In its fourth acquisition to date, Tesla Inc. Tuesday announced the purchase of a company called Perbix Machine Co. Inc. that develops machinery for automating production line operations.

According to Reuters, the Minnesota-based firm has been a supplier to Elon Musk’s electric car maker for nearly three years. Perbix specializes in providing design and manufacturing services for companies with complex production requirements that necessitate custom equipment.

Tesla didn’t divulge the role Perbix plays in its operations or what will come of the acquisition, but previous deals may provide insight into its motivation. Most notably, the electric car maker last year picked up Grohmann Engineering GmbH in a bid to bring the manufacturing that the German firm handled in-house.

Producing a part internally can provide more control over production than if the task is relegated to a third party. Moreover, it avoids the business risks that come with depending on an external company. However, taking over the manufacturing process has also created challenges for Tesla that are becoming rather pronounced.

During the company’s earnings call last Wednesday, Elon Musk told shareholders that only 222 Model 3 sedans were delivered in the third quarter. The car maker had originally expected to ship 1,500 vehicles in September alone. Musk attributed the bottleneck to manufacturing problems that he colorfully described as “production hell.”

The main issue apparently has to do with Tesla’s Gigafactory in Nevada. According to the car maker, problems with an external supplier forced it to rework one of the four steps involved in building the batteries for the Model 3. Musk said the highly automated nature of Tesla’s production lines complicates the implementation of changes.

That makes the timing of the Perbix acquisition quite noteworthy. Even if the deal wasn’t struck in direct response to the battery production issue, the firm’s production automation expertise should certainly be valuable for Tesla. This is especially true in view of the revelation Monday that the car maker’s longtime director of battery engineering has quietly left.  

The terms of the Perbix acquisition were not disclosed. However, a regulatory filing uncovered by Electrek revealed that Tesla has paid owner James Dudley about $10 million worth of shares as part of the transaction.

Image: Maurizio Pesce