Time with the Teardown Titan

Munro & Associates is leading competitive analysis into the EV age – and spreading the gospel with a global YouTube fan base.

Sandy Munro among thousands of highly scrutinized Tesla Model 3 components in his company’s expansive Auburn Hills tech center. (Lindsay Brooke)

Competitive benchmarking has long played a vital role in the auto industry, but until recently, it’s been an insider’s game. Then came a surprise hit on YouTube: Munro Live. The ongoing series  is informative, addictive and valuable for those involved in vehicle development and manufacturing. It’s a must-see for engineers seeking to understand the relationship between cost and quality – particularly as the industry transitions into the electric vehicle (EV) age.

Munro and an engineer examine a component. His company also teaches Lean processes. (Munro & Assoc.)

Who could have guessed that in 2021, YouTube viewers would flock to watch veteran benchmarking expert Sandy Munro expose the inner workings of the mysterious “octovalve” heart of Tesla’s HVAC system? In dozens of episodes, he has compared EV electrical architectures, detailed the intricacies of the new 4680-format battery cell, revealed new applications of rivet-bonding, cracked open the latest EV power inverters and explored the trend toward large cast-aluminum vehicle structures and the processes used to make them. To its fast-growing fan base – over 160,000 online subscribers strong – the charmingly folksy Munro Live is YouTube heaven.

“It’s been phenomenally successful for our business,” noted Munro – a disciple of lean-design guru W. Edwards Deming – who founded his eponymous Munro & Associates  engineering and consulting firm 33 years ago. The YouTube videos have generated millions of views and have become a profit center for the company. They’ve also been a boon for recruiting.

“We had to reinvent ourselves in the wake of the pandemic,” he explained. “This meant broadcasting ourselves in a different way.” He credits his son Alistair and new company president Cory Steuben for encouraging him to try YouTube as a platform in early 2020. “I was on the fence about it; our engineers pooh-poohed the idea,” Munro, the CEO, noted. “But the videos really changed our sales model. As a result, companies in need of our expertise became familiar with what we do and started giving us a call. We began getting work from people whom we wouldn’t have guessed.”

Reducing weight, cost, complexity and time-to-market are chief reasons customers seek out Munro. Among the early viewers of Munro Live were two high-ranking U.S. Army officers based in the Pentagon and focused on R&D. Munro & Associates had seen its significant chunk of business with the Dept. of Defense evaporate in the wake of the 2013 federal budget sequestration. The YouTube exposure helped them reconnect with the military. “Next thing you know, about 50 percent of our work [now] is defense-related,” Munro noted.

The growth in DoD business (which mandates a dedicated, secure facility) prompted Munro to purchase a 9,000-ft2 building across the street from the company’s 47,000-ft2 tech center and lab in Auburn Hills, Michigan. It has also driven staff expansion. Since March, 30 new engineers, technicians and support staff have been added, raising the global company’s total to over 100. “And that’s not enough to handle all the projects we have going on,” Munro asserted.

EV analysis booming

Electric vehicle teardowns and analysis currently represent 60-65% of the company’s revenue. Munro expects it to eclipse some of the defense and medical-industry business. Non-EV work is still significant; recently Munro’s team finished a study of four large-capacity diesel engines, for example, and is evaluating Class-8 truck transmissions for a client. Electric motors and batteries are an increasingly busy area of study, as are pumps of all kind. Aerospace, marine and medical devices are ongoing benchmarking and lean-design subjects. But electric propulsion and energy storage are the big blips on the mobility world’s radar.

“We’ve torn apart over 30 EVs; I’m only allowed to talk about the ones we’ve done on subscription,” Munro explained. They include the BMW i3; Tesla Model 3; Chevy Bolt (two or three teardowns) and Tesla Model Y. Along with the vehicles, “we’ve done every electric motor that’s worth anything,” he said. On the to-do list are the Porsche Taycan motor, inverter and 2-speed gearbox. The other motors of interest are those in the VW I.D.3, which are made in China. “We’re probably going to buy an I.D.4 and do a full teardown because some of our customers are interested in that,” Munro reported.

In terms of what the team has learned, he says “there’s not much that we don’t know. And we’ve pretty much costed everything.” Some teardowns – such as the Model Y – have been completely 3D-scanned and the data entered into CAD. The primary customers for Munro’s products include Toyota, Honda, Hyundai, Kia and “so many Chinese automakers I can’t count them,” he said. “That’s who is driving our profit, along with a tremendous number of Tier 1s. We’ve had some sales in Europe,” Munro added. “But mostly the local Detroit guys shun us – I think because we’re honest with them.

“We’ve torn down their EVs and asked, ‘Why are there so many cables? Why are you using an old-fashioned inverter? Why are you using this last-generation battery?’ We ask those kinds of questions and then they don’t get back to us,” he said. “Or they reply, ‘We’ve always done it this way.” By comparison, in 2018 Munro reported the Tesla Model 3 had “flaws that we would see on a Kia in the ‘90s.” At the time, Tesla was struggling to meet early production targets for the Model 3. “I thought your criticism was accurate,” Tesla boss Elon Musk told Munro in an interview that aired on Munro Live.

A not-invented-here mindset stubbornly remains among “the hometown guys,” as Munro calls GM and Ford. In fact, according to an engineering source in Dearborn, Ford embarked upon its own full-blown teardown of a Tesla Model Y, months after Munro & Assoc. concluded its activity and began selling its detailed report on the vehicle. The Ford study reportedly has not yet closed.

“What scares the daylights out of me about the hometown guys is that I don’t think they’re paying enough attention to what’s really going on competitively,” Munro said. Ford and GM know the Chinese cars are well-made. And the Chinese engineers, he said, “are very interested in everything new that comes out. Tens of thousands of Chinese watch our videos. Somebody at Baidu in China takes our videos and adds subtitles. Our staff at Munro China tell me the viewership is off the map. Marklines in Japan also translate us and it gets heavy watch.”

Design for manufacturability (DFM) expert Mike Oakes, Munro & Associates’ VP of business development and a former GM and Stellantis vehicle engineer, offered his view of some OEMs’ thinking: “We see it as them trying to solve new problems with old solutions. And when you want to go fast, you pull a technology and parts that you’re familiar with,” Oakes said. “They’re not willing to invent, because there’s no time for that. And that’s probably the greatest hurdle for the traditional OEMs. How do you solve a new problem with the old solution?”

Decapitating inverters

Booming demand for electronics benchmarking down to the silicon level is driving demand at Munro & Associates for “inspired workaholic” engineers with knowledge of electronics product design, costing and manufacturing. (Lindsay Brooke)
The primary aluminum casting for Tesla’s ‘octovalve’ HVAC unit, derived from SpaceX technology. (Lindsay Brooke)

Two keys to respect in the competitive-teardown field are data and detail, an engineering source at Stellantis explained. “It would make a lot of sense for us to standardize on the Munro reports,” said the source, who asked to remain anonymous. “Their stuff is considered the ‘gold standard’ in my group, but we don’t make the contract decisions.” Munro noted his team’s painstaking analysis of the huge aluminum “megacasting” Tesla uses in the rear section of the Model Y body structure. Their work confirmed that it is a highly unique 386-alloy (Al-NYC-386) – a fact not previously disclosed.

“The difference between Munro & Assoc. and everybody else is that we want to find out everything. And so do the Japanese, Koreans and Chinese. That’s why they do business with us,” Munro said. “We have experts who can decapitate an inverter and determine how the silicon chips are performing. Who’s buying our inverter studies? Toyota, Honda, Hyundai, Kia, a flood of Chinese OEMs, plus people who want to get into that business.”

Munro counts among its many OEM customers a raft of small startups that are competing in the 3-wheeled EV space, primarily aimed at commercial delivery and sports/performance. Those on the roster, including Aptera, Arcimoto, Indigo and Nobe, have vastly different product-development approaches compared to the OEM establishment.

“They’re moving at the speed of thought,” Munro observed. “They move fast and they’re really dedicated to winning. They see that the guys who started Tesla wound up millionaires. Most of these guys can’t get Tier-1 suppliers to work with them so they design and engineer their own subsystems and components. The reason Tesla’s seat – that I praise in the videos – is so good is because Tesla did it themselves. Same with their batteries.”

He recalls a sign that he and Steuben saw in SpaceX’s launch complex in Brownsville, Texas, where they visited at Musk’s invitation in 2019. “It said, ‘Nobody Changed the World in a 40-Hour Work Week.’ It speaks to the cultures at SpaceX and Tesla that are so radically different than the auto-industry norm.” SpaceX has a major impact on Tesla’s approach to design and engineering, as evidenced by Tesla’s unique heat pump that is “of big interest across the industry,” Munro explained. After launch, Tesla made 15 engineering changes to that heat pump in six months. “They change constantly, and they believe speed is everything.”

While the mobility newcomers are a threat to the automotive incumbents, many of them generally lack a firm grasp on integration – how to take a design that is probably going to work and make it work beautifully, while ensuring it can be manufactured at rate, Munro and Oakes said. Early Tesla Model 3s suffered here, as Musk admitted to Munro in his YouTube interview. “Bringing solutions is what we do for a living,” Munro said, “and it’s why we have so many of these smaller companies that are willing to pay us to help them get where they want to go.”