Tesla was anticipating a production rate of 20,000 Model 3s a month by the end of December. Over 3 months through September, though, Tesla had produced only 260 — about 3 cars a day. That’s well behind a normal auto-industry production pace of 1 car per minute. The company blamed unnamed manufacturing “bottlenecks,” and promised a quick fix. But the assembly line remained incomplete by early September with some body parts normally installed by robots being employee-assembled by hand.
The “production hell” that Musk acknowledged raises questions about whether the Silicon Valley model he has followed — beta testing with early adopters and launching updates via software — can be adapted for Tesla’s first mass-market product. “Automobile manufacturing is very hard,” said an OM prof at UCLA. “It’s amazing that Tesla has been able to build cars at all.” He meant it as a compliment.
Tesla took the Model S from design to full production faster than traditional manufacturers would consider. Tesla’s breakthrough over-the-air technology made software fixes a snap. Code to fix battery issues, add self-drive features, or simply tweak the music system can be downloaded via the car’s Wi-Fi system. Still, many owners complained that there were more quality problems than they expected in a $90,000 car. In July, Tesla turned the first 30 Model 3s over to paying customers — all Tesla employees. Some of those first 30 cars were returned to Tesla with battery problems.
Classroom discussion questions:
- How does Tesla’s approach differ from traditional automakers?
- Are such delays to be expected?