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Tesla’s streamlining efforts are a secret weapon against rival automakers
Tesla’s rise over the years from an upstart electric sports car maker to the world’s most valuable automaker by market cap is remarkable. Tesla’s lead in the electric vehicle sector continues to grow technology-wise, and the company is also catching up to the world’s veteran carmakers when it comes to its business.
Tesla, for example, has accelerated the timeline for turning cash into product and back to cash, allowing the company to commit more of its resources for investments in its upcoming projects. Tesla’s net profit increased over sevenfold in the year ending in the January to March quarter to $3.3 billion. That’s not far behind Toyota, which posted $3.93 billion.
As noted in a Nikkei Asia report, Tesla’s cash conversion cycle fell to minus 15 days in fiscal 2021. This was the first time that Tesla entered the negative territory since starting the mass production of the Model S back in 2012. Automakers typically require a large amount of working capital on hand to operate. Nikkei noted that a negative cash cycle eliminates this need, as it allows the company to invest its money instead.
Tesla’s cash conversion cycle of minus 15 days is quite a rare feat. Even auto juggernaut Toyota has a cash conversion cycle of 31 days, while Volkswagen has a cycle of 74 days excluding financial operations. Ryosuke Izumida, an analyst at financial services provider Monicle, noted that Tesla is extremely efficient at collecting revenue.
“It almost runs like a built-to-order business, with cash already on hand before starting production,” Izumida said.
What is quite remarkable is that Tesla tends to not sit on its laurels, with the company improving its cash cycle even further by cutting its inventory turnover to 45 days. This became possible through an aggressive streamlining of parts and its vehicles’ assembly process. As a result, Tesla posted a gross profit margin of 26.5% for its automobiles in fiscal 2021. In comparison, Toyota logged 16.7%, while Volkswagen posted 18.7%.
-->Tesla’s streamlining efforts are not only reflected in the company’s financials. The design of the company’s vehicles themselves is optimized for streamlining as well. The Model 3 and Model Y, which comprise over 90% of Tesla’s total vehicle production, features a minimalist interior centered on a massive touchscreen that replaces traditional meters and buttons.
Nikkei noted that Tesla’s electric cars, thanks to their streamlined design, require far fewer electronic control units (ECUs), which are responsible for steering and stopping vehicles. Typical vehicles utilize about 50 to 70 ECUs, and luxury cars could have about 100. Since Tesla uses fewer components, the need for wiring decreases, saving weight and production costs.
The company’s use of megacasts from the company’s custom Giga Press machines also allows Tesla to build complex components in one casting. Conventional electric cars are estimated to require about 20,000 parts, while gasoline-powered cars require about 30,000. Tesla, however, is believed to have reduced this number further to just about 10,000 parts per vehicle.
Electric vehicles are becoming more mainstream, but it will not be easy to overtake Tesla. More than its sleek cars and rockstar CEO, Tesla’s secret weapon against upcoming rivals is its aggressive streamlining — from its business strategies to the smallest components of its premium electric cars.
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News
Tesla’s new Holiday perk is timed perfectly to make FSD a household name
Tesla AI4 owners get FSD (Supervised) through Christmas, New Year’s Eve and well into the post-holiday travel season.
Tesla quietly rolled out a free Full Self-Driving (Supervised) trial for roughly 1.5 million HW4 owners in North America who never bought the package, and the timing could very well be genius.
As it turns out, the trial doesn’t end after 30 days. Instead, it expires January 8, 2026, meaning owners get FSD (Supervised) through Christmas, New Year’s Eve and well into the post-holiday travel season. This extended window positions the feature for maximum word-of-mouth exposure.
A clever holiday gift
Tesla watcher Sawyer Merritt first spotted the detail after multiple owners shared screenshots showing the trial expiring on January 8. He confirmed with affected users that none had active FSD subscriptions before the rollout. He also observed that Tesla never called the promotion a “30-day trial,” as the in-car message simply reads “You’re Getting FSD (Supervised) For the Holidays,” which technically runs until after the new year.
The roughly 40-day period covers peak family travel and gatherings, giving owners ample opportunity to showcase the latest FSD V14’s capabilities on highway trips, crowded parking lots and neighborhood drives. With relatives riding along, hands-off highway driving and automatic lane changes could become instant conversation starters.
Rave reviews for FSD V14 highlight demo potential
FSD has been receiving positive reviews from users as of late. Following the release of FSD v14.2.1, numerous owners praised the update for its smoothness and reliability. Tesla owner @LactoseLunatic called it a “huge leap forward from version 14.1.4,” praising extreme smoothness, snappy lane changes and assertive yet safe behavior that allows relaxed monitoring.
-->Another Tesla owner, @DevinOlsenn, drove 600 km without disengagements, noting his wife now defaults to FSD for daily use due to its refined feel. Sawyer Merritt also tested FSD V14.2.1 in snow on unplowed New Hampshire roads, and the system stayed extra cautious without hesitation. Longtime FSD tester Chuck Cook highlighted improved sign recognition in school zones, showing better dynamic awareness. These reports of fewer interventions and a more “sentient” drive could turn family passengers into advocates, fueling subscriptions come January.
Elon Musk
Elon Musk predicts AI and robotics could make work “optional” within 20 years
Speaking on entrepreneur Nikhil Kamath’s podcast, Musk predicted that machines will soon handle most forms of labor, leaving humans to work only if they choose to.
Elon Musk stated that rapid advances in artificial intelligence and robotics could make traditional work unnecessary within two decades.
Speaking on entrepreneur Nikhil Kamath’s podcast, Musk predicted that machines will soon handle most forms of labor, leaving humans to work only if they choose to.
Work as a “hobby”
During the discussion, Musk said the accelerating capability of AI systems and general-purpose robots will eventually cover all essential tasks, making human labor a choice rather than an economic requirement. “In less than 20 years, working will be optional. Working at all will be optional. Like a hobby,” Musk said.
When Kamath asked whether this future is driven by massive productivity growth, Musk agreed, noting that people will still be free to work if they enjoy the routine or the challenge. He compared future employment to home gardening, as it is something people can still do for personal satisfaction even if buying food from a store is far easier.
“Optional” work in the future
Elon Musk acknowledged the boldness of his claim and joked that people might look back in 20 years and say he was wrong. That being said, the CEO noted that such a scenario could even happen sooner than his prediction, at least if one were to consider the pace of the advancements in AI and robotics.
-->“Obviously people can play this back in 20 years and say, ‘Look, Elon made this ridiculous prediction and it’s not true,’ but I think it will turn out to be true, that in less than 20 years, maybe even as little as ten or 15 years, the advancements in AI and robotics will bring us to the point where working is optional,” Musk said.
Elon Musk’s comments echo his previous sentiments at Tesla’s 2025 Annual Shareholder Meeting, where he noted that Optimus could ultimately eliminate poverty. He also noted that robots like Optimus could eventually provide people worldwide with the best medical care.
Elon Musk
Elon Musk reiterates why Tesla will never make an electric motorcycle
Tesla CEO Elon Musk preemptively shut down speculations about a Tesla road bike once more.
Tesla CEO Elon Musk preemptively shut down speculations about a Tesla road bike once more, highlighting that the electric vehicle maker has no plans to enter the electric motorcycle market.
Musk posted his clarification in a post on X.
Musk’s reply to a fun AI video
X user @Moandbhr posted an AI video featuring the Tesla CEO on the social media platform, captioning it with “Mr. Elon Musk Just Revealed the Game-Changing Tesla Motorcycle.” The short clip depicted Musk approaching a sleek, single-wheeled vehicle, stepping onto it, and gliding off into the distance amid cheers. The fun video received a lot of traction on X, gaining 3.1 million views as of writing.
Musk replied to the post, stating that a Tesla motorcycle is not going to happen. “Never happening, as we can’t make motorcycles safe. For Community Notes, my near death experience was on a road bike. Dirt bikes are safe if you ride carefully, as you can’t be smashed by a truck,” Musk wrote in his reply.
Musk’s Past Comments on Two-Wheelers
Musk also detailed his reservations about motorcycles in a December 2019 X post while responding to questions about Tesla’s potential ATV. At the time, he responded positively to an electric ATV, though he also opposed the idea of a Tesla road-going motorcycle. Musk did state that electric dirt bikes might be cool, since they do not operate in areas where large vehicles like Class 8 trucks are present.
-->“Electric dirt bikes would be cool too. We won’t do road bikes, as too dangerous. I was hit by a truck & almost died on one when I was 17,” Musk wrote in his post.
Considering Musk’s comments about dirt bikes, however, perhaps Tesla would eventually offer a road bike as a recreational vehicle. Such a two-wheeler would be a good fit for the Cybertruck, as well as future products like the Robovan, which could be converted into an RV.
Tesla’s new Holiday perk is timed perfectly to make FSD a household name
Elon Musk predicts AI and robotics could make work “optional” within 20 years
