Tesla is going back to supplying other automakers with new acquisition, could sell ‘the machine that builds the machine’


It’s not something that is well-known about Tesla since it wasn’t overly advertised on the consumer side, but electric vehicle development and manufacturing for other automakers was an important part of Tesla’s revenue stream for a while.

The company developed and manufactured electric powertrains for Mercedes’ smart EV and B-Class, and for the second generation of Toyota’s Rav4 EV. That ended last year with the end of Tesla’s involvement with the Mercedes B-Class electric program, but now Tesla is coming back as a supplier to other automakers through its latest acquisition.

Yesterday, Tesla announced the acquisition of a German engineering group, Grohmann Engineering. The firm, which will now become ‘Tesla Grohmann Automation’, is an important supplier of automation systems for the automotive industry.

During a press call following the announcement of the acquisition, CEO Klaus Grohmann described the company’s client base:

“We have practically all the big automotive manufacturers as our clients. We also have the semiconductor producers as clients, as well as significantly large companies in the field of bio-automation and life science.”

Tesla CEO Elon Musk confirmed that Tesla will honor the contracts with the automakers, but he also said that they could continue working together to accelerate the transition to electric transport:

“There are a number of existing automotive clients for Grohmann and we will, of course, honor those contracts and try to be as useful as we can to the industry as a whole in transitioning to clean energy mobility.”

Musk described the acquisition of Grohmann Engineering as the basis of the Tesla’s new ‘Tesla Advanced Automation’ group, which the company expects to grow to over 1,000 engineers over the next 2 years. This group will focus on developing systems to automate and scale the production of electric vehicles – something Musk as been referring to as “the machine that builds the machine”.

Now it looks like Tesla is positioning itself to potentially supply that “machine” to other companies in order to accelerate the advent of electric transport. Musk added during the call:

“If you apply Tesla’s philosophy to help the whole automotive industry in moving to e-mobility – as you may know, Tesla made all of its patents freely available just to be helpful to the rest of the industry and as a gesture of goodwill. And that’s something we expect to continue.”

Grohmann also added that he expects Tesla’s involvement to positively contribute to the solutions his firm offers to its clients:

“We think that we will be maintaining the infrastructure that we have so far and we will in the future be even more capable of providing our customers with specific solutions. In respect to the automotive industry, Tesla’s solution is a different way – not in a technologically competing way – and maybe, or hopefully, a more successful technology.”

Tesla CTO JB Straubel added that the fact Grohmann is involved in automation of several different industries will help Tesla develop better automation systems than what is currently available in the automotive industry:

“Part of what I think we saw as a really a great strength for Grohmann was the diversity of different industries that they are working in today. I think there’s a lot of learning that can be brought in the automotive business. Biology and electronics, we can learn from those different industries and that’s something that we are really excited not just to continue but actually grow.”

Musk agreed with Straubel and said that it was an “underappreciated” aspect.

The fact that Tesla is not just acquiring Grohmann’s engineering talent but plans to “actually grow” its business is certainly an interesting development, which sounds like a new business for Tesla: “supplying the machine that builds the machine”.

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