Why new world Tesla needs old world factory relief
Analysts, pundits and commentators have been mesmerized of late by two very big issues facing Tesla Motors. Issue 1: Will state dealer laws allow Tesla to go on selling its cars direct, without a retail franchise network? And Issue 2: How will little Tesla build its $5 billion “Gigafactory” -- a breathtaking plan to build batteries on a scale that vastly outreaches Tesla’s current vehicle sales volume?
I would submit that there is a larger issue closer at hand worth watching: How long will it take Tesla to sort out its manufacturing blocking and tackling?
Tesla CEO Elon Musk recently told a group of stock analysts that U.S. car deliveries will be a bit lower than normal for a while. He explained that Tesla’s assembly plant in Fremont, Calif., is having a hard time turning out all the cars that people want.
That’s not necessarily a bad thing. The art of getting a big assembly line flowing to everybody’s satisfaction has bedeviled carmakers from Honda to Volkswagen.
Musk said that the plant has lately been trying to fill all the U.S. orders it has.
But in the process, customers in Europe “have been waiting for a really long time to receive their car. And so we just have to balance that. We're slowing down U.S. deliveries and trying to make people as happy as possible, given the production constraints,” Musk told the analysts.
Tesla is currently constructing a second assembly line in Fremont to increase output of its Model S cars. Musk says he is looking for 1,000 a week -- 50,000 a year -- starting around the third quarter of this year.
But relief will not be so easy. Tesla also wants to turn on the tap to start selling the cars in China. And a little further into the future, the added factory capacity in California will have to start turning out another car, referred to as the Model X, and eventually an even higher-volume vehicle.
Everyone should be so troubled to have customers clamoring for cars and new markets beckoning -- and future models in the wings.
But beyond the glow of all that lies the hum-drum reality of mass-producing cars, hour by hour and day by day. Of engineers figuring out endless challenges of parts and processes, and HR managers resolving endless questions from a growing workforce as the pace quickens.
And at the end of every week, the automaker has to make sure it all comes together smooth as silk -- no glitches, no paint drops, no bottlenecks.
I submit that this is the real issue that will prove who this new automaker is. Not the space age Gigafactory or the new age retail concept, but the ordinary old world business of getting mass production up and running.
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