at $302.78. Year to date, the stock is up almost 42%, while in the last three months, it is down over 15%.

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