On February 2, 2021, near the base where Space X launched its rocket in Texas, Musk and Sandy Munro, a famous car disassembly and evaluation expert, found a humble office to start a conversation for close to an hour.
The 70-year-old Sandy Munro is not only a car reviewer, but also a YouTube star with 170,000 fans who often wears a white coat or black jacket to dismantle various electric cars and spray Tesla with golden words. Not only did he say that the rear body structure of the Model 3 was a patchwork quilt, but he also spat out that the splices between the bodies were so wide that he could see them when he sat on a Space X rocket to Mars.
Musk chatting with Monroe
But this time when Master Monroe chatted about Tesla’s body problems, Musk, who had been prepared, first responded strongly, saying that these problems do exist, so “buy Model 3 either when it is just launched or when the production is stable. Otherwise, during the period of increased production, both to make the car’s production rise rapidly in a straight line, but also to deal with a variety of details, it is simply difficult to ascend.”
But the next second, Musk killed a back to the old man, with Model 3 bugs to Model Y advertising: Model 3 seams so poor the fundamental reason is not to use our latest integrated die-casting technology, Model Y with this technology is not only no disgusting body seams, the combination of several large die-casting, you can be on a production line The combination of several large die casters can replace most of the functions of about 300 robots on a production line. It saves money and effort.
Die-casting is not a new technology, the principle and the ancient people casting bronze is a bit like: molten metal liquid injection into a grinding tool cavity inside, and after the metal cooled to get a metal casting, the advantage is that you can easily create delicate and complex shape of the parts, the disadvantage is that the molding process of thermal expansion and contraction is easy to produce errors, so the application is limited.
Die casting machine
Yet Musk is obsessed with this technology.
At Battery Day 2020, Musk said that the one-piece die-cast rear floor technology that will be used in the ModelY will allow the weight of the ModelY’s lower body assembly to be greatly reduced, with manufacturing costs also dropping by 40%. On Twitter, Musk also praised the 410-ton die-casting machine from the same machine, which is the equivalent of five space shuttles, and said it will bring “a revolution in body design and production – lighter, more compact, better NVH, higher precision, lower capital expenditure, lower unit costs.”
On the other hand, Musk’s obsession with die-casting machines has set off an industry storm in the distant Chinese mainland die-casting industry, the impact of this storm is divided into three times, lasting for seven years, and also makes this traditional industry stuck in stagnation burst out with new vitality, even creating a wealth myth of 20 times increase in six months. And the development of China’s electric vehicle industry also grows with Tesla’s three die-casting changes, and in one encounter and learning.
01 First contact: Tesla’s partner is not good
China’s auto die-casting industry, the first to enter Tesla’s eyes, in fact, in 2013, a Ningbo enterprise called Sunrise.
This company has been interested in doing new energy industry supporting, and has good processing ability in parts such as battery pack shell, transmission case and transmission suspension.
In the prospectus of Sunrise, this company spent nearly 10,000 words to depict in detail how to break into Tesla’s industry chain and turn Tesla into Sunrise’s number one customer: In June 2013, Tesla, with an annual production capacity of only 20,000 far across the ocean, found Sunrise in order to turn a part of the battery cooling system from a two-part welding process into a one-time processing and molding.
Sunrise also seized the opportunity to quickly deliver an answer to Tesla’s satisfaction and quickly made a sample. After receiving the samples from China, Tesla went to Ningbo and made a comprehensive evaluation of the site, manufacturing capability, equipment capacity and R&D capability of Sunrise, and after passing all of them, both parties signed a general contract for a total of ten years.
In the following years, Sunrise again participated in the R&D of parts required for Tesla’s Model S, and became a common design, R&D and processing supplier for Tesla, and in 2015, Sunrise entered the transmission system of Tesla’s Model S and Model X – the transmission for the common platform. In the same year, orders from Tesla, with a 50.27% revenue share, became the number one source of business revenue for Sunrise.
Sunrise’s product representative chart
A simple calculation: Sunrise in a Model S / X supporting the value of 3,500-4,000 yuan, Model 3 supporting the value of about 2,000 yuan, gross profit of up to 50% or more, that is, Sunrise from Tesla’s a car, you can earn 1,000-2,000 yuan, which in the price war frequent die-casting industry is considered a money-printing business.
The first half of the story is wonderful, even to the Chinese casting market has begun to decline for two consecutive years in 2019, Sunrise is still able to rely on 1.10 billion yuan, 0.15% year-on-year revenue growth, in the industry stand out.
However, on one side of the revenue growth, the other side is the rapid decline in gross margin: since 2016, Sunrise’s gross margin on Tesla’s automotive business all the way down from 57.2% to 33.2% in 2019.
The reason is simple, according to the ten-year contract between Sunrise and Tesla, the product has the vacation in the first three years, and the product price in the next seven years needs to be adjusted by both sides “according to the situation.”
Gross profit soared after the plunge, which is behind the reliance on cheap labor, higher degree of cooperation, successfully entered the supply chain of world-class customers, many Chinese manufacturing upstream enterprises representative of the rise of the way.
But if only limited to, gearbox, battery shell casting manufacturing, that China’s die-casting industry, perhaps all will be so – as a traditional industry, in a special moment of industrial change and industrial newcomers to experience a short period of sweet, immediately after, in the downstream customers constantly pressure price, pressure gross profit, become its trillion market value of stepping stones.
After all, it is only if limited to this, the significance is obviously limited – after all, China is not short of die-casting companies and die-casting capacity, and Tesla is even less short of cheap and obedient suppliers. According to Modern Casting, from 2010-2017, China’s cast aluminum alloy iron parts production grew from 3.8 million tons to 7.3 million tons, a compound annual growth rate of 9.78%. With a global share of 38.27%, it ranks first in the world, more than the second to sixth places combined.
Behind the high production capacity, in fact, the industry is highly fragmented, in China, there is the whole industry up to 12,000, only 10% of the large die-casting enterprises, of which, most of them are to do supporting the automobile, with the beginning of the automotive industry winter in 2018, the die-casting industry has also stepped into a long downward journey. Just rely on Tesla to use Chinese die casting in some small and medium-sized parts, obviously difficult to bring qualitative changes to this industry.
After Sunrise, the second Chinese company to enter the vision of Tesla, is a Chinese die-casting machine company called Lijin, strong and strong, the global die-casting industry, since then into a revolutionary change.
02 The second change: hidden in the model Y gross profit increase in the secret – oversized die-casting machine
At the end of 2020, some astute investors, after turning over Tesla’s financial report, found an incomprehensible data, the same platform produced models, the latest model Model Y, compared to the already mature mass production Model 3, there was a tiny rise in gross profit.
Puzzled investors, began to look for the secret of Tesla’s cost decline from the various traces of Model Y. But the answer, in fact, as early as the Tesla Battery Day launch on September 22, 2020 EST, Musk had already revealed the secret to the world – a super-large die-casting machine from Idra, a subsidiary of China’s Lijin Technology.
It is a giant machine 19.5 meters long, 5.3 meters high and the size of a basketball court, weighing up to 410 tons, equivalent to the sum of five space shuttles.
Its manufacturer, Idella, is famous for producing high quality die-casting machines, established in Italy in the 1940s, only 15,560 machines have been produced in nearly 80 years, two-thirds of which are still in operation and maintenance, and is also the pioneer of large die-casting machines. The first 4,000-ton die-casting machine was produced in 1993.
During the financial crisis in 2008, Idra was acquired by Likin Group and became its wholly owned subsidiary, starting to explore a broader market together with Likin and fulfilling the challenge that Likin brought to it: to build the world’s first 6,000-ton die-casting machine.
This new machine obviously makes Musk greatly satisfied, it can turn the complex production process that requires processing and reassembling 70 parts and welding 1000 to 1500 times in traditional car frames into a simple die-casting process, making welding two hours into die-casting two minutes.
Compared to the traditional car rear floor with more than seventy parts spliced together, the rear floor assembly of Model Y is composed of two super large castings spliced together, reducing manufacturing costs by a full 40%.
Just seventy parts streamlined into two, why can bring 40% cost reduction? Three words summarize: save material, save place, save time.
Save material: the scrap from the aluminum die-casting process can be melted again to increase the material utilization rate to 90%; while the trimmings and scrap from the traditional stamping and welding process can only be recycled at the price of scrap metal, and the plate utilization rate is only 69%-70%.
Save space: the use of large die-casting machines can reduce the investment in industrial robots on the production line, which in turn reduces the area of the automotive plant by more than 30%.
Save time: According to the research of CITIC Securities, “the single work cycle of super-large presses above 5000 tons is about 180s. If calculated based on 20 hours of production per day and 300 days of work a year, the single die-casting machine capacity in 120,000 pieces / year.” 120,000 pieces a year, or one-third of the capacity of Tesla, which will deliver only 360,000 units in 2019.
The current Tesla, on the other hand, has a total of eight giant die-casting machines from Lijin Technology in four major factories: the Shanghai Super Factory and Berlin Factory with three die-casting machines, respectively, have an annual planning capacity of 450,000 and 500,000 units, while the Fremont, California factory with one die-casting will also have a capacity of 590,000 units in 2020; and the Texas factory, which is in the process of climbing, has a planning capacity of 500,000 to 1 million units.
Likin Technology’s share price, in cooperation with Tesla, has accomplished the miracle of a one-year share price increase of nearly 20 times.
Of course, not only Tesla, force force as Chinese equipment business, and many Chinese die-casting enterprises have been having cooperation, and even mutual consultation die-casting process, Tesla brought process innovation and ideas, also began to influence the Chinese die-casting industry.
03 three storms: domestic die-casting, from Tesla assistant, to domestic electric car partner
When Tesla waved the flag for Likin’s die-casting machine with great fanfare, China’s die-casting industry, too, launched a silent change in the same period.
On May 26th, 2021, a company called Wencan in Tesla’s industry chain signed a strategic cooperation agreement with Lijin Technology, which includes 7 sets of die-casting unit orders.
According to the agreement, Lijin Technology will provide Wencan with 7 sets of die-casting units, including two sets of 6,000 tons equipment, three sets of 4,500 tons equipment, one set of 3,500 tons equipment, and one set of 2,800 tons equipment.
The two 6000T units mean that Wencan will directly enter into super-large one-piece die-casting and lay hands on the whole car body, the 4500T unit can die-cast the doors, and the 3500T and 2800T can be used in the production of car seats.
Before Wencan formally introduced 6000T equipment, the global automotive industry chain, with force force 6000T and above equipment, only Tesla a company. Subsequently, the capital market also gave an eager response to this movement: Wencan’s share price rose more than 26% in three days after the signing.
Behind Wencan’s purchase of super-large die-casting machine is the leaping domestic electric car star enterprise. According to Wencan’s official news, as early as 2019, Azera has become Wencan’s top five customers, the two sides’ cooperation direction is exactly the Azera ES8/ES6/EC6 body structure parts, and in 2021, Azera will also become Wencan’s number one customer, and its ET7 model structure parts, which have not yet been officially delivered, to be produced by Wencan.
In order to improve the range, Azera’s body itself is all aluminum, 30% of which is aluminum casting, but because it does not use a larger die-casting process, it has to use a complex connection process to build the body-in-white, which includes such as hot fusion self-tapping riveting (FDS) self-punching riveting (SPR) aluminum spot welding (RSW), and other 7 complex processes, not only welding robots are such famous brands as ABB, even the welding guns need to be imported from Germany, France and other countries.
In this case, “steal” from Tesla, learn the technology of one piece die-casting is undoubtedly the urgent need for Azera to improve production capacity and reduce costs, and Wencan and Lijin are undoubtedly its best assistant to cut into one piece die-casting.
Of course, ambitious to enter the large structural die-casting, as well as the domestic electric car star enterprises, and not only Wencan a. As the first Tesla die-casting supplier, the first die-casting technology.
As Tesla’s earliest die-casting supplier, sunrise also will Bühler’s 4400T die-casting equipment in the bag; another domestic casting leading enterprises Acuity, also in the recent 2020 annual results presentation expressly said “the next 5 years, we will focus on financial and human resources, the introduction of 2800T-4400T large die-casting machine, research and development of automotive structure High pressure die-casting manufacturing technology. “
Compared to the 6000T die-casting machine that can die-cast one-half of the rear floor of the electric car at once is still slightly inadequate; but 4400T equipment, also belongs to the large products in the die-casting machine, is the production of large complex thin-walled new energy automobile aluminum alloy structural parts necessary products.
Tesla play a leading role, force force pressure, Wen Chan, Sunrise, Acuity to enter the game, domestic electric vehicle enterprises followed, a large structure of the electric vehicle die-casting Chinese legion is gradually taking shape.
04 Epilogue: Tesla’s industry chain change, the rise of Chinese manufacturing paradigm
From Tesla’s radical use of aluminum to reduce the weight of the body; to the use of large die-casting, subverting the traditional car production; to Tesla led by China’s auto casting plant on the large castings affect the downstream car plant.
If the former Tesla into China for the catfish effect of China’s electric car industry, the discussion of the voice is mainly focused on the macro level of the vehicle; then the three changes in China’s die-casting industry today, the process provides a more specific microscopic samples.
The first time, it was as the processing mainly for Tesla.
The second time, it was to start developing equipment and processes together with Tesla.
The third time, it was when the Chinese industry began to purchase its own equipment and export its own solutions.
And China’s electric vehicle industry will continue to grow as it engages with top-notch rivals and teachers.
As is the case with Chinese cars, so is the case with Made in China.
 CITIC Securities: Die-casting disrupts 100 years of automotive processes, the industry will welcome a golden era – Author: Liu Haibo, Li Yue, Yin Xinchi, Song Shao Ling
 Hejin Chain: [Annual Summary] 2019, what the die-casting industry has experienced
 Anxin Securities: Lightweight development opportunities from Model 3 -Author: Yuan Wei, Xu Huixiong
This article is from WeChat public number: Yuanchuan Technology Review (ID: kechuangych), author: Liu Rui
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/musks-obsession-with-die-casting-machines-is-taking-the-industry-by-storm-in-faraway-china/
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