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Amazon (NASDAQ:AMZN) And Tesla (NASDAQ:TSLA) Will Not Fully Automate As Robots Can’t Replace Humans

Companies such as Amazon.com Inc. (NASDAQ:AMZN) and Tesla Inc. (NASDAQ:TSLA), which have greatly employed automation in their operations, are yet to use robots at a grand scale because they can’t get a robot that can pick good as humans do.

Tesla made a mistake to automate the production of Model 3

In 2018 Tesla CEO Elon Musk stated that excessive automation at the company was a mistake following struggles in EV manufacturing. On the other hand, Amazon has made a lot of automation progress at its warehouses with robots such as Kiva. It is still yet to get a robot that can efficiently and effortlessly pick a product successfully as humans do.

Although robotics is gaining traction, research shows that only around 1.3% of companies have adopted automation with robots. Despite calls that due to the pandemic, firms should automate processes, it will be wiser to read from Tesla’s failure only to make an incremental investment in robotics rather than making big gambles.

Over the past, there have been concerns that automation could eventually replace human labor, but this is far from true judging by the automation failures we have witnessed in the past. Before Tesla failed to automate manufacturing of Model 3 cars at Fremont, California, General Motors (NYSE:GM) had failed substantially when they tried robotic manufacturing in the 1980s. The companies’ experiences show that robots struggle with inconsistencies in assembly tasks and don’t offer the flexibility that human labor provides, which is vital in manufacturing.

Firms should make a gradual investment in robotics

Researchers indicate that betting big on automation is a big mistake, and companies pursuing that path will continue to be burned. This is even with a call resulting from the pandemic to automate processes because robots can’t get COVID-19 infections. An article for MIT Sloan Management Review indicated that firms investing in automation on a grand scale are likely to fail with those succeeding being atypical. Although the rare success will be something to study, researchers indicate that increment investment in robots remains a wiser thing.

Published by Nicholas Maithya

Nicholas is a Financial Analyst by profession, who enjoys writing about investments, technological developments, business, economics and other financial topics at various financial publications. Join him here on Wallstreetpr.com as he endeavors to deliver to you the latest breaking news on the above mentioned fronts. Contact him by email at [email protected] or follow Nicholas Kitonyi @nmaithyak on Twitter.

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