Tesla Buys Automated-Machine Supplier

Tesla Inc. has acquired Perbix Machine Co Inc., a Minneapolis-based supplier of automated manufacturing equipment.

Perbix has been a supplier to Tesla for about three years. The company’s president, James Dudley, will receive about $10.5 million in Tesla stock, according to a regulatory filing. No other terms were disclosed.

Tesla says the deal will help improve its highly automated manufacturing operations as it struggles to ramp up output of its new Model 3 electric sedan. The carmaker built just 260 of the $35,000 EVs in the third quarter, well below its 1,500-unit goal.

Tesla CEO Elon Musk has blamed the production bottleneck on one part of a four-part process for assembling the car’s lithium-ion batteries at the company’s Nevada Gigafactory. It’s not clear if Perbix equipment is currently used in that process or if it will be in the future.

On last week’s earnings call with analysts, Musk said Tesla has redesigned the process in question from the ground up. As a result, the company has pushed back the timing of when it expects to reach a 5,000-unit weekly production rate by three months to the end of the first quarter of 2019.

The Perbix purchase comes about a year after Tesla acquired German manufacturing- specialist Grohmann Engineering GmbH. The newly formed Tesla Grohmann Automation division was tasked with designing the automated manufacturing system for the carmaker’s vehicle assembly plant in Fremont, Calif., that was expected to yield “exponential” improvements in production speed, quality and efficiency.