A report in Reuters Tuesday sheds light on the frenzied final weeks of Tesla’s all-out push to reach a production target of 5,000 Model 3s per week by the end of June.
Workers claim CEO Elon Musk became agitated whenever the company’s Fremont, California production lines slowed or stopped due to robot issues, employees were pulled off the Model S line to cover Model 3 workers’ breaks, and longer hours with little advance notice became the norm.
Ultimately, Tesla was able to boast of building 5,031 Model 3s in the last seven days of June. But another report raises the question of whether Tesla skipped an important step in the production process in order to reach its goal.
A source familiar with the goings-ons within Fremont told Business Insider that Tesla abruptly ended brake and roll testing of near-completed vehicles. The test was cancelled at 3 a.m. on Tuesday, June 26th, the source claims. Documents sent to the publication show the range of tests involved in this step — tests no longer listed as “critical.”
Brake and roll testing ensures that vehicles leaving the factory display even braking force at each wheel, proper wheel balance, coasting drag, and speed sensor calibration. It isn’t known why this step was cancelled when it was, or who ordered it.
“To be extremely clear, we drive *every* Model 3 on our test track to verify braking, torque, squeal and rattle. There are no exceptions,” said Tesla spokesperson Dave Arnold in a statement to Business Insider. Arnold wouldn’t comment further on the test, including the question of whether Musk ordered it removed.
The same source also questions whether Tesla’s Model 3 production figure is accurate. Tesla’s claim that it “factory gated” 5,000 vehicles could hide the possibility that an unknown number of vehicles were actually built a week prior, but were held back for rework. Once the work wrapped up, those vehicles could have been added to the final week’s factory gating tally. Arnold claims this is irrelevant.
In a message sent to the publication, Arnold said “a small number of cars are built during a week, but factory-gated the following week, just as a small number of cars built the prior week may not be factory-gated until the following week. Both of those points are true for this last week of production, just as it is true every week. We are reporting our production numbers the same way as we always have.”
Both reports again raise the question of whether Tesla can sustain this level of production without burning out employees and machines. The company says it expects to reach 6,000 Model 3s per week by the end of August.
Even if it does manage to build that many Model 3s, one worker told Reuters that a traffic jam going into the plant’s paint shop (where Model 3s had apparently been given priority), as well as the need to pull workers off the Model S line, resulted in Model S output falling 800 vehicles short.
[Images: Tesla]
Caveat emptor…
At this point I’d trust an 1870s patent medicine salesman over this Musk fellow.
I totally agree. What got swept under the rug? That “factory gated” phrase raises a big red flag.
In manufacturing, it is fairly easy to cook the books by splitting hairs on how a product is classified (built/shipped/sold/delivered), working ahead on sub-assemblies to speed final assembly, and banking a nearly completed supply prior to the “start” of the week/month/year. It also works the opposite way with uncompleted units when tax time arrives. Manufacturers have been doing this for years.
I have no doubt that Tesla built that many vehicles in a month. In a sense, that’s easy. As somebody who has worked in manufacturing for my entire life, I want to see what these numbers look like as a cumulative quarter, or six-month period. Those long-term numbers tell the tale whether your company is doing things right.
Tesla is publicly traded. There has been some fast and loose language that is very unchariteristic of publicly traded companies over the past 18 months. These statements, I believe, have brought on greater scrutiny by those on Wall Street.
Unfortunately there does’t seem to be anyone that Mr. Musk has a relationship with who can look at him and say: “Just shut up for a while. For your sake and company’s sake, just STFU.”
That’s the sad part. SpaceX has Gwynne Shotwell running the show, and (while not perfect) they’re rather careful about their messaging and seem much more disciplined in their actions. And is apparently able to tell Elon flat out “keep your hands off; tell me what you want us to get done and I’ll tell you how we’re going to do it.”
if Tesla had a competent operations and manufacturing chief, they wouldn’t be in this situation. Instead they try to take the absurdity of things like their CEO actively doing stuff on the assembly line and spin it like it’s supposed to be a good thing.
Maybe the fault of the Revenue Enhancement Engineering Department…
“just STFU”
He’s a legend in his own mind.
Surely it can’t be true that Tesla removed 300 spot-welds from the Model 3 bodyshell – on the fly. If so wouldn’t that completely invalidate its type approvals and in particular the results of crash tests.
I was surprised that Tesla were able to issue an over-the-air update to the Model 3 brakes, apparently without any oversight, going from “there’s no problem” to a live update in a few days.
That’s a rumor I wouldn’t bet on, without proof. Sure, they may have removed some welds but even that is questionable. But 300 welds? This, to me, reeks of massive overstatement trying to justify what they believe could be one of the only ways Tesla could have sped up production while having almost no evidence to prove their allegations.
I’ll grant that Tesla does things differently and I don’t doubt they’ve taken some shortcuts to simplify production. What I doubt is they went to the extremes that are being claimed, that would weaken the car to the extent they allege.
We know that Tesla has massive quality issues and has passed vehicles with cracks off onto consumers; Tesla even allowed their Model 3 to ship with breaking performance at near 1950 Nash levels of performance; this company will do anything (including kill its customers) to make a sale.
And since they are really a ponzi scheme that is now a shell game (moving workers from one line to another to meet claimed projections), I wouldn’t trust this company at all on anything it says.
Tesla has earned contempt. Their buyers earn ridicule – these fools think they’ve just bought the electric equivalent of individually wrapped slices of cheese!
The fact that you’re calling Tesla a Ponzi scheme when it clearly does NOT match Ponzi-scheme methodologies tells me all I need to know about your viewpoint.
Can I interest you in a $60K car that was built in a tent at 4am with little or no QA?
The end of the cult of Musk can’t come soon enough.
You, carguy, prove my point succinctly. Let me ask you one question: Why? Why are you so opposed to a man and a vehicle you will probably never know or drive? What do YOU care that he’s doing something that won’t ever affect you? Why?
WTF is “factory gated”?
It sounds like code for “we count cars as produced when they are completely assembled but before they are finished being quality checked or released to consumers”
@NG5: It sounds the other way around. They produce the cars one week, but they aren’t quality checked etc. So, the next week they get counted when they are finished thus artificially pumping up the weekly production numbers for the second week. At least that was my interpretation.
He doesn’t need to meet set in stone production goals or even land on Consumer Reports recommended list. He just needs to show progressive improvements in production numbers and minimum acceptable quality.
Unfortunately, at this point in time the company is run with the only real goal to keep investors happy, keep investment cash flowing and keep the money changers from turning the lights off.
The end customer is not a high consideration. If he can take care of money issues, then they can focus on customers and quality. But right now, if you NEED a car to get you to work and Billy and Sally safely to school and cannot afford to have to pay for alternate transportation, I wouldn’t suggest anyone buy a model 3 right now. Maybe in a year or two.
I hope it all gets sorted. I would like to see additional models and really have to root for anyone who makes a new sedan these days.
+1. This is terrible short-term thinking. I understand why, between investors, impatient potential customers, and his own hubris Musk has boxed himself in, but the end-game is not pretty. Putting a rushed, poorly vetted high-profile product into the hands of many customers is a recipe for disaster.
Where I work our highest production days are when everything goes right and we have the least defects. Lets hope that what is happening here. But we’ll have to wait and see. When you run people and machines at rates that they aren’t designed for bad things happen. Three months we’ll know if they are making cars fast and with a low rate of defects.
“When you run people and machines at rates they aren’t designed for bad things happen.”
So true. But this assumes you’ve been able to consistently run your people and robots at a baseline rate. One that that delivers expected quality at every measurable step.
To date, Tesla has yet to find that baseline for their people, process, and procedures re: Model 3. To ramp up to 120% capacity to hit some arbitrary, promised quota at this point is to guarantee bad things are going to happen — did happen.
Given the complexity of this product, and the risk this decision puts upon Tesla customers, I would be packing my bags if I were in-house counsel or quality control management. The lawsuits, investigations, and blame when these 3s start crashing and/or catching fire can land on Musk, and Musk alone. I wouldn’t want to be going down with him on this ship.
I pity those poor people who are trying so hard to drag Tesla down. From what I can see, there’s almost no verifiable facts in this entire article.
well, like that annoying kid in class, when you go around throwing attitude in people’s faces about how much smarter and better you are than everyone else, you kind of invite some degree of backlash. especially when- despite your supposed smarts- you keep embarrassing yourself.
And I pity the shareholders who rode the unicorn down today -7.25%, and from $360 to $310 since yesterday am when they released their “production numbers”.
+1, Vulpine. Thus far, these mysterious factory “insiders” haven’t had many of their claims proven right. The safety straw man is always a good headline.
Tesla owns the EV market just as it set out to do, and is setting production records each quarter, yet the haters are reduced to quibbling over a few hundred cars here and there.
By comparison, all the other BEV models from other mfrs are sputtering. Yet the haters simply assume Tesla’s buyers are all starry-eyed rich cult members engaged in virtue signalling.
@sce It looks like the 3 might be beating quite a few ICE cars in sales as well. Still, 420k reservations hanging in there. I expected it to drop off.
BTW, with 66k miles my car is still going strong. I think I did get an exceptionally good pack in my car. It was just luck. Just did a 117-mile trip one way this morning in it and only needed one quick charge at the halfway point. Still around 7 or 8 miles before the 12th bar drops. SOH is in the mid 90’s. I might get something else before the winter to hold me over until I can order the Porsche. With more and more new EVs on the road, I want to be able to avoid public charging. I can do that with a longer range car. The Leaf will stay as backup car.
@mcs: Your Leaf continues to amaze me, kind of like this electrical device:
http://www.centennialbulb.org/
Looking forward to see how it goes with the Taycan in your future. Personally, if I had Taycan/Model X money I’d consider the I-Pace instead. No interest in that one?
@sce: I did price out an i-pace. I want a long distance cruising sports sedan next rather than a CUV. The Leaf can soldier on in the hauler role for a while.
When I do get a CUV, I’m looking at the EQC, but the i-pace is a possibility. One theory I have about the Germans is that they are going to be designed for use on the autobahn and might have more robust cooling systems and electronics. The Taycan is being heavily tested on the ring and designed to be tracked. The EQB will probably get the same testing.
I’m still concerned that the hammer will drop on the Leafs battery at any time and it won’t be able to make the long trips. Even worse, Uber Bolt drivers are starting to have a constant presence at some of the charging stations I frequent. These guys drive, sleep and charge, then back to driving. With even the slightest increase in their numbers and I could start getting shut out of quick chargers.
Too bad Tesla doesn’t make money with their core business. That’s the only flaw in their business plan apparently.
@SCE etc…: I don’t necessarily agree with everything you said. Tesla did not set out to “own” the EV market, only to push the other OEMs into helping build the EV market and hopefully shut down ICE production, which would, in time, remove engine exhaust from all the cities where SMOG is still an issue.
Yes, Tesla has had to prove that an EV can replace the ICEV. Yes, they are producing more EVs than any other non-communist OEM… they’re still not producing as many as the Chinese OEMs now, but I expect the Tesla model is notably better in range, performance and durability overall.
But Tesla will never own the market; once the other brands come on all the way, they’ll easily out-produce Tesla. But they’ve first got to commit whole-heartedly to the project and they’re simply not there yet.
“all the other BEV models from other mfrs are sputtering”
I don’t think that’s true, the other manufacturers are dancing around EV’s but not because they’re particularly challenging, it’s because the market is still 99% gas/diesel. You can be sure they’re all running test mules and developing platforms for when Tesla drives the volume to a level that’s interesting to them. They’re doing it this way because they’re risk-averse and focussed on profit, the opposite of Tesla investors. When the EV market hits 5% Tesla will not ‘own the market’.
Also it’s rather silly to characterise those who are critical of Tesla as ‘haters’, they’re not, they’re rational individuals who have seen something that doesn’t seem right.
@Jaffa: I hate to say this, but the vast majority of arguments tend to be against Tesla specifically, not EVs in general, which makes their arguments irrational.
We’re all aware that Tesla’s financials don’t look good. The problem is that Tesla somehow manages to surpass those financials and keep surviving when the “rational” opponents insist they should have bankrupted already (going on at least four years of this, if not six.) The irrationals go out of their way to take every little statement about Tesla, good or bad, and present it as negatively as possible–it’s like they have a phobia against any car bearing the Tesla name, as well as the company itself.
A phobia is an irrational fear or hatred of something–irrational as they can never be directly harmed by that thing.
Just because someone doesn’t share your love of Tesla it doesn’t mean they fear or hate it. To characterize people’s negativity as a phobia is your emotional response to their indifference.
Most people just don’t really care one way or another about Tesla, they evaluate it without emotion and when they do that it looks like something they want to keep away from – for now.
Jaffa, you don’t read the kinds of commentary I read every single day; people calling Musk everything from a charlatan to a fraud, people making ridiculous claims about why something happens where simple examination says the broken part or fire was due to events, not the CAUSE of the event. People sending fraudulent complaints to the NHTSA about Tesla’s cars in order to encourage a government-ordered recall to besmirch Tesla’s name.
Oh, yes, there are many out there absolutely trying to destroy Tesla as a brand and get their cars off the roads. There are only two reasons they would want to do this and that is either a fear of the product itself or a fear that the paradigm shift the company is causing will kill their own profits. Take your pick.
“fear of the product itself or a fear that the paradigm shift the company is causing will kill their own profits”
I don’t think Tesla and their 0.4% market penetration causes any concern among any traditional manufacturers. It’s just an area they’ll monitor, undertake R&D and then enter when the economics work for them. They’re prefectly placed to enter than market because car manufacture is their business, they are very good at it.
The reason Jaguar are early (compared to others) is that they’re also a fairly small volume player, taking some of Tesla’s growth is more important to Jaguar than it is to the likes of BMW, but EV growth will get to a scale where it interests the Germans too.
No one is scared, no-one hates Tesla, it’s just that most people don’t believe the hype and when they hype gets silly so does the response sometimes.
“I don’t think Tesla and their 0.4% market penetration causes any concern among any traditional manufacturers.”
— No? Then why is nearly every other OEM now rushing to get a “Tesla killer” on the roads? Tesla has already changed the paradigm and these people don’t like it. Even the oil companies are having to adopt rechargers at some of their gas stations in order to ‘compete’ with Tesla and other third-party charging networks. Change is happening and these companies are being forced to adapt or risk death.
Sure, the BEVs in particular only have a tiny portion of the market… now. But then, the total number of BEVs available in the world is still less than 3% of the market. What happens when that availability rises to 10%? 20%? 50%? What happens when people realize that starting with a full charge every day means they don’t NEED to visit a gas station ever again, outside of road trips? What happens when they realize that the BEV is ultimately cheaper to own and operate compared to almost any ICEV–including OTR tractor-trailer trucks?
Literally, it has become a matter of adapt or die–assuming they can’t shut Tesla down because Tesla doesn’t compete in any other way. Tesla will not go ICEV… it’s whole business plan is to manufacture and sell Battery Electric Vehicles and to ensure those BEVs have a means to compete with ICEVs in nearly every place those ICEVs have their greatest strengths. Just about the only places a BEV cannot yet compete is in remote-access areas where electricity is not available or in long-term usage where a truck with a 50-100 gallon fuel tank can run for hours longer than current batteries can manage. Sure, Tesla as a brand may only have 0.4% of the market, but BEVs as a whole now carries no less than 3x that market and the number is rising rapidly with each new BEV that hits the market, no matter the brand. This is what Tesla has done to those other OEMs already.
And you say they’re not running scared?
Surely you’ve noticed no-one is rushing, they’re taking their time. Waiting for the right market.
Why are you obsessed that other EV’s are ‘Tesla killers’, they’re just EV’s intended to compete, that’s all. You should calm down.
“No one is rushing…”
— Really? So you didn’t notice how GM worked its tail off to get the Bolt out before the Model 3? You haven’t noticed how Porsche declared in ’15 that they intended to have a “Tesla competitor” out by ’19? You didn’t notice how BMW ran ads in ’16 saying, “Why wait two years for your Tesla, buy a BMW today!”
No one is rushing? What a laugh!
And I’m not the one calling them, “Tesla killers.” That is a direct quote from people crowing about how GM, Porsche, Volvo or whomever’s own BEVs will wipe Tesla off the face of the Earth.
Reminds me of how all the different Android phones were supposed to be “iPhone killers”; or how those Android tablets were supposed to be “iPad killers,” etc.
What a bizarre conversation. You seriously think Tesla with their 0.4% market share, enormous debt and failed automation has the industry running scared.
I can’t waste any more time on this, it’s just nonsense.
Why is it you only require proof of things you disagree with? And the “proof” you submit to substantiate your opinions makes this article feel like every word was carved in stone and verified twice by each and every English-speaking person in the world.
I am getting tired of the hater vs the fanboys on this. As far as I could tell the Business Insider article mentioned seeing a document with the brake test changed to no longer critical. The Tesla spokesman said they test every car so one possibility is that they decided to take the critical test off so they could call the car built but then run the test afterwards before delivery.
The real issue with Tesla is not living or hating it. Instead it is whether it can become a viable business. The company has been running for 15 years, has never made an annual profit and lost ~800 million last quarter. In effect all the cars sold last quarter would need to have had their price increased by a third just for the company to break even.
With objectively lower quality than most other manufacturers, a struggle to produce the model 3, a business model so far that is based in raising capital to subsidise the price paid by owners (remember the model s and x were supposed to provide profits to build the 3) and critically high quality price competitive competition from premium brands here and coming soon (Jag, Porsche etc..) it is entirely possible for model S and X sales to plummet which do provide a good gross margin before any sufficient scale and profit from model can be achieved.
Will that happen? Don’t know but is probably equally likely as not.
It wouldn’t surprise me if the test was moved off of critical status to meet the sales goal. My guess is that it was a case of as many of the cars got it as possible but others were allowed to bypass what was a bottle neck in flow.
They may very well test the rest of the cars before shipping them.
Of course this whole thing could just be a timing coincidence. Maybe they had reached a point where all or 99.9% of cars are passing the test with no re-calibration necessary.
I’d bet that it was done to meet the goal.
I am rooting for Tesla and against Musk.
Love is blind.
THIS COMPANY IS MAKING TOO MANY MISTAKES!! THIS GUY IS KILLING THIS COMPANY. PEOPLE ARE NOT GUINEA PIGS.
Here is everything that is substandard on all these cars. That’s some list, ahhh.
Good teem.
Good men.
You will fix these, before they leave the factory.
I will? I will.
Cungatulations!
Fifteeeeeen-thowsend cars.
I rike you. You make me lawf
Wow, this has horrible optics!
Crap management on display.
This ties right in with the NYT article this weekend that claimed, among other red flags, that Tesla had decided on the fly that they could just skip a few hundred spot welds to move the line along faster.
There’s a rule of thumb that goes: Whenever a headline ends in a question mark, the answer is “no”.
Betteridge’s Law
The Pharma Bro is a more sympathetic figure than Elon at this point. I hope they don’t attempt to rush the paint process, there’ll be runs, sags, and painted over bugs all over the place. That’s when the paint guns aren’t flying around with flames coming out of them.
The press is watching Tesla like a hawk — perhaps extra closely after Elon’s “super crazy, totally next level” diatribes about how the media is crooked and without journalistic principles?
Watching this all play out is fascinating. This will all make a great movie one day. In the meantime, I’m enjoying learning about the auto manufacturing process. As much as we clown on GM, Ford, and all the other big guys, they have production down to an art.
It also makes me look at Teslas differently…in a bad way…as if the emperor’s clothes are coming off.
The Tesla story will make a great book. I’ll put it on the shelf next to the one about the VW diesel scandal.
I’ll buy both of those books but what I’m really waiting for is one from a Chrysler insider’s point of view about the 1998 merger of equals.
all companies are created equal
But some are more equal than other according to Herr Schrempp….
VW will be making electric cars long after TESLA is gone.
Yet even if production targets are missed, it’s by far the best-selling vehicle in the segment, electric or not.
Hyundai sold a crapton of 1986 Excels, too.
A metric craptonne.
Whether it’s the best selling car in its segment has no bearing on whether the profits can sustain the company. The Model S was the best selling car in its segments for years and the company only reported a small profit in only one quarter. The Model 3 segment consists of exactly one vehicle at present – the Model 3. It has no direct competitor. And those sales occured over a period of two years, and are not sustaining – the numbers are dropping.
Scale is not TESLA’s friend. This company is good at tech, not manufacturing. Success in the mass market auto manufacturing is a 4% return on capital. Investors in tech will never accept this rate of return as a reality.
Elon Musk is becoming the UAW organizing people’s best weapon. What a brainless buffoon – he claims eliminating the online brake test is irrelevant. So then
why was this “crucial” step created in the first place in this “advanced assembly” setup?
Too many inspectors under the old shade tree
Gung Ho 15,000th car fail
https://youtu.be/kvW_PDkElho
Screw this. My next car is a Corolla with a manual and I am sad they don’t come with halogens anymore. After turning the corner at 51, I found myself completely uninspired by the industry.
A simple legit explanation:
https://www.cnet.com/roadshow/news/2018-tesla-model-3-brake-roll-test/
The CNet article is what you’d expect from a site the calls itself The Truth About Cars. They did some work and found out exactly what was going on with a simple and truthful explanation. Rather than just regurgitating an article from Business Insider and Henry Blodget (banned from the securities industry for fraud) they did some research.
Slightly off topic, but when did Business Insider become a credible source for news?
Did TTAC Skip Crucial Fact-Checking Step Before Regurgitating Unsubstantiated Blog Post?
Maybe I’m just cranky today, but I’m losing patience with blogs that reblog other blogs that print rumors. If this is The Truth About Cars, maybe do some journalism and find out the truth. Were braking tests dropped and on whose order, and what is the consequence? Find out, then tell us. If your headline requires a question mark, you’re not ready to publish. The Internet has way too many speculative hot takes already.