Home » GM Buys Key Tesla Gigacasting Company Out From Under Tesla

GM Buys Key Tesla Gigacasting Company Out From Under Tesla

Casted Part Tei Tmd
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I wasn’t exaggerating when I said that Tesla made “gigacasting” the word of the year in the automotive industry. Automakers are going crazy for gigacasting with a real if-you-can’t-beat-them-join-them attitude about the production and prototyping technique pioneered by Tesla. Or, in GM’s case, there’s a real if-you-can’t-beat-them-buy-them approach to a key enabler of Tesla’s gigacasting approach.

Whilst on the topic of General Motors, perhaps we should talk about Berkshire Hathaway dumping its position in the automaker. Is this about GM or is this about BH? It’s worth exploring. Also worth exploring are semi-solid state batteries.

Vidframe Min Top
Vidframe Min Bottom

And, finally, the IIHS is back in the news this week with information on how our big, bulky cars are becoming more fatal for pedestrians.

I’m writing this from the bottom of a bunk bed, which is actually quite pleasant. Jason is in the top bunk, he enjoys it a little less.

GM Grabs TEI Before Tesla Does

Tei Casting
Photo: TEI

Reuters has a fun exclusive this morning about a Michigan-based automotive supplier you’ve probably never heard of called Tooling & Equipment International (TEI). This is one of approximately ten million automotive suppliers in Michigan with names that are so straightforward and literal that it makes it a little hard to know if they’re doing the important/boring work for car companies or doing something far cooler.

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TEI, it’s clear, is doing something far cooler. It’s helping Tesla and other automakers with gigacasting. Specifically, TEI is one of the companies helping with new techniques for creating alloys and heat-treating larger and larger parts. The bigger the part you can gigacast, in theory, the quicker and easier you can build a whole car.

And now TEI is owned by General Motors. From the Reuters report:

TEI is now part of General Motors (GM.N) after agreeing a deal that may have flown under the radar but is a key part of the U.S. automaker’s strategy to make up ground on Tesla, four people familiar with the transaction said.

By snapping up a specialist in sand casting techniques that accelerated the development of Tesla’s gigacasting molds and allowed it to cast more complex components, GM has jump-started its own push to make cars more cheaply and efficiently at a time when Tesla is racing to roll out a $25,000 EV, the people said.

With TEI gone, Tesla is leaning more heavily on three other casting specialists it has used in Britain, Germany and Japan to develop the huge molds needed for the millions of cheaper EVs it plans to make in the coming decade, the four people said.

Damn, got’em.

Berkshire Hathaway Reportedly Dumps GM Holdings

Chevrolet Equinox FrontBerkshire Hathaway is far from the only conglomerate holding company, but because it’s owned by the usually prescient mega-investor Warren Buffett it gets a lot of attention when it does anything. The big automotive news of late is the company’s slow and profitable divestment from Chinese automaker BYD.

So what is it up to now? According to Marketwatch, the company dumped about 22 million shares of GM this last quarter:

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Over the last decade, GM has produced annual returns of -0.5%, compared to an 11.7% rise for the S&P 500 SPX, according to FactSet data. Ford Motor Co. F, +5.91%, which Berkshire Hathaway didn’t hold, also has produced negative returns, while Chrysler owner Stellantis STLA, +2.90% has seen annual returns of 20.8%.

Berkshire has been in GM since about 2012 and has been dropping shares for more than a year. What’s interesting to me is not so much that the company has been dropping its GM shares (Buffett does this all the time and owns/buys/sells a lot of major companies), but that the firm is now holding on to a record cash position of $157 billion. What’s that all about?

The Answer To Batteries Might Be: Gels

Nio 6
NIO swappable battery.

If a solid won’t do and a liquid seems unwise, perhaps consider a gel. This was the mantra of the ’90s when all of a sudden my shaving cream, my deodorant, and even the crap I eat on long runs got replaced with a gel. Gels! What can’t they do?

Apparently, gels can help bridge the gap between the dream of solid-state batteries and the reality that solid-state batteries don’t quite deliver yet.

There’s a thorough report out of Automotive News explaining how the gels might work:

A semisolid-state battery has a small amount of liquid or gel that allows fast diffusion of ions — or atoms with an electric charge — to charge and discharge an EV battery. It has far less liquid than a traditional lithium ion battery.

“Semisolid isn’t a pipe dream. It’s just around the corner, and it’s feasible and has many of the benefits of all-solid-state,” said Max Reid, principal analyst at Wood Mackenzie, an energy research and consulting firm.

Unfortunately, current EV batteries feature a lot of liquid to transfer ions between positive and negative electrodes. These batteries obviously work, but they create issues in terms of packaging, safety, and performance. Solid-state batteries, in theory, solve some of these problems and offer much greater range.

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IIHS: These Slabby Vehicles Are Killing People

Chart Showing Front End Crash StatsThe Insurance Institute For Highway Safety is out again with another report on vehicle safety, this time highlighting how bad those slab-fronted cars are for pedestrian safety.

Here are the highlights:

Over the past 30 years, the average U.S. passenger vehicle has gotten about 4 inches wider, 10 inches longer, 8 inches taller and 1,000 pounds heavier. Many vehicles are more than 40 inches tall at the leading edge of the hood. On some large pickups, the hoods are almost at eye level for many adults.

[…]

Vehicles with hoods more than 40 inches off the ground at the leading edge and a grille sloped at an angle of 65 degrees or less were 45 percent more likely to cause pedestrian fatalities than those with a similar slope and hood heights of 30 inches or less. Vehicles with hood heights of more than 40 inches and blunt front ends angled at greater than 65 degrees were 44 percent more likely to cause fatalities.

“Manufacturers can make vehicles less dangerous to pedestrians by lowering the front end of the hood and angling the grille and hood to create a sloped profile,” said IIHS Senior Research Transportation Engineer Wen Hu, the lead author of the study. “There’s no functional benefit to these massive, blocky fronts.”

I think automakers might argue that the functional benefit is they look good, but I suppose that’s not really a functional benefit.

This all makes perfect sense and is something that safety groups have been arguing for a long time. Do you know what a safe car is in this scenario? If you look at the graphic above it’s clearly something like a Toyota GR86 or a Ford Mustang. Clearly, if we want to make the world safer, we need more people driving sports cars.

The Big Question

Serious question: What’s the deal with Berkshire Hathaway squirreling away $157 billion?

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Less-Serious Question: What company would you buy with $157 billion?

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Hgrunt
Hgrunt
8 months ago

Gigacasting is one of those manufacturing techniques that comes with a lot of caveats and whether or not there’s a big benefit depends very specifically on the constraints each manufacturer is dealing with.

I hope one of these days we can get a Deep Dive article about the pros and cons of gigacasting, too

Stef Schrader
Stef Schrader
8 months ago

Flush: I could probably buy a cheese farm in the Alps with that. Just me, my happy mountain cow friends, some of the best roads on Earth for hooning and a large staff full of nice cheesemakers who know what they’re doing.

Stef Schrader
Stef Schrader
8 months ago

I’m writing this from the bottom of a bunk bed, which is actually quite pleasant. Jason is in the top bunk, he enjoys it a little less.

What did you eat at that cajun joint, man? Top bunks are kind of fun, but there is a certain price you pay to be up there if someone’s in the bottom bunk. I’m not sure I’d be happy smelling Matt’s Crawfish Farts all day, either.

Inthemikelane
Inthemikelane
8 months ago

I’d buy a telco and sell some of its parts (land lines}, then build up it’s FTTH, FWA, and long haul fiber business from the proceeds. With the building cash flow, then go deeper into telematics and anything related to 5G or higher.

Sorry, so sorry, I’m just leaving this business and just see so much potential if a risk were taken the thought of having $157B overwhelmed me. Damn you!

Mr Sarcastic
Mr Sarcastic
8 months ago

With all the caveats on cars VS pedestrians it reminds me of Toyota Camary sellers claiming holy grail because of paint color and a certain auto transmission. You want reduced pedestrian deaths? Don’t give pedestrians the right of way over cars. The pedestrians like cycling say I got the right of way shove their nose in their call phones walk out I traffic without looking. But on the ocean the bigger ship has the right of because, just like in cars, it takes longer to stop and turn. Hey even trains have the right of way because it takes forever to stop. So passing a law pedestrians have the right of way doesn’t change the laws of physics.

Jonathan Jones
Jonathan Jones
8 months ago
Reply to  Mr Sarcastic

Cyclist here. Ignoring your first sentence, since I can’t even parse it as relevant English.

Right-of-way often devolves to what mode of transport was first at the intersection,
historically. For example the barges on the Mississippi were first, so at Ft. Madison, Iowa,
for example, where there’s a Railroad pivot bridge, the trains wait for the barges.

Similarly one can argue that walking is the Ur-mode of transport, and so deserves
pride of place in any place where wheels vs. legs and feet conflict.

Do you live in a place where clueless pedestrians stare into their phones while
they traipse unconscious ‘cross the street? Are you talking from personal knowledge?

When cycling, I imagine I am invisible. I also break some laws, to set myself in a traffic gap.

I can be strictly legal. Or, I can adopt strategies that allow me another day here.

JDE
JDE
8 months ago
Reply to  Jonathan Jones

“Do you live in a place where clueless pedestrians stare into their phones while
they traipse unconscious ‘cross the street? Are you talking from personal knowledge?” YES

It is telling that you admit as a cyclist that you indeed break traffics laws and think this is acceptable. I also see many cyclist blow through stops with no regard for anyone else, change lanes with no hand signals, and overall be a menace on the road. Not as bad as say the drunk youth on Bird Scooters mind you and of course like many segments of society the number of bad apples to relatively good safe riders is admittedly small, but it certainly happens.

But I also see a fair percent of people looking at a phone in a cradle above the radio driving eratically and also blowing through stops unsafely, so you as an admittedly illegal rider of a bicycle are not in fact the only problem it seems.

Myk El
Myk El
8 months ago

Do I get to keep the change on that $157 billion? Can I buy multiple companies? I’m buying Hasbro and Electronic arts and based on market caps, I’d have plenty left over.

(I want to own Transformers and I want a modern version of Racing Destruction Set)

OFFLINE
OFFLINE
8 months ago

Given how many people that are staring at their phone instead of the world around them, it’s clearly time to mandate airbags on pedestrians.

Timbuck2
Timbuck2
8 months ago
Reply to  OFFLINE

Exactly. I feel like most pedestrian accidents are the pedestrians fault. Not saying drivers are attentive these days but, for real, it really amazes me how someone can manage to get hit by a vehicle.

Flyingtoothpick71
Flyingtoothpick71
8 months ago
Reply to  Timbuck2

I may be an outlier and just unlucky, but I’ve been hit 5 times (as a pedestrian) and never when I’m on my phone. 3 times its been i have a walk sign and someone turns right on red without looking or just runs the red light, the other 2 have been at stop signs and i get waved on by the person to cross and then got hit by that same person. like I’m not saying that this is normal, but is seems that drivers (especially older drivers in my experience) are not paying attention for pedestrians in the slightest

OFFLINE
OFFLINE
8 months ago

Where did this happen (all in the same place?) I want to know so I can avoid it.

Flyingtoothpick71
Flyingtoothpick71
8 months ago
Reply to  OFFLINE

rural eastern Colorado (usa) and in and around the small town I lived in, might just be terrible drivers

Jonathan Jones
Jonathan Jones
8 months ago

Again, cyclist here. I jockey a third of a mile on my way to a trail,
a six-lane bridge over a major interstate.

(STL, BBB over I-44, for Toecutter)

I must needs take a full lane to get across the bridge:
the shoulder disappears, and it’s full of tire-cutting crap,
leftovers from fender benders, it’s apparently good enough
if the detritus from a wreck is swept right of the white line. . .

As cyclist, I love when people in cars bow and let.
But I never take them up on it, I let them all go.
I waive them all on, by your leave, get on that interstate.

I am never to win the physical interaction.

Flyingtoothpick71
Flyingtoothpick71
8 months ago
Reply to  Jonathan Jones

yeah, that’s how I’ve lived my life since then just because its happened so many times, i give cars the right of way nearly every time these days

TOSSABL
TOSSABL
8 months ago
Reply to  OFFLINE

Some people are just gonna people.
I taught an early thirties woman how to drive a stick a good while back. Born & bred in NY City. She had her foot broken by a bus because she stepped off the curb reading a book

Urban Runabout
Urban Runabout
8 months ago

“GM Grabs TEI Before Tesla Does”Golly – If only a public automotive corporation had a CEO that was intent on minding his business rather than losing $30Billion on a tedious social media platform, fathering dozens of kids, measuring gaping panel gaps in microns, and/or spewing fascist garbage….

“IIHS: These Slabby Vehicles Are Killing People”
Remember a few years back when we were told that automotive hoodlines needed to be higher to allow for space under the hood so that people who were hit and thrown on the hood of a vehicle might survive because they weren’t smashed against the underlying engine block? Who knew that drivers might need to see over that long, high hood?

Dogisbadob
Dogisbadob
8 months ago
Reply to  Urban Runabout

That second point may be moot with electric…

Urban Runabout
Urban Runabout
8 months ago
Reply to  Dogisbadob

It definitely is.
Unless you’re in an F150 Lightning, which uses the same body as the ICE F150.

Ben
Ben
8 months ago

What’s the deal with Berkshire Hathaway squirreling away $157 billion?

I need a lot more context to say. I would guess most people who can afford it are sitting on “record cash reserves” right now thanks to inflation meaning your emergency fund needs to be larger than ever. I’d need to know what ratio of cash to equity investments they’re running, and how that compares to their historical ratios, to say whether they’re hunkering down for a crash.

In addition, with cash returning an almost risk-free 5% in a basic money market fund right now it just makes sense to have a bit more of it on-hand than when those funds were returning .01%.

Baron Usurper
Baron Usurper
8 months ago
Reply to  Ben

>with cash returning an almost risk-free 5% in a basic money market fund right now

Where? I’m genuinely asking because BoA is offering me an APY rate slightly above “kick in the dick”.

Ben
Ben
8 months ago
Reply to  Baron Usurper

I have money in a few different Fidelity money market funds and they’re all returning around 5% right now. Note that these are not FDIC-insured savings accounts (my actual rainy-day fund is in one of those, returning much less than 5%) though, so there is some risk. It’s about the lowest risk of any investment you can make though.

Chris Jackson
Chris Jackson
8 months ago
Reply to  Ben

I have two regular ‘high-yield’ online savings accounts right now. One is at a 4.35% APR, and one is 4.85% APR. Mind blowing, considering that normal bank passbook accounts are at 0.5% or less right now.

Slow Joe Crow
Slow Joe Crow
8 months ago

The problem with large castings is that they are unrepairable. It may make building a car cheaper but fixing one is going to be ruinously expensive.

Stop Making Us Register To Comment
Stop Making Us Register To Comment
8 months ago
Reply to  Slow Joe Crow

That is what they want, more expensive fixes and more likely to buy a new replacement.

Slow Joe Crow
Slow Joe Crow
8 months ago

sad but true.

Dogisbadob
Dogisbadob
8 months ago
Reply to  Slow Joe Crow

cut and weld 😉

Mantis Toboggan, MD
Mantis Toboggan, MD
8 months ago
Reply to  Dogisbadob

Then heat treat in the giant autoclave everyone has laying around. It can probably be welded and ground until it’s invisible but without heat treating it’ll shatter right there next time it’s overloaded.

Dogisbadob
Dogisbadob
8 months ago

yeah you can weld, or you can use duct tape and Bondo LOL

Ranwhenparked
Ranwhenparked
8 months ago
Reply to  Slow Joe Crow

This is a feature, not a bug, from the perspective of automakers

Jason Roth
Jason Roth
8 months ago

I saw that graphic this morning, and it’s absolutely fascinating to me that the 3 in the upper left corner are all functionally the same, the two on the bottom are the same (horrible), and the one on the middle right is in between. Which means there’s only a relatively narrow range where geometry matters.

Now here’s my… not exactly conspiracy theory, but idiosyncratic take: About 20 years ago, Europe mandated taller noses for pedestrian safety. I don’t know the geometric parameters, but they all but killed pointy-nosed cars. Suddenly, upright bumpers/grills were in. And, IMO, that kicked off the race towards the murder trucks we have now.

Why? Because, while trucks have always been upright with prominent grills, suddenly sedans and CUVs also had upright, prominent grills—if you’ll recall, the trend from the mid-’80s on was towards smaller grills and lower (aero-look) noses, but the Euro-regs put a halt to that. And if you tell a car designer the nose needs to be upright, you’re going to get bigger grills. And if a damn Escape has a big grill, then the F150 had better have a BIG grill. It’s all about relative positioning.

Mike
Mike
8 months ago
Reply to  Jason Roth

Exactly what I was thinking. And I’ll double-down with a question: WHY might the EU have thought a higher nose was safer? Seems so counter-intuitive to me.

Stop Making Us Register To Comment
Stop Making Us Register To Comment
8 months ago
Reply to  Mike

because politicians are usually wrong

Jason Roth
Jason Roth
8 months ago

Yeah, yeah, no seatbelts, no airbags, bring back leaded gas. Tell us about how safe your Bel Air was, Grampa.

Jason Roth
Jason Roth
8 months ago
Reply to  Mike

My understanding is that it wasn’t about the impact point per se, but instead about landing on the hood: tightly packaged engine compartments have no give. Or maybe I’m conflating two different rules. Big unintended consequences tho.

Ben Siegel
Ben Siegel
8 months ago
Reply to  Jason Roth

This is correct. It’s a taller hood with a gap above the engine or other hard parts so that if a car hits a pedestrian the person hits sheet metal and not an iron engine block.

1franky
1franky
8 months ago
Reply to  Mike

It’s not a higher nose that’s safer, they mandated a minimum amount of crush space between the hood and the top of the engine, and designers raised to nose to avoid the minivan look. The height of the nose is pretty inconsequential to pedestrian survival as long as it’s roughly below hip height (so the hit pedestrian lands on the hood rather than being knocked under the car), getting a broken knee or leg is pretty minor as long as there is crush space to slow the impact to the head and vital organs. Some cars added charges or airbags under the hinges that would lift the hood in the event of a crash rather than redesigning to increase hood-engine space.

Jason Roth
Jason Roth
8 months ago
Reply to  1franky

Thanks for clarifying. That lines up with my recollection, I just couldn’t put the pieces together. I think the first explanation I ever read mentioned the noses without going into detail, and so that stuck even though it was a side-effect of the actual rule.

Acrimonious Mofo
Acrimonious Mofo
8 months ago

“Clearly, if we want to make the world safer, we need more people driving sports cars.”

Clearly.
The Autopian has spoken.

Vetatur Fumare
Vetatur Fumare
8 months ago

My Honda Today Associe is the optimal car for hitting people with – assuming you don’t want them to get hurt. Small, round, friendly looking with a low, sloped bonnet and a tiny engine. Also, it weighs 1499 pounds, so if I hit someone we are both likely to bounce backward off each other.

Ottomottopean
Ottomottopean
8 months ago

The is the same play Warren Buffet always employs. If he bought most of his GM holding in 2012 that was not a great time for GM though not the lowest after it needed the bailout in 2009. Buffet probably saw signs of improvement and the price was low so went in with his pocket change to get 22M shares.

Fast forward to today and the stock has increased a bit but there are obvious troubles ahead. It looks like the low point for GM in 2012 was about $19-20/share. Now it’s roughly $30/share so he made good and got out before they hit a wall on their EV investments and the future looks to be rocky with a lot of unknowns.

Also, right now you can park your billions for a pretty good and safe return on it. Thanks, inflation!

If I was looking to invest that many billions into a company I’d likely look at some of the chip manufacturers trying to install themselves in the US, maybe into ARM if they were to take a short term hit. But honestly I think Buffet is right to park the cash. Wait for the bubble to burst and buy up some bargains after the inevitable correction or until inflation improves and the rates for cash drop again.

Vetatur Fumare
Vetatur Fumare
8 months ago
Reply to  Ottomottopean

The cash holding is more interesting. Does this mean deflation is coming our way?

Ottomottopean
Ottomottopean
8 months ago
Reply to  Vetatur Fumare

I could not begin to predict that but if so I doubt it comes soon and there are more problems than benefits if it does.

Vetatur Fumare
Vetatur Fumare
8 months ago
Reply to  Ottomottopean

I bought a house a year ago; deflation would wreck me…

1franky
1franky
8 months ago
Reply to  Vetatur Fumare

I doubt that Buffet expects deflation. I’d guess he feels that GM has reached a point where he’s no longer confident of continued growth, and he doesn’t see a good investment to immediately move that money into. He’s willing to take a small loss to inflation from having that much cash to be well positioned when a market or sector correction opens up something he feels is a good investment.

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