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Tesla’s manufacturing advantage lies in legacy auto’s stranded assets
Tesla’s focus on manufacturing has solved a vast number of issues that the electric automaker has encountered in its first few years of mass-scale vehicle production. With only two operational vehicle production facilities and several more on the way, Tesla’s biggest advantage in production doesn’t necessarily come down to efficiencies and solving bottlenecks. Instead, it has to do with something completely out of its control: Legacy Auto’s stranded assets.
Large vehicle manufacturers have pumped out millions of vehicles per year in sometimes between 50 and 100, sometimes more, global facilities. Volkswagen, for example, has 136 production plants across the world. This massive production operation lead to 9.3 million VW cars being delivered in 2020, a slight decrease from the nearly 11 million in 2019. However, the COVID-19 pandemic surely wiped away some of its productivity and sales.
But Volkswagen is also in limbo, much like many other automakers. Despite being one of the world’s top brands, a decline is on the way if the German company can’t figure out its electric car software issues. Even if it does, it still has 136 production plants and only a few of them build electric cars. However, all of the company’s plants will need to be transitioned into EV production facilities, a far cry away from the current gas-powered powertrains it currently builds at 98% of its properties.
It’s not just Volkswagen
Mercedes-Benz has 93 locations in 17 countries. BMW has 31 facilities in 15 countries. Ford has 65 plants all across the world.
These plants have been everything to the world’s largest car brands for decades. While the automotive industry has been powered on petrol for 99% of the auto industry’s history, EVs are slowly but surely making their way into the picture. Eventually, with so many plants for the legacy automakers, they will all build electric powertrains. But unfortunately, what has been a strength for so many car companies in the past will soon become a burden as EVs take over market share, become more appealing and more sought after by consumers, and gas cars are few and far between because electrification has taken over. The biggest, most successful, most popular badges on vehicles worldwide will soon have a serious problem on their hands if they do not think about a plan to transition these facilities into EV manufacturing plants.
Time is of the essence
Volkswagen did complete ICE production at its Zwickau plant in Mosel, Germany, in June 2020. After the company announced that the final gas-powered engine had rolled off production lines at the plant, it then came down to training all technicians, assembly workers, and production engineers on how to deal with electric powertrains.
The company stated that 20,500 total days of training time would be given to those who hold jobs at Zwickau, giving the employees no reservations about the direction the German automaker was headed toward. The entire process of transitioning the plant took six to eight months.
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This is great, but when a company has 136 plants, that’s a lot of time, many people to train, and a lot of money to spend. Eventually, the plants that have pumped out billions of dollars worth of ICE cars will be rendered useless unless companies begin to update their hardware, train the employees, and prepare for an electric future.
Is delaying EV projects a result of stranded assets?
Companies are smart; there are plenty of reasons why these car companies have long been at the top of the industry. Knowing that the trillions of dollars that they have pumped into building a global powerhouse of production facilities could all be a waste as ICE cars are slowly being phased out is alarming, but perhaps this is why so many companies have avoided focusing on EVs: the thought of modifying so many plants is terrifying.
Nevertheless, it will need to be done eventually. But right now, especially in such a trying economic time, manufacturers are trying to save their faces and their balance sheets by keeping this narrative that EVs are not that important, that gas cars will still dominate, and that consumers should continue to buy petrol-powered machines. Manufacturers continue to push consumers in a direction, even if they know it doesn’t align with climate issues or sustainability because they know that their plants will need major updating. This takes time and money, and car companies don’t have a lot of that.
Tesla Model Y loses another rival after BMW cancels iX3’s US launch
For these legacy automakers, it makes more sense to push gas cars onto consumers and set aside any notions of an EV being a better option, simply because they haven’t made one that is worth a damn…yet.
How is this Tesla’s Advantage?
Tesla is sitting in a prime position to dominate the EV sector for years to come. It is no secret that the company’s vehicles are the highest quality electric cars on the planet; range and performance and contributed to this for several years. However, EVs are the way of the future, and while Tesla has to build new plants to build EVs, it isn’t building them at the massive scale that ICE manufacturers are building their cars. EVs are still a relatively small portion of the worldwide automotive market, and Tesla’s growth is on par with the industry as a whole, mostly because they are controlling it for the time being.
Tesla won’t have to build 136 plants. It won’t have to transition old factories that are pumping out useless powertrains. It will have to build more, but that won’t halt production altogether, especially considering the two factories it has now are handling demand without much of an issue.
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Tesla’s plants are going to be assets for centuries to come. Meanwhile, other automakers have focused on the global scaling of their vehicle fleets, only realizing that their strategically placed production plants will all be useless in a few years unless companies begin transitioning their once high-powered manufacturing facilities to EV-based production lines.
What do you think? Leave a comment down below. Got a tip? Email us at tips@teslarati.com or reach out to me at joey@teslarati.com.
The Trump Administration today made several key moves to help with the deployment of autonomous vehicles by cutting overreaching red tape that has stifled growth and innovation for years.
The moves, which were put forth by the National Highway Traffic Safety Administration (NHTSA), aim to grant temporary exemptions to at least one company currently, although that could expand in the coming months. Additionally, it will work with organizations to develop standards and a sound but efficient regulatory landscape.
Zoox is the only company mentioned explicitly by the Trump Administration in its press release announcing the new terms today. They will receive a temporary two-year exemption that will allow the commercial deployment of up to 2,500 vehicles annually for two years.
There is a potential exemption for Robomart, Inc., which “requests a temporary exemption from certain FMVSS No. 500 requirements for a low-speed vehicle operated by an ADS without a human driver onboard. NHTSA will publish a separate notice seeking public comment on its merits once the initial evaluation is complete,” the agency said.
Here are the five new terms that Secretary Sean Duffy has implemented through the NHTSA today:
- Allow Zoox to commercially deploy its robotaxis through a temporary exemption.
This temporary exemption will allow the commercial deployment of up to 2,500 vehicles annually for two years, subject to an enhanced, adaptable oversight structure that can evolve as Zoox’s technology advances. - Accelerate development of first-ever AV performance standards through a partnership with SAE Industry Technologies Consortia (ITC).
This partnership will fund a three-year, $5 million “A2SCEND” consortium, bringing together experts to gather data and accelerate creation of the first-ever AV performance standards. This project will inform a single national standard for AV safety to eliminate the patchwork regulatory landscape that has stifled innovation for years. - Publish an interim final rule that allows vehicles manufactured prior to an exemption to be eligible for a commercial deployment exemption.
This rule will modernize the application process and improve access to exemptions for innovators, including AV developers, by granting the NHTSA Administrator the discretion to apply temporary exemptions to vehicles manufactured prior to the effective date of an exemption grant. - Streamline the application process for Part 555 exemptions by updating guidance and soliciting feedback from the public.
By updating the Part 555 exemption process—which allows automakers to temporarily sell a limited number of non-compliant vehicles, primarily to test new technologies—NHTSA is aiming to create a more flexible oversight structure for exemptions and summarize recent AV framework activities, including expanded exemption pathways, streamlined crash reporting, and ongoing efforts to modernize Federal Motor Vehicle Safety Standards (FMVSS). - Establish a new Federal Docket for public feedback on NHTSA’s updated safe AV development and deployment guidance.
NHTSA is updating its technical guidance for AVs for the first time since 2017—focusing on key safety areas like emergency responder interactions, safety management systems, remote assistance, and post-crash behavior to help the industry scale up driverless deployments safely.
Additionally, the NHTSA said it has modernized some safety standards by proposing updates to:
- FMVSS 102 – Transmission shifting
- FMVSS 103/104 – Windshield defrosting and wiping
- FMVSS 110 – Tire placards
- FMVSS 135 – Braking systems
- FMVSS 101 – Controls and displays
- FMVSS 108 – Vehicle lighting
- FMVSS 111 – Mirrors and rearview display
- FMVSS 126 – Electronic stability control systems
- FMVSS 201/208 – Sun visors and warning labels
These changes aim to make the regulatory process for autonomous vehicles more streamlined and efficient, which could help the U.S. gain dominance over autonomous vehicle systems moving forward.
Elon Musk is, in many respects, one of the biggest and most influential figures in modern-day artificial intelligence.
Given that Tesla, SpaceX, and xAI are all looked at in their respective fields as leaders to an extent, each of them has a heavy influence on the future of AI, even though two of them are not thought of, at face value, as AI companies.
Musk has grand expectations for what is to come with AI, not only as a form of assistance to make human lives easier, but to make humans multiplanetary and solve some of the biggest issues that face us today. But even he is astounded by AI’s pace of progress.
He believes that in two years, AI will be so mind-blowing it might be unrecognizable.
Given that AI from 2 years ago feels so old that it should be in a museum, then obviously AI 2 years from now will be mind-blowing https://t.co/TcsKZ8o8OE
— Elon Musk (@elonmusk) July 30, 2026
This progress can be seen in a variety of ways, but perhaps the most popular way people have shown AI’s progress, especially on social media, is through an incredibly arbitrary way of watching Will Smith eat spaghetti:
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The progression in AI of Will Smith eating spaghetti (2023 – 2026) pic.twitter.com/VDv82mB5gs
— internet hall of fame (@InternetH0F) February 10, 2026
This is a great way to show people how AI is improving, especially from a perspective that examines how it can manufacture images and video from prompts. AI is an incredibly complex concept, however, and it goes much deeper than Will Smith eating Italian food.
Musk’s most widely adopted method of AI is likely Tesla Full Self-Driving, which impacts millions of people as they utilize it to increase safety with their travel. Musk has routinely pushed incredibly aggressive timelines for self-driving, especially unsupervised.
Perhaps this perspective is why he feels that things will be solved in a timeframe that is much more aggressive than most of us would think. Regardless, the progress of AI is moving fast, and it seems that Musk’s expectations for it could be high.
But if it can actually achieve full-length motion pictures and even more realistic production value, it will be hard to distinguish between reality and AI very soon.
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Tesla just officially confirmed it has built its 10 millionth car, a major milestone for the company that started producing sustainable electric powertrains less than two decades ago.
In that time, Tesla has truly revolutionized the automotive industry, disrupting the idea of what a car should be, how it should be fueled, and how it truly impacts day-to-day life.
10 million vehicles produced globally.
Congrats to all Tesla teams! pic.twitter.com/JkcraR63bs— Tesla Manufacturing (@gigafactories) July 30, 2026
Tesla achieved this feat across four production facilities: the Fremont Factory in Fremont, California, Gigafactory Shanghai in China, Gigafactory Berlin in Germany, and Gigafactory Texas in Austin, Texas.
The 10 millionth vehicle was a Diamond Black Model Y.
Over the course of the past roughly 18 years, Tesla has evolved its lineup from a sporty sedan built on a Lotus body to a lineup of various body styles, performance metrics, and other characteristics that make each one unique.
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This is an incredible achievement for a company that is young compared to what it goes up against. When Tesla entered the automotive market, Ford, GM, and Stellantis widely dominated the playing field. Since then, Tesla has caused such a disruption that these three massive brands had to scramble to create EV projects of their own.
Despite their best efforts, they have not been able to match the prowess or the effectiveness of Tesla. They are all reliant on Tesla’s charging infrastructure, their software is inferior, and their self-driving projects are elementary in comparison.
Tesla felt its fair share of growing pains over the years as well. As recent at 2019, there were complaints about build quality, paint quality, and overall luxuriousness. These things have all been improved upon through the company’s maturity, and these strides in quality have led to this 10 million vehicle production achievement, something that other small-and-scrappy EV makers will hope to accomplish one day.
Autonomous vehicle red tape gets slashed by Trump Administration
Elon Musk has a crazy prediction about AI in two years
