Personally I’m rooting for Tesla’s vertical integration approach. Tesla doesn’t need to be the best, just good enough to make a component of adequate quality for less than what the supplier would charge for it. I do think they’ve figured out some places where they can get to that level.

For commodities like semiconductors it would be insane to try and open your own fab: those players are so much more sophisticated than anyone else. For mechanical components I think they logic is a lot more complicated. In a phrase: it depends. I’ve been working in product development for a few years and have been to overseas factories to help set up assembly lines. Some suppliers are fantastic and we won’t beat the quality / price. Others just don’t seem to get it and we’ll spend months and many engineering hours basically teaching them how to build what we need. It’s those cases where I would personally prefer to be more vertically integrated.