There is additional concerning news regarding the ongoing Tesla Model 3 sedan production ramp-up, news that points to another high-stress period for the innovative Tesla manufacturing and supply teams in the weeks to-come.
Both BuzzFeed and The Wall Street Journal have reported that Tesla has informed employees that the auto manufacturer has suspended production for a period of 4-5 days this week to make needed production or supply chain modifications. According to the Buzzfeed report, the announcement of the production pause came with little warning, according to current Tesla employees. During the pause, workers are expected to use vacation days or stay home without pay; a small number of workers may be offered paid work elsewhere in the factory.
As noted in our last Tesla focused commentary, CEO Elon Musk has finally acknowledged that the goal for excessive automation of Model 3 sedan assembly was likely a mistake. Musk tweeted on April 13th: “Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”
With Musk once again taking-on direct personal leadership of manufacturing, efforts are likely underway to focus more on achieving the Q2 required production output goal with a combination of automation and human labors. This week’s work suspension for adjustments provides ample evidence of a changing manufacturing process.
Last week, U.S. news network’s CBS This Morning featured a tour of the Model 3 production line, along with an interview with Musk. The event was characterized as the first time a major news network’s camera could record manufacturing operations. Musk indicated to the program co-host Gayle King, “I’m definitely under stress, so if I seem like I’m not under stress then I’m gonna be clear, I’m definitely under stress.”
Other Musk comments shared in the video report include: “We were able to unlock some of the critical things that were holding us back from reaching 2,000 cars a week. But since then, we’ve continued to do 2,000 cars a week” Asked if that pace is sustainable, Musk replied, “Yeah, yeah…. We’ll probably have, I don’t know, a three or four-fold increase in Model 3 output in the second quarter.” Musk also acknowledged what others continue to speculate, that the volume of completed battery modules produced at the Gigafactory have been lagging as-well.
Adding more to Model 3 manufacturing visibility last week was a report from business network CNBC indicating that the car manufacturer is attempting to fix what was described as a significant volume of flawed or damaged component parts shipped from suppliers. Visual images in that report include racks of Model 3 parts located at nearby machine shop for needed custom rework. The report cites former and existing employees of the company indicating a higher rate of defects than industry norms, both from suppliers and from incurred Tesla component design changes. Musk’s passion for the product is in what he describes as dimensional precision.
Such a condition can be interpreted in good, and not so good dimensions. The former is an indicator that Tesla’s supply chain planners are focused on time sensitive needs. A local machine shop may likely have quicker turnaround for modifying sub-standard parts than the time required to ship these components back and forth from domestic and overseas suppliers. The not so good dimension is an appearance that component design is still being tweaked. Hence, contrary to prior Tesla statements indicating that the Model 3 supply chain is operating to plan, it may also be stressed with bottlenecks in certain areas.
Regarding the next two months, last week’s BuzzFeed posting indicates that Tesla workers assigned to the Model S and X assembly lines have been informed by the company that they will be operating throughout all weekends in June, believed to be on a mandatory basis. It’s likely a safe bet that the Model 3 line and the relatively new battery Gigafactory will be in a similar situation given the ongoing series of events and ongoing adjustments.
Another safe bet- Tesla’s product plant and its supply chain have now become the most watched by multiple stakeholder interests.
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