Most mass-market automakers still largely adhere to the same basic setup used by Henry Ford in 1913 to make the Model T.

Stamped panels are put together in a framing station and welded into a rectangular, boxed-shaped car. Doors are put on. The vehicle then goes through the paint shop — either dipped into a big vat, or sprayed and dried in large ovens. The freshly painted doors are then taken off. Wiring and an engine or motors are dropped in along a winding assembly line. Seats and other parts of the interior are put in, and then glass windshields and windows are added. The doors come back on right before a final inspection.

That process, Tesla executives say, is rife with inefficiencies. Moving a car-sized “box” through a factory takes up a lot of space. Painting an entire machine, instead of just the panels that need it, takes time and wastes energy. And working off of a hulking frame means only a few people can assemble their parts at a given time.

The unboxed method doesn’t require a big skeleton of a machine to move through a factory. Instead, splitting off into small groups, workers labor on various components of a vehicle simultaneously before it comes together at a single point in final assembly.

The potential cost savings are substantial, according to Vachaparampil. Caresoft sees at least a 50% reduction in paint-shop investment in new factories alone.

Paint has long been the most expensive part of any auto plant: The high heat required for automotive paint is energy intensive, and there are strict emissions requirements. The throughput of the paint shop largely determines a plant’s total output, according to auto plant experts.

A typical car body is 6 feet (1.8 meters) wide and 15 feet long. Instead of sending the entire rectangular body through a paint shop, Tesla’s unboxed process will just paint the actual panels before the car is assembled.

Untested method

The unboxed method has plenty of risks of its own, mainly that it’s unproven and requires shifting to a new assembly process, which could lead to production delays.

But it’s not the first time Tesla has made significant changes to improve long-held manufacturing practices.

With its Model Y, instead of stamping various pieces of the car, Tesla turned to die-casting machine presses to “gigacast” — or create giant molds — of the front and rear of the vehicle. That eliminated the need for hundreds of parts and welds.

Other U.S. automakers are also working to fend off the competitive threat posed by Chinese cars. Ford Motor Co., for example, is exploring a compact EV that would use a cheaper battery.

“The concern is that the lower end of the automotive market isn’t currently being served by electric vehicles, but they will be served by China if U.S. companies can’t cut costs,” said Susan Helper, a professor of economics at Case Western University, who recently served as a senior adviser for industrial strategy at the White House Office of Management and Budget.

But Musk’s company has an edge over longtime automakers in adapting to novel, potentially cheaper manufacturing techniques. Tesla’s factories are newer than most, and some aren’t even under construction yet, so it can more easily and cheaply tailor its facilities to run on cutting-edge manufacturing methods.

That doesn’t mean it’s easy. The company has warned investors that it’s “between two major growth waves” as demand for the Model 3 and Y — both of which have been out for years — tops out. Tesla delivered 1.8 million cars last year, but aims to deliver 20 million cars by 2030. To do that, it will need much cheaper cars.

(With assistance from Keith Naughton and Chester Dawson.)

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