Does a 3D-Printed Car Matter?

I guess it was inevitable: 3D-printed cars, courtesy of Local Motors, who has announced that they will begin selling them in September 2014.

Personally, I think the idea that you can 3D-print a car to be fascinating. The list of things that can be built using 3D-printing keeps on growing; I await the day when we hear that the US Navy will launch the USS Printed, a 3D-printed nuclear-powered aircraft carrier!

The question I have is why it matters. Why should anyone want to print a 3D car?

3D printing is like printing a paper on your home or office printer, or local FedExKinko’s, instead of buying a published book from Amazon. It makes sense, generally, when at least one of 2 conditions exists:

  1. Volume: What you want to print is unique globally. It will only have a few copies made.
  2. Distance: What you want to print is unique to your area. Many copies may be made, but few anywhere near you.

Volume

Manufacturing of any kind involves fixed costs and variable costs. The fixed cost is  your manufacturing equipment and plant. For a publisher, it is the massive, multi-million-dollar book publishing and binding machines, and the factory in which they run. For your home, it is the $120 inkjet printer.

Variable costs are the individual costs involved in manufacturing each item. In both printing cases, it is the ink, the paper, the effort, the electricity.

The key difference between large-scale manufacturing and small-scale manufacturing is the balance between fixed and variable costs. When you print a page on your $120 home inkjet, your variable costs are probably around $0.06/page in paper and ink. If you printed a 200-page book that way, the paper and ink alone would cost you $12.00, not counting binding, cover, and any colour images. This may be fine for you at home, but if Bloomsbury hd to produce its Harry Potter books that way, it would quickly go out of business.

Bloomsbury, however, knows it will produce millions of books, so it invests $1MM in an expensive publishing machine that not only can produce and bind the books, it does so much more quickly and reliably than your home printer (no paperjams), but at a per-page cost of probably 5-10% of your inkjet.

Bloomsbury can only afford to reduce its variable costs by investing in fixed costs if it is highly confident that it will have massive volume to cover those fixed costs.

This is why you buy a book made by a publisher, but print your kid’s homework on your home printer. It is too expensive to print the entire book using a custom printer, but it is not worth it for a publisher to publish just one copy your kid’s homework.

Distance

Sometimes, there is sufficient volume to make it worth producing, but that volume is not near you, as the customer. So you may pay a lower per-unit price than if you had to hand craft it – assuming you even could – but the shipping costs are quite high. This precise dynamic is at play with many Japanese and European car manufacturers in the US. Originally, they shipped their cars on boats from Europe or Japan. This may have led to good cars being imported – better than the Big Three were manufacturing at the time – but high shipping costs. Eventually, manufacturers had sufficient market that the costs of building additional domestic American plants were outweighed by the savings eliminated by shorter shipping distances. (I am intentionally ignoring the tariff and trade negotiations of the 80s.)

3D Cars

What does all of the above have to do with 3D-printed cars?

Insufficient volume and/or insufficient distance are the two key drivers for custom manufacturing, and need to outweigh their alternate costs. Do these exist with cars?

  1. Volume: Cars are a massive market. Unless you want a tailor-built car – and that is hard to do anyways, with most developed countries’ tight safety and efficiency regulations – the car that 99.9% of purchasers want will be something off the shelf (or lot). Very few people have any inclination to start thinking about how to make the chair or dashboard or rear-view mirror different. Volume strongly dictates that cars will continue to be mass-manufactured.
  2. Distance: Distance plays some role, but a minor one. Most major markets already have car plants: Europe, USA, Canada, Latin America, China, Japan, Southeast Asia. For those that do not, the shipping costs relative to the cost of the car are fairly low. A $20,000 USD car can be shipped from Japan to Australia or Europe to Israel  on a dedicated car carrier for ~$3,000 USD, and in many cases less. The cost of local printing will add more than $3,000 to the manufacturing cost, just as the differential for printing a book on your inkjet will cost far more than the $2-3.00 you saved on shipping.

So does 3D-printing ever make sense for cars? Beyond a few custom car situations, there is one area where it really shines: spare parts. As Andrew MacLachlan pointed out in  response to the original comment by Simon above, inventory is the perfect use case.

Car manufacturers create significant numbers of spare parts – you cannot sell one car, let alone millions, without them – in a few plants around the world. Unlike cars, however, that can have some lead time, when someone needs the replacement window or steering wheel, they need it right now. The cost of maintaining an inventory of spare parts is expensive and wasteful. Over time, as a model goes out of production, eventually Honda or Mercedes stops manufacturing the spare parts, leaving customers searching for more expensive components from middlemen who stocked inventory, or retired vehicles that happen to have that specific part still viable. 

3D-printing can eliminate much of spare parts inventory entirely. 3D printers can be located quite close to much smaller customer market concentrations, with absolutely no parts kept on hand. A service centre need simply email an order to the licensed printer, who can print the part and send it off to the dealer in hours, a day at most.

Finally, in many countries, car parts have particularly high import duties and taxes, more than the car itself. Locally sourcing the parts can bring the costs down even further.

I think it will be many years before 3D printing has any impact on car manufacturing and sales, due to volume and distance constraints. However, spare parts manufacture and inventory are perfectly ripe to be overhauled by local 3D printing.

About Avi Deitcher

Avi Deitcher is a technology business consultant who lives to dramatically improve fast-moving and fast-growing companies. He writes regularly on this blog, and can be reached via Facebook, Twitter and avi@atomicinc.com.
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