GM acquires key Tesla supplier amid plans to get gigacasting right

General Motors has quietly acquired Tooling & Equipment International (TEI), a little-known company that played a critical role in helping Tesla establish its manufacturing process.

TEI was a key part of 'gigacasting', the name Tesla gives to its unique process of casting large automotive body parts in a single piece to reduce production time and costs. The company is a specialist in sand casting technology, which helped Tesla accelerate the development of its 'gigacasting' molds and allowed it to create casts for more complex components than the industry standard.

Now, Detroit-based GM has acquired the company in a low-key deal as part of the legacy carmaker's own attempts to bolster its e-mobility operations, Reuters reports, quoting unidentified sources.

"General Motors acquired Tooling & Equipment International to bolster its portfolio of innovations and secure access to unique casting technology," the company said in response to a query from Reuters. GM reportedly paid less than $100 million for TEI, which formally became part of the behemoth's Global Manufacturing division on July 1 this year.

The purchase comes at a critical time not just for GM, which recently had to suspend its driverless unit, but for Tesla as well. The EV pioneer is pushing to make cars cheaply and is reportedly racing to roll out a $25,000 EV. Others in the fray include Volkswagen and Stellantis marque Opel.  

TEI and the other companies use industrial sand to make test molds that can be used to cast molten alloys. Sand molds can be printed quickly and reprinted multiple times with tweaks, allowing companies to refresh designs at minimal cost. The companies have been particularly important to Tesla's gigacasting process, developing alloys that can be used in sand casts and figuring out techniques to heat-treat the metal body parts after they've been molded together.

With TEI gone, Tesla must rely on three other casting specialists whom the company has used in Britain, Germany and Japan to develop the molds its needs to create the cheaper EVs it plans to roll out over the coming years. 

The EV maker is also scrambling to find another sand-casting specialist to step into TEI's shoes, and might even look at developing the expertise in-house to reduce dependence on third-party suppliers.

TEI and GM first worked together around 2021, when the Detroit-based company asked TEI to test and produce some underbody castings for its luxury $340,000 Cadillac Celestiq EV. TEI received the 2023 Casting of the Year award for its Celestiq castings from the American Foundry Society; the car will reach showrooms next year.

"Bringing TEI into the GM enterprise builds on decades of the company's own casting experience and provides a competitive advantage with strategic castings for future low volume products like the Cadillac Celestiq," GM said in its statement, adding "TEI will remain its own business entity with GM as its parent company."