Bloomberg's Inside Look At Tesla's Model 3 Factory (bloomberg.com)

An anonymous reader shares an excerpt from an exclusive inside look at Tesla's Model 3 factory in Fremont, California: On the Model 3 body line on a Tuesday afternoon in early June, everything is still. Tesla is just coming off a week of downtime during which workers added a new production line, improved ventilation after a fire in the paint shop, and overhauled machines across the factory. But even after the changes, there are kinks to work out. Suddenly, dozens of robots snap into frenzied action, picking up door panels, welding window pillars, taking measurements, and on and on. This robotic dance is a visceral representation of what Tesla chief executive Elon Musk has dubbed "Alien Dreadnought," a code name for the factory that evokes an early 20th century warship, but with extraterrestrials.

The stakes couldn't be higher for Tesla, which is sprinting to produce the Model 3 in quantities great enough to turn a profit. But so far, the plant's choreography has been choppy. The flow at the factory in Fremont, California, is constantly interrupted while robots and humans are trained, retrained, or swapped out. If Tesla can't make this dance work, it will be remembered as a lesson in the dangers of irrational exuberance for automation. Success, on the other hand, could transform the car industry.

Comments

I think they'll succeed even if they fail

[Kjella]

Take Amazon, it had the most ridiculous negative P/E ever. At the height of the dotcom boom I got a free $10 that I used to buy a $4 book with $6 shipping (international). How the fuckity fuck fuck to you make money on that? By staying the course with enough VC money that eventually you'll surface. That's kinda what I'm thinking about driverless cars at the moment, even if it doesn't make sense... even if they never recover their investment... there's so much money and so many corporations behind it that it'll happen. When I'm a senior citizen in 25+ years I'll have a self driving car. I'm probably not going to Mars, but that's okay. And the singularity is not happening. Immortality certainly not. You have a life, enjoy it.

Re: I think they'll succeed even if they fail

[Bing Tsher E]

'Driverless cars' is a ridiculous moving target. Maybe Tesla should stick to their original mission: electric cars with steering wheels.

Re:I think they'll succeed even if they fail

[nojayuk]

Take Amazon, it had the most ridiculous negative P/E ever.

Amazon was growing out a lot of infrastructure, expanding their customer base and developing AWS among other things as it ran astounding deficits for a decade or more. The people lending them money could see where it was going, there was a roadmap to profitability. They could have failed but they're a success story now. Tesla has a single factory, a lot of debt and a track record of not meeting the Boss's production promises quarter on quarter.

If Musk is indeed overnighting at the plant, looking over everyone's shoulders while they try and fix what's wrong then they've got even more problems. Imagine coding under pressure and then the CEO sets up camp in your office...

Re:I think they'll succeed even if they fail

[sfcat]

Amazon stands on top of its market, regardless if EV and self driving cars take off Tesla will only have a small part of the pie ... Amazon's money was better spent.

Keep telling yourself that. Where are all those batteries for those other car companies EVs coming from again? You can't just put a bunch of laptop batteries into an EV and sell them for a profit (anymore). You need to use a type of battery cell with a cost below a certain price point (about $150 per Kwh I believe) and nobody else currently is doing that. Hell, there aren't even plans to make a non-Tesla factory to build such batteries. Telsa will have at least a 5 year head start on the rest of the car companies and by that time, it will already be over. GM loses money on every Volt and Bolt sold and that won't change unless they start making their own batteries at scale. GM makes a small number of EV batteries at very high cost currently and GM has no current plans to scale up to the point where they can make those cars economically.

Also, you are betting that people want to buy cars from car dealerships (really, never bought a new car have you).

Finally, you are betting that car companies will entirely change their basic culture and start making EVs. Go to any car company's HQ and talk to the employees and the real problem will come into view. These folks simply don't want to change. And by the time they figure out how completely fucked they are, it will be entirely too late. It happened with every other type of business when a new business model becomes viable. The old guard gets crushed. It happened with Walmart vs Amazon. It happened with MS vs Google. It happened dozens of times before that in many industries including many industrial businesses. It will happen again, its one of the few patterns in life that happens with such high certainty.

Bloomberg? Why?

[whoever57]

Bloomberg has published a slew of negative stories about Tesla, so why give them an exclusive like this? Is it some attempt to get Bloomberg to change its obvious stance?

To support my assertion of Bloomberg's negative stance, I point readers to Bloomberg's Model 3 tracker, which has been and remains consistently low in its estimates, without acknowledging that its model is producing wrong numbers. Musk announced that Tesla is producing 3500 cars per week, while Bloomberg's estimate is 2560.

Re:Bloomberg? Why?

[AlanObject]

Is it some attempt to get Bloomberg to change its obvious stance?

That would be my guess and if I were running PR for Tesla that is what I would do.

My housekeeper's husband works at the plant (we live about 3 miles away) and he tells me it has become pretty regular for Musk to be spending overnight at the factory. Whatever else you might say about him he seems to be taking it seriously.

Re:Bloomberg? Why?

[Rei]

The exact quote is: "Despite our production difficulties, all parts of the Model 3 production system have demonstrated a 500 car per day capability, or, a 3500 car per week capability, and we just did a big set of upgrades and are spooling up the production lines again. I think it's quite likely that we will achieve a 5000 cars a week by the end of the month."

This was with 2 GA lines (the biggest bottleneck). They just built a third.

I don't think there's any malice in the Bloomberg tracker. I think it's just hindered by too long of an averaging period on their algorithm. It averages in planned line downtimes in with line production rates, which you don't want.

Re:Bloomberg? Why?

[Rei]

You're confused. The "pulling people off shifts" was first off due to planned S/X downtime, but more importantly, that was not this quarter. That was at the end of last quarter, and to achieve 2020 vehicles per week, not 3500. And more to the point, they not only maintained that rate for several weeks after the other lines went back up (all the way up until the Model 3 lines' next scheduled downtime), but increased it.

Re: Bloomberg? Why?

[sfcat]

Right, it's a republican thing to:

Take salt shakers of restaurant tables; Limit soft drink sizes; And push for anti-gun laws.

You're right, Bloomberg is a raging conservative.

Its a greed thing. Tesla is the most shorted stock in history. $12 billion is bet against Tesla. Most of those positions were initiated a few weeks/months ago when TSLA was trading in a range between $280-305. Recently the price rose to $325 (closed at ~318 today I think) and many short positions were stopped out and a brief short squeeze happened but many traders re-entered new shorts at higher entry prices and defended against a total rout (for now). If the price pops again (because Elon tweets that 5000 model 3s were produced that week), those shorts are fucked and several billion dollars will be lost by hedge funds (and gained by those, like me, long on Tesla). This is the battle being carried out right now. Its mostly retail investors in CA taking on the hedge funds in Conn and NY and the retail side is winning big right now (which rarely happens). If too much more good news comes out about Tesla, it will be all over and those shorts will be squeezed entirely out of the stock (by their risk managers). This might be an effect of our current political divisions, but its entirely outside of politics and an interesting case of the market deciding something against some very big moneyed interests. Its the rare case where the "masses" have more money than a few billionaires and are bullying them around. Its also the rare case where engineering knowledge is far more valuable than accounting knowledge in the pricing of a stock.

Re:Bloomberg? Why?

[sfcat]

The exact quote is: "Despite our production difficulties, all parts of the Model 3 production system have demonstrated a 500 car per day capability, or, a 3500 car per week capability, and we just did a big set of upgrades and are spooling up the production lines again. I think it's quite likely that we will achieve a 5000 cars a week by the end of the month."

This was with 2 GA lines (the biggest bottleneck). They just built a third.

I don't think there's any malice in the Bloomberg tracker. I think it's just hindered by too long of an averaging period on their algorithm. It averages in planned line downtimes in with line production rates, which you don't want.

Its also hindered by the fact its only counting US deliveries. For reasons having to do with preserving the tax credits for more customers, Tesla has only been delivering cars to Canada and foreign markets (left side steering only) lately. This has basically hidden the real model 3 production numbers for the last couple of weeks and those numbers won't become accurate again till sometime in mid-July. Until then, we are all just guessing.

Quality Control

[tgibson]

I don't follow Tesla closely; I found it an interesting read. Having just rid myself of a lemon (not Tesla), I was impressed with this excerpt:

Tesla says it has 47 robots deployed in scanning stations throughout the body line. They measure 1,900 points in every Model 3 to match them to design specs—with a precision of 0.15 millimeters. Torque measurements are also automatically recorded for every bolt that’s fastened. During the final test drives on the track, sound recorders measure squeaks, rattles and wind and road noise that a test driver might miss. All of this data is stored with each car’s unique Vehicle Identification Number, or VIN, so service centers can trace any issue back to a root cause in the factory. The idea is that Tesla will be able to improve its cars, even after they're in a customer’s driveway.

I hope they succeed and force other carmakers to follow suit.

Re:Quality Control

[greenwow]

Well that's ISO-9001. You don't fix quality problems. You only document them.

The manufacturing company I used to work that I did machine controls for for was certified based on customer contract requirements rather than an actual improvement to the quality. It was fine producing crap as long as it was documented.

> measuring defects

The company I work for now does a ton of QA and create reports, but for most of them there's nothing actionable from that information. Don't measure something you can't use. It's a waste of time.

Re:Quality Control

[Dutch Gun]

I'm not sure I agree. This seems more like the manufacturing world equivalent of automated unit and integration testing of software. Essentially, if anything starts going wrong due to a minor change you make, you're made aware of the situation immediately and can correct it.

Essentially, it's a lot of time and effort that on first blush does absolutely nothing, because in the optimal case, nothing ever happens. But the end result is that you can make minor changes or corrections with more assurance that you're not negatively affecting the quality of the final product.

Re:Quality Control

[hackertourist]

What makes you think other manufacturers aren't already doing this? Dimension scanning and torque figure records are SOP. Don't know about audio recordings of the test drive. Those are going to be pretty hard to match to a specific defect, though.

Re:Quality Control

[EnsilZah]

SpaceX managed to track down a faulty strut by acoustic triangulation of a few milliseconds of data from some accelerators, I'm sure it would be much easier for Tesla in a controlled environment where the vehicle doesn't explode.

Tesla is not unique here. Automotive is HARD

[rahvin112]

Automotive factory spinup is HARD. Your typical car takes over 3-4 years to spin up to full production and they don't make major changes to any model for around 5 years to maximize the CapEX spending this requires. Telsa is new to the game but many of the people they've hired aren't. They did try to do to much automation but otherwise they are experiencing the same growing pains every automotive manufacturer does. Vehicles are hard to build, they have thousands of parts with tight tolerances.

For example, every time Toyota or GM changes a car model they'll design that change 3-4 years before it goes into production and they'll spend a year or two on a test production line refining the production and making part changes to accommodate the best work flows before the new production line is rolled out to a full production facility. Tesla as a new automaker doesn't have this option (they don't even have a test factory), they are doing the testing while building production cars and it's a painful and expensive process that will have fits and starts. Just like the model S they will change that cars subtly as time goes on and they refine production making part changes and swap outs to improve production flow and errors.

Re: They said this about the AI's

[Bing Tsher E]

Playing go is just abstract logic. It's entirely software. Building cars doesn't scale out in any way similar.

Profit vs. achievement

[RonLillycrop]

It strikes me that somehow Elon Musk has managed to chase principled objectives completely independent of financial performance and in a way that has completely fooled the people with the control of money to parting with what they have. Here's hoping that the ruse persists since the actual impact goes way beyond making people some money.

Re: Transform the industry

[RonLillycrop]

I've had some direct experience dealing with both Toyota and Tesla and their approach to automation. 100% completely incompatible. Toyota: study something methodically, systematically and comprehensively and get better over time. Win. Tesla: Just do it. Fail. Think about it a very tiny bit and then Just do it again. Win. Both good at certain things but a marriage would be the worst thing for both.