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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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Tesla executive moves on after 13 years: ‘It has been a privilege to serve’
“It is challenging to encapsulate 13 years in a single post. The journey at Tesla has been one of continuous evolution. From the technical intricacies of designing, building, and operating one of the world’s largest AI clusters to impactful contributions in IT, Security, Sales, and Service, it has been a privilege to serve,” Jegannathan said in the post.
Tesla executive Raj Jegannathan is moving on from the company after 13 years, he announced on LinkedIn on Monday.
“It is challenging to encapsulate 13 years in a single post. The journey at Tesla has been one of continuous evolution. From the technical intricacies of designing, building, and operating one of the world’s largest AI clusters to impactful contributions in IT, Security, Sales, and Service, it has been a privilege to serve,” Jegannathan said in the post.
After starting as a Senior Staff Engineer in Fremont back in November 2012, Jegannathan slowly worked his way through the ranks at Tesla. His most recent role was Vice President of IT/AI Infrastructure, Business Apps, and Infosec.
However, it was reported last year that Jegannathan had taken on a new role, which was running the North American sales team following the departure of Troy Jones, who had held the position previously.
While Jegannathan’s LinkedIn does not mention this position specifically, it seemed to be accurate, considering Tesla had not explicitly promoted any other person to the role.
It is a big loss for Tesla, but not a destructive departure. Jegannathan was one of the few company executives who answered customer and fan questions on X, a unique part of the Tesla ownership experience.
Tesla to offer Full Self-Driving gifting program: here’s how it will work
It currently remains unclear if Jegannathan was removed from the position or if he left under his own accord.
“As I move on, I do so with a full heart and excitement for what lies ahead. Thank you, Tesla, for this wonderful opportunity!” he concluded.
The departure marks a continuing trend of executives leaving the company, as the past 24 months have seen some significant turnover at the executive level.
Tesla has shown persistently elevated executive turnover over the past two years, as names like Drew Baglino, Rohan Patel, Rebecca Tinucci, Daniel Ho, Omead Afshar, Milan Kovac, and Siddhant Awasthi have all been notable names to exit the company in the past two years.
There are several things that could contribute to this. Many skeptics will point to Elon Musk’s politics, but that is not necessarily the case.
Tesla is a difficult, but rewarding place to work. It is a company that requires a lot of commitment, and those who are halfway in might not choose to stick around. Sacrificing things like time with family might not outweigh the demands of Tesla and Musk.
Additionally, many of these executives have made a considerable amount of money thanks to stock packages the company offers to employees. While many might be looking for new opportunities, some might be interested in an early retirement.
Tesla is also in the process of transitioning away from its most notable division, automotive. While it still plans to manufacture cars in the millions, it is turning more focus toward robotics and autonomy, and these plans might not align with what some executives might want for themselves. There are a wide variety of factors in the decision to leave a job, so it is important not to immediately jump to controversy.
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Lemonade launches Tesla FSD insurance program in Oregon
The program was announced by Lemonade co-founder Shai Wininger on social media platform X.
Tesla drivers in Oregon can now receive significant insurance discounts when using FSD, following the launch of Lemonade’s new Autonomous Car insurance program.
The program was announced by Lemonade co-founder Shai Wininger on social media platform X.
Lemonade launches FSD-based insurance in Oregon
In a post on X, Wininger confirmed that Lemondade’s Autonomous Car insurance product for Tesla is now live in Oregon. The program allows eligible Tesla owners to receive roughly 50% off insurance costs for every mile driven using Tesla’s FSD system.
“And… we’re ON. @Lemonade_Inc’s Autonomous Car for @Tesla FSD is now live in Oregon. Tesla drivers in Oregon can now get ~50% off their Tesla FSD-driven miles + the best car insurance experience in the US, bar none,” Wininger wrote in his post.
As per Lemonade on its official website, the program is built on Tesla’s safety data, which indicates that miles driven using FSD are approximately twice as safe as those driven manually. As a result, Lemonade prices those miles at a lower rate. The insurer noted that as FSD continues to improve, associated discounts could increase over time.
How Lemonade tracks FSD miles
Lemonade’s FSD discount works through a direct integration with Tesla vehicles, enabled only with a driver’s explicit permission. Once connected, the system distinguishes between miles driven manually and those driven using FSD, applying the discount automatically to qualifying miles.
There is no minimum FSD usage requirement. Drivers who use FSD occasionally still receive discounted rates for those miles, while non-FSD miles are billed at competitive standard rates. Lemonade also emphasized that coverage and claims handling remain unchanged regardless of whether a vehicle is operating under manual control or FSD at the time of an incident.
The program is currently available only to Teslas equipped with Hardware 4 or newer, running firmware version 2025.44.25.5 or later. Lemonade also allows policyholders to bundle Tesla insurance with renters, homeowners, pet, or life insurance policies for additional savings.
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Tesla exec: Preparations underway but no firm timeline yet for FSD rollout in China
The information was related by Tesla China Vice President Grace Tao in a comment to local media.
Tesla has not set a specific launch date for Full Self-Driving in China, despite the company’s ongoing preparations for a local FSD rollout.
The information was related by Tesla China Vice President Grace Tao in a comment to local media.
Tesla China prepares FSD infrastructure
Speaking in a recent media interview, the executive confirmed that Tesla has established a local training center in China to support the full adaptation of FSD to domestic driving conditions, as noted in a report from Sina News. However, she also noted that the company does not have a specific date when FSD will officially roll out in China.
“We have set up a local training center in China specifically to handle this adaptation,” Tao said. “Once officially released, it will demonstrate a level of performance that is no less than, and may even surpass, that of local drivers.”
Tao also emphasized the rapid accumulation of data by Tesla’s FSD system, with the executive highlighting that Full Self-Driving has now accumulated more than 7.5 billion miles of real-world driving data worldwide.
Possible 2026 rollout
The Tesla executive’s comments come amidst Elon Musk’s previous comments suggesting that regulatory approval in China could arrive sometime this 2026. During Tesla’s annual shareholder meeting in November 2025, Musk clarified that FSD had only received “partial approval” in China, though full authorization could potentially arrive around February or March 2026.
Musk reiterated that timeline at the World Economic Forum in Davos, when he stated that FSD approval in China could come as early as February.
Tesla’s latest FSD software, version 14, is already being tested in more advanced deployments in the United States. The company has also started the rollout of its fully unsupervised Robotaxis in Austin, Texas, which no longer feature safety monitors.
Tesla executive moves on after 13 years: ‘It has been a privilege to serve’
Lemonade launches Tesla FSD insurance program in Oregon
