Elon Musk Was Right: Outbuildings Really Can Make Your Business More Profitable

In 2018, Elon Musk’s car company, Tesla, was in serious financial trouble. For whatever reason, the firm was unable to ramp up production of its mainstream passenger car, the Model 3, despite having invested billions in equipment and machinery. At one point, things got so bad that Musk and the team cleared the carpark and began erecting make-shift tents so that they could continue certain aspects of production. To the outside world, it looked like desperation. 

Two years later, though, and it now seems like genius. And, what’s more, despite plenty of time to move indoors again, Musk is still using make-shift shelters for assembly purposes.

SpaceX, for instance, – another of Musk’s ventures – is currently constructing Starship, the rocket system designed to take people and cargo to Mars. To increase the pace of production, the company is using tent-based facilities close to the launch pad, in order to reduce the costs of production. 

Using an industrial shed is nothing new in the world of agriculture and farming. But it is certainly unexpected in something as complicated as car production or rocket manufacturing. And yet, it seems to be working, with relatively few downsides. 

So why should businesses be using more outbuildings? 

Well, for starters, it’s a great way to get around planning issues. It could take months to get permission to build a regular structure to increase manufacturing capacity going through the standard channels. But there are no rules against putting up tents in car parks or building other temporary structures on site (even if they are going to be there long-term). This planning reality makes tents more flexible and negates the need for planning officers to give the go-ahead on projects. 

Tents are also a heck of a lot cheaper than standard buildings. It could cost millions to develop a permanent structure to house car manufacturing equipment. But tents equipped with electricity supplies can do it much more cheaply. 

There are other advantages too. Employees, for instance, often like the idea of working semi-outside in a tent. It feels less claustrophobic and polluted compared to a factor. Furthermore, tents allow brands to reduce their capital outlays and still get the covered, sheltered spaces that they need. 

In a very real sense, therefore, embracing certain types of outbuildings could become a source of competitive advantage. Businesses haven’t done it before, primarily because it requires some original thinking. But they are now certainly getting on board with the idea, having seen that it can be a genuine success. 

How many companies will follow Tesla and Spacex down this road remains to be seen. But using outbuildings to slash production costs is good news for consumers in the long-term. It means that firms should be able to produce goods more cheaply because they won’t have to recoup so many of their capital costs. 

It’s also good for anyone wanting to start up a firm that requires a large quantity of plant and equipment. It could allow you to bring building costs down substantially. 

Isa Lillo


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