My apologies for writing about Tesla and Elon Musk. Writing about them has gone from anomaly to popular curiosity to cottage industry, to an out-right jobs program for the press. I apologize for joining the masses. But, I have news. There is yet another reason to beat them up.
The basis is as old as Greek tragedy. Man succeeds early in life and then over time begins to believe he has all the answers. His over-confidence builds along with his empire. Then, our tragic figure goes into the automotive business and discovers the unrelenting automotive truth: mass production can knock the hubris out of anyone, even Elon Musk.
He showed the first 30 production Model 3 automobiles at a pep rally in July of 2017. With a nervous laugh he declared, “We’re going to go through at least six months of production hell.” That comment turned out to be prophetic.
Early on, Tesla’s original target was to build 5,000 Model 3 cars per week. Instead, for the entire final three months of 2017, they delivered just 1,550 Model 3s.
After the first six months of production hell he started showing off a new flamethrower for sale—true story. They shut down the line in month seven, just one month after the first six months of production hell and shut it down again in month nine. Musk ‘took over’ production this last month, started sleeping in the plant and admitted to pushing for too many robots in the production process.
Robots are very accurate and repeatable welders and assemblers, but they never adjust to change very well. If the parts are not accurate and exactly the same every time, you have a fundamental mess on your hands. Elon, the flamethrower may come in handy after all.
Let me try to explain why mass production is so hard. It is like piloting a super tanker. A loaded super tanker has a turning diameter at sea of over a mile and takes almost 15 minutes to stop in the water from ‘full ahead’ by grinding the engines in full reverse. Running an automotive high volume production system is like that but measured in months and years.
Car parts are dimensionally measured in fractions of millimeters. They are carefully pre-planned to come from the best suppliers from all over the world. Each supplier has their own technique for making their component. Every dimension, tolerance and detail becomes a variable, as parts are made in volume and parts come together. Before you build the first car, you must confirm that every part will fit and operate in its place and be right all the time. This process of pre-checking the parts when they come off of their own little assembly line is tedious, time consuming and boring to entrepreneurs with egos. I understand that Tesla short changed this process on the Model S. Based on what we are all learning, it looks like they may have skipped the details again, this time on the the Model 3s. This raises several questions:
· If one part is not dimensionally correct, should you adjust the rest of the car to fit?
· Will the next batch of parts that come in be dimensionally off in the same way too?
· If a neighboring part is also off just a bit, is that making the first problem worse?
· Is the problem so severe that you should start over with a new supplier?
Tesla decided to build their Model 3 production system around a strategy to use an impressive amount of automation. Many months after that decision was made, the robots are now accurately positioning inaccurate parts.
Skipping confirmation steps early, and rushing to production can cause the overall system to start losing track of what is right and wrong, up or down. If every car becomes an assembly of slightly and randomly inaccurate parts, what is a robot to do?
I promised I would pile on Elon. Tesla ended 2017 with its largest quarterly loss ever: $675 million. The Q1 report is worse with a loss of $784 million for a total loss approaching $1.5 billion dollars in just six months. Tesla began when George W. Bush was still in his first term as President. This company is now 15 years old and still has not turned a real profit.
After continually staying two steps ahead of a cash shortage and side-stepping 100 death sentences from the business press, is production hell the end of Tesla? I don’t think so. It has survived before and will survive again.
Now however, unlike the past, Elon Musk and Tesla are running out of time. Tesla is burning cash at astounding rates now that the scale of the enterprise is so large. He is also running out of future product promises to distract us now that he has sent up ideas of super-car roadsters, new CUVs and even semitrucks to outfit the portfolio.
There is one more important fact on the horizon– the traditional car companies from Germany and Detroit as well as other global brands, have been busy developing some compelling electric cars of their own. Those models are coming soon from companies that have had the time to do their homework for mass production—and they don’t skip steps.
Recent Comments