Ford and Daimler Embrace 3-D

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Ford Motor  (NYSE: F  ) may have a mammoth research, development, and engineering budget of $5.3 billion, but it also recognizes the value of spending micro amounts to invigorate its innovation. Recently, Ford engineers have utilized open-source 3-D printers made for the home market to improve their development process for new vehicles. In Ford's Silicon Valley lab, engineers email design files for small parts such as gauges and gear shifts to their counterparts in Dearborn, Mich. The Dearborn engineers then use the files to generate plastic, three-dimensional prototypes on a desktop 3-D printer that can be ordered off the Internet from MakerBot Industries at a cost of $2,200.

Based in New York City, privately held MakerBot manufactures personal 3-D printers for DIY ("do it yourself) consumers. MakerBot competes with 3D Systems  (NYSE: DDD  ) , which targets the personal, educational, and industrial markets with its range of 3-D printers. 3D Systems is a market leader in the emerging field of 3-D printing, and as one of the few public 3-D companies, it's a beneficiary of the growing interest in the market potential of this technology. 3D System's stock gained nearly 250% last year, and sports a market capitalization of $3.47 billion. MakerBot, while backed by a mere $10 million in venture capital, has attracted the interest of some shrewd investors, Jeff Bezos among them. It also has grabbed market share of 22% in the personal 3-D printing market.

Ford intends to put MakerBots in the hands of every engineer in 2013. Here's an image of MakerBot's latest model, the "Replicator 2," to give you an idea of how personal 3-D printers are coming to resemble the familiar desktop paper laser printer, although it must be acknowledged that the Replicator 2 is one sleek machine and more inspiring than anything you'll find printing in 2-D:

Source: MakerBot Industries website.

The Replicator 2 "prints" in nontoxic PLA filament, a corn-based polymer similar in look and texture to plastic. As with most other 3-D printers, it builds objects in very small layers, 100 microns thick, or one-tenth of a millimeter, to be precise.

What's in it for Ford?
One of the most tangible benefits of collaborative 3-D printing in automobile design is reducing the long cycle from dreaming up an automobile to rolling the first model out onto car lots. The "time to market" from concept to production for a new automobile can range anywhere from two to four years on average. For a high-selling model like the Ford Escape, which ranges in price from $22,000 to $32,000 and which averaged U.S. sales of 21,750 per month in 2012 , this can mean upwards of $1.5 million in revenue in Ford's sales ledger for every day that is reduced in time to market.

Ford's global auto development system is destined to wear out the heads of its MakerBot printers. Designed to facilitate efficient vehicle design, Ford's engineering process is described by the company as a "hub and spoke" approach. One product engineering hub is allocated to each global vehicle line. The spokes are regional engineering centers that help tweak vehicle design for local markets. Ford will certainly shoot for faster local market customization using rapid 3-D prototyping. 

Additive manufacturing: adding lasers
Daimler AG  (NASDAQOTH: DDAIF  ) is also using advanced processes during development to cut time to market. Daimler works with German company Concept Laser and R&D center ILT Fraunhofer to bypass the time-consuming die casting process. Concept Laser develops "additive manufacturing" machines. Additive manufacturing can refer to any additive process (such as 3-D printing with PLA filament), but in the automotive industry, it also refers to a process in which metal powders such as aluminum, titanium, nickel, and cobalt are fused by laser to produce lightweight, super-strong alloys. The alloys are fused on a plate, and similar to 3-D printing, objects are built in very fine layers. 

To assist Daimler, ILT Fraunhofer supplied its knowledge of laser melting, and worked with Concept Laser to develop an industrial machine, dubbed the X line 1000R . Rather than outsource dies to automotive suppliers, Daimler can use the X line 1000R to churn out dies for parts in-house, which should also facilitate experimentation in the development phase. In the future, Daimler will also be able to manufacture larger lightweight automotive parts and structures using this and similar machines.

While laser-based additive manufacturing is still evolving, the potential payoffs for Daimler are impressive. An example is the use of lightweight materials in its truck division. Lightweight materials mean greater payloads, better fuel economy, and reduced environmental impacts for commercial trucks. All are competitive selling points for Daimler. The X line 1000R or variants will eventually be used in high-volume production. At nearly 29 billion euros, the truck division represents 27% of Daimler's revenue. A little leverage from additive manufacturing should go a long way both in terms of revenue and margin for this division. Incidentally, Daimler's North American truck segment uses printers from 3D Systems in its pre-production quality-control process.

Current investment, future impact
In the fast-changing global automotive market, it can be difficult to tell whether an entrenched manufacturer is retaining its long-term edge over its competition. By embracing 3-D printing and additive manufacturing, Ford and Daimler are exhibiting a desire not only to maintain their respective edges but to sharpen them. Long-term investors should appreciate the outsized benefits to be realized by both companies from pocket change investments in these technologies.

3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.

Read/Post Comments (9) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 23, 2013, at 3:50 PM, 3drp wrote:

    This is news?

    Ford, Chrysler, and Daimler have been customers of 3D since 3D first released their products around 1990. GM was too, but later relied on suppliers. Not sure if they still have the technology.

  • Report this Comment On January 23, 2013, at 5:38 PM, TMFfinosus wrote:


    Thanks for commenting. What's news is the shift away from the old approaches to 3-D manufacturing, which entailed cutting away at a material block to produce a shape, or using molds (sandcasting). You're right that the big automakers have been using the older technologies for quite a while. More recent 3-D technology builds objects layer by layer, as explained in the article. And I think the approaches used by Ford and Daimler as described are pretty novel as well.

  • Report this Comment On January 23, 2013, at 5:45 PM, XMFBiggles wrote:

    I'm actually interested in the shift from larger industrial-scale 3D printers to smaller, cheaper ones for prototyping. I think that's a valuable story in its own right with a useful investing takeaway, and made this piece worth the read.

    Thanks for writing this.

  • Report this Comment On January 23, 2013, at 6:48 PM, TMFfinosus wrote:

    Thanks TMFBiggles! I've enjoyed & learned from your articles on 3D printing, especially on Formlabs recently.

  • Report this Comment On January 24, 2013, at 7:52 PM, jjbang wrote:

    Do you know why Ford decided to partner with MakerBot rather than the larger 3D Systems? Does it tell us anything about these competitors, or about their future trajectories?

  • Report this Comment On January 25, 2013, at 5:55 PM, TMFfinosus wrote:


    I appreciate you commenting on the article!

    That's a great question. While maybe it's a stretch to say that Ford partnered with MakerBot, they certainly like their machines. I think the open-source nature of the Replicators is attractive to the tinker-loving engineers at Ford -- although I understand MakerBot is moving away from this model. Also, as much as I admire all that 3D Systems has achieved, to be honest, their competing product, the Cube, looks more like a plastic toy, though the specs are comparable to the Replicator:

    Because 3D Systems has exposure in many markets from retail to high tech, they probably will grow handsomely over time. But upstarts like MakerBot will challenge fiercely. No one has a monopoly on this industry yet!

  • Report this Comment On January 25, 2013, at 6:04 PM, TMFBlacknGold wrote:

    Actually, MakerBot had a 21.6% market share for the industry in 2011.


  • Report this Comment On January 25, 2013, at 10:16 PM, TMFfinosus wrote:

    S'up Maxxwell? I mention the market share (rounded to 22%) above -- 2011 is the most recent market share info I could find (same faq). Enjoyed your article on 3D printing valuations today. Do you think MakerBot will continue to win market share? I like the fact that it isn't trying to conquer every segment of the 3D market (as DDD seems to be trying to do).


  • Report this Comment On January 27, 2013, at 8:00 PM, TMFBlacknGold wrote:

    Doh I see it now. That's whats I gets for skimmin....

    I think MakerBot has an interesting business model that is a bit different than their public counterparts. Thingiverse, the NYC store, and some of the things they support are unique. It's pretty tough to say who will dominate, although as you're aware MakerBot gained a few percentage points in market share in the last few years alone.

    I just like to see the private companies get some attention because they make valuable and sizeable contributions as well. So I like this article.


Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2209409, ~/Articles/ArticleHandler.aspx, 10/1/2016 3:03:17 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 5 hours ago Sponsored by:
DOW 18,308.15 164.70 0.91%
S&P 500 2,168.27 17.14 0.80%
NASD 5,312.00 42.85 0.81%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/30/2016 4:02 PM
DDD $17.95 Up +0.29 +1.64%
3D Systems CAPS Rating: ****
F $12.07 Up +0.10 +0.84%
Ford CAPS Rating: ****