Forbes India 15th Anniversary Special

How Kevin Czinger shrunk the auto factory

Using software and 3D printing, Kevin Czinger wants to miniaturise the auto plant. It's the opposite of Elon Musk's plans for Tesla and every bit as radical

Published: Dec 21, 2017 06:41:58 AM IST
Updated: Dec 19, 2017 08:17:59 PM IST

How Kevin Czinger shrunk the auto factoryDivergent 3D CEO Kevin Czinger is betting on a radical transformation of the manufacturing sector that will change how industrial goods are made
Image: Ethan Pines for Forbes

Nobody has to remind Kevin Czinger what the Rust Belt was like during the heyday of American manufacturing. The pungent smells, the dark soot spewing from smokestacks and his summer job shovelling coke at a steel plant are all seared into memories of his youth in Cleveland in the 1970s. The northern Ohio city was a symbol of industrial might—until suddenly it all crumbled.

Now the 58-year-old entrepreneur wants to help usher in a new manufacturing era—one that can withstand the forces that decimated his hometown along with vast swaths of the United States. You can get a glimpse of this new era at a miniature auto factory, about the size of a large grocery store, tucked inside a concrete-and-glass office park in suburban Los Angeles. Beyond darkened glass doors, parked in the gallery-like lobby of the headquarters of Divergent 3D, his five-year-old startup, is the Dagger, a sporty looking motorcycle. Nearby sits the Blade, a sleek silver sports car that calls to mind vehicles in the sci-fi film Minority Report. Czinger built both with a patented approach to manufacturing that relies heavily on new digital technologies like 3D metal printing. They’re less expensive than traditional manufacturing methods and better for the environment, and they could prove as disruptive to the transportation industry as electric vehicles (EVs) and self-driving cars.

The Blade and Dagger are prototypes, but Czinger has teamed up with France’s Groupe PSA, which makes Peugeot and Citroën vehicles, to work on a number of development projects over the next few years. And his mini-factory will be making batches of other test vehicles—van-like shuttles—for customers Czinger won’t yet name. Investors like Hong Kong billionaire Li Ka-shing’s Horizon Ventures and Altran Technologies, a French high-tech engineering consultancy that works in the automotive sector, along with Czinger himself and others, have poured $28 million into the company. A new investment round targeting up to $100 million is expected to close soon.

“Traditional auto manufacturing is fundamentally broken from an economic and environmental standpoint,” Czinger says. “You can’t scale factories up and down to meet changes in the market.”

Divergent 3D, he says, points the way to a better future for how industrial goods are made. In place of Detroit’s megafactories—or Elon Musk’s Gigafactories—21st-century manufacturing will be ruled, Czinger believes, by networks of small-scale urban factories like his. They’ll be able to deliver low-cost, low-carbon vehicles in small and highly customisable batches. And they could help bring jobs back to communities that have lost them.

A typical car factory costs between $500 million and $1 billion to build, and the tooling and machinery are amortised over many years, which is why they need to produce hundreds of thousands of vehicles per year to be profitable. Divergent 3D promises it can build a production line for 20,000 or more cars a year in a warehouse-type space, complete with large-scale 3D metal printers, laser cutters and assembly robots, for just over $50 million. Because of lower capital and production costs, vehicles would be up to $6,700 cheaper to build, on average, Czinger says.

Czinger is hardly alone in betting on industrial-scale 3D printing. Until now, 3D printing has been used mostly to make prototypes. But the technology is changing fast, with ever bigger machines now able to “grow” larger parts from a variety of advanced materials, including metal powder.

Sales of advanced 3D printers, which are being used to make engines for SpaceX rockets and giant wind turbines for GE, are soaring. Ford Motor may not 3D print F-150s any time soon, but it is using the technology to make factory equipment. HP predicts the technology will usher in a “distributed manufacturing” future in which companies build what they need, when they need it and where they need it, says Tim Weber, an executive at the company’s 3D printing unit. “Imagine you are on a marketplace like Amazon,” Weber says. “You order a car. Maybe it was designed in Lithuania, but it’s built in your hometown and delivered a few days later. That’s the direction it’s going—maybe not immediately, but the fourth industrial revolution is exactly that.” Costa Samaras, an assistant professor of civil and environmental engineering at Carnegie Mellon University, says industrial 3D printing “will disrupt a lot of existing supply chains”.

How Kevin Czinger shrunk the auto factory
The prototype Dagger was built using Divergent 3D’s patented 3D printing techniques
Image: Ethan Pines for Forbes

Czinger’s version of that disruption relies on using complex 3D-printed metal joints as the “connective tissue” that attaches to the carbon-fibre structure, or “bones”, of a car’s chassis using a high-strength adhesive, rather than being welded. The result is a strong, lightweight underbody that costs a fraction of the one built using traditional stamping methods. In lieu of a paint job, cars get coloured vinyl wraps that are durable and scratch-resistant. Because cars made this way will be lighter, they will also require less fuel.

Groupe PSA embraced Divergent 3D in order to accelerate its manufacturing efficiency, part of a broader turnaround effort under chairman Carlos Tavares. In a six-month study for PSA in 2016, engineers determined that using Divergent 3D’s tech to develop a popular SUV would have had a dramatic upside: Development time would be reduced by a year, vehicle weight would be trimmed in half, 75 percent fewer parts would be required, and there would be more flexibility to make changes on the fly. “This has the potential to dramatically scale down the size and scope of our manufacturing footprint, reduce overall vehicle weight and build complexity, while also giving us almost limitless flexibility in design output,” Tavares said after signing the deal with Czinger last year. “We are talking about a radical change for our industry.”

In all, Divergent 3D has development deals with about “half a dozen” companies, Czinger says. If Alphabet’s Waymo or Apple one day opts to build its own autonomous vehicles, the Divergent 3D system could make that happen, he says. “My focus is to do this globally,” Czinger adds.

As industrial disruptors go, Czinger is a curious candidate with an eclectic background. His football talents helped get him to Yale, where he was named Ivy League Player of the Year in 1980. After earning undergraduate and law degrees there, he worked as a federal prosecutor in the late 1980s (under US attorney Rudy Giuliani) and as a Goldman Sachs banker in the early 1990s. He later had stints at Webvan, where he was chief financial officer, and at another investment firm.

Divergent 3D isn’t Czinger’s first attempt at auto industry disruption. In 2008 he co-founded Coda Automotive, which hoped to kick-start electric-vehicle sales with a ho-hum Chinese-made sedan. Timing wasn’t on his side.

Just as Coda was ramping up deliveries, Tesla released the elegant Model S that redefined the EV market.

Coda flopped, but Czinger’s odds with Divergent 3D may be better. He’s not trying to compete head-to-head with Tesla or anyone else by making cars. Instead, his business model relies on licensing Divergent 3D’s technology to manufacturers. His timing could be right this time. As pressure for sustainability increases and private car ownership gives way to transportation as a service, especially in crowded cities, 3D printing offers an efficient way for automakers to locally produce clean, inexpensive cars for shared urban fleets.

“We can do it at the right economics with much greater flexibility,” Czinger says. A car for Los Angeles may look very different from a car for Paris or Shanghai. “This is what it comes down to,” Czinger says. “The resilience of the environment, the resilience of the economy depends on diversity.”

(This story appears in the 22 December, 2017 issue of Forbes India. To visit our Archives, click here.)

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