The past few weeks have provided a bloom of articles cuffing CEO Elon Musk's failures of prediction, revolutionary ambitions, we-can-do-it-better-in-house mindset, and Tesla's rotund financial losses. Or, more concisely, everything we expect from a new Tesla model launch. For a reminder, please refer to last year's Model X rollout and missed production targets.
Musk uses the no-frills "bottlenecks" to describe why Model 3 assembly numbers haven't come close to targets. Much-slower-than-expected battery production at Tesla's Nevada plant is the oft-cited bottleneck, with Musk saying that a supplier "really dropped the ball." Tesla installed an automated system to build Model 3 battery packs, but the system hasn't worked as planned. That's forcing Nevada plant workers to manually manage what should be an automated process. According to FT interviews, the same issue plagues battery production at the Fremont, Calif., plant.
The FT piece adds two more trouble spots, one of them being delays due to Musk reinventing carmaker factory design at the same time as he's reinventing the mass-market electric car. Late revisions to Model 3 components have led to supplier setbacks, ballooning costs and frequent quality-control checks that shut down the entire manufacturing line. According to one anonymous source, "They [Tesla] showed complete befuddlement" when one supplier couldn't turn around a revised part on Tesla's schedule. "Tesla kept saying 'you need to make it faster', [but] any time you make changes [to the design], you go back to the start of the process."
On top of that, sequencing issues mean the assembly line isn't synched with the arrival of parts. That leads to incomplete cars rolling off the line and "a large number of parts ... stored at the factory," which adds to costs. Click over to the FT piece for the details, but note, there's a pay wall to access.
We must admit, however, it's hard to work up any alarm about the findings. Yes, Tesla will likely need to refund Model 3 reservations to buyers spooked by ominous portents and longer wait times. But that reservation list is figured to be somewhere around 500,000 names; if Tesla delivers half that number to early adopters, the Model 3 still makes a rampaging success. Crucially, we've had years of these ominous portents, critical investigations, and side-eyed naysaying, and none of it has made a substantive dent in Tesla's day-to-day. Even Musk believes his company is overvalued. If the Model 3 ends up being the car that breaks Tesla, it will likely be because too many Model 3s break down when owners finally have them.