Trip Chowdhry believes that Tesla can reinvigorate the broken US manufacturing sector through the Gigafactory
Published By: Eunice Gettys on January 30, 2017 11:31 am EST
Even after the presidential election, Tesla Motors Inc (NASDAQ:TSLA) was seen as the biggest loser, which was expected to walk on fire in the new era of Republican-controlled Washington. However, President Donald Trump’s approach to work with American business leaders to bring back manufacturing job in the US has worked for the Californian clean-tech company.
While being part of the Strategic and Policy Form, Tesla CEO Elon Musk was added to the new Trump team of Manufacturing Jobs Initiative on Friday to give his insight on how to increase employment in the country. Following the announcement, Global Equities Research analyst, Trip Chowdhry, who has also always believe Tesla to outshine under the Trump administration, published a research note on the company today.
He continues to use flashy words, which are frequently used by Mr. Musk himself, to maintain his bullish thesis on the company, stating that Tesla will “help USA regain its global manufacturing leadership.” He believes that the company’s huge $5billion plant, the Gigafactory, in the deserts of Nevada is “the poster child for the new USA manufacturing.”
He noted that the Gigafactory is: “the blueprint for the modern manufacturing” that will play a critical role to reinvigorate manufacturing jobs in the country. He highlighted that Tesla plans to use its factory as a product which is developed using Physics first principal, something Mr. Musk has been saying since the past year.
Mr. Chowdhry believes that both linear supply chain and catalogue engineering are dead. He explained that the nation’s manufacturing sector is “fundamentally broken.” It currently includes the parts catalogue as the starting point for any product that is engineered. Therefore, this approach is “flawed”, resulting in sub-standard products being built in the US.
The research firm said that the thought process behind manufacturing is out-dated in the country, product recycling and reusing appears to be the main idea before every product design. It thinks that “tight vertical integration,” an approach adopted by Tesla, offers a long-lasting competitive edge. “Tesla has known to postulate the following ideal factory of tight Integration,” Mr. Chowdhry noted, adding that a factory should be ideally constructed upon the mine, like the Gigafactory is being constructed.