Tesla Inc., the revolutionary car manufacturer focused on sustainability, has developed into a gold standard for sustainability initiatives, and is the most valued car company in America. How have they created such quality products, while being sustainable and catering to a mass consumer market?
The key, it seems, is a vertically integrated business. Almost every part of their vehicles are manufactured in-house. They have strict control and oversight with all their suppliers, something few other major companies can claim. Having a short supply network allows Tesla to maintain its mission for sustainable energy. While vertical integration may make it harder to cater to a mass market cheaply, their Gigafactory in Nevada allows them to mass produce lithium ion batteries cost effectively.
Can other companies take the example of Tesla, and reign in their own sprawling supply chains?
There are drawbacks to this model of integration, is Tesla just one of the few that can pull it off?
Source:
https://www.wsj.com/articles/panasonic-will-bet-big-on-gigafactory-1452189826
https://hbr.org/2020/03/a-more-sustainable-supply-chain
https://www.tesla.com/ns_videos/tesla-impact-report-2019.pdf