
The Future of Tesla Hinges on This Gigantic Tent - dismal2
https://www.bloomberg.com/news/articles/2018-06-25/the-future-of-tesla-hinges-on-this-gigantic-tent
======
aresant
The Tesla story has effectively become a manufacturing story.

Can they meet production targets?

Can they maintain product quality while they scale?

Will they run out of money before they solve the CapEx intensive, low margin
problem of automobile manufacturing!!!?

Despite the scrapiness of the "build a gigantic tent" story it's a bizarre
risk.

Musk's desire for full vertical integration obviously mirror's that of Steve
Jobs - who ALWAYS claimed a core apple advantage was total vertical
integration.

But at Apple with the iPhone Job's knew he was outgunned by manufacturers and
OEMs by a long shot.

And calculated that building fabs, plants, etc required a different set of
skill sets and capitalization than he had at the time.

Where Jobs was a genius was that he maintained control over core manufacturing
innovations (machining) and IP, while actually taking on very little
manufacturing risk.

There's a really fascinating overview of this, published in 2011 and key quote

"China made Steve Jobs' revenge possible. Chinese OEMs could produce plenty of
iPods, iPhones and iPads to meet demand, leaving Apple free not only to design
as it wished, but to control what it designed."(1)

I wish for Tesla's sake that they'd taken a similar path, and I think a likely
outcome on the downside of the Tesla story is a restructuring around a model
like the above.

In the meantime I'm still rooting for them!

(1) [https://www.thestreet.com/story/11737628/1/apple-and-the-
ver...](https://www.thestreet.com/story/11737628/1/apple-and-the-vertical-
integration-dance.html)

~~~
Animats
_Musk 's desire for full vertical integration_

One reason for Tesla's vertical integration may be that they want ordinary
components like seats done Their Way, but they don't buy in big enough
quantities to get major suppliers to do that. This is why you see a lot of
high-end but low volume cars with Recaro-branded seats.

~~~
joobus
Maybe Musk just has a severe case of Not Invented Here syndrome.

------
Animats
The previous word from Musk was that they just had some minor problems with
their production line and were on track to ramp up to the normal production
rate for the line. Starting up a new line for a new model sometimes takes
quite a while, and Tesla had a much more optimistic schedule than is normal in
the auto industry. But they seemed to be getting that under control.

Now they're operating a temporary manual assembly line in a tent? This
indicates much bigger problems. And a coverup of them.

~~~
rossdavidh
Not really a coverup any more. He has already admitted that they went full-in
on robotic automation that has not worked out.

------
ux-app
> "I don’t think anyone’s seen anything like this outside of the military
> trying to service vehicles in a war zone. I pity any customer taking
> delivery of one of these cars. The quality will be shocking"

Ouch, that is scathing, proof will be in the pudding though. If there are a
lot of QA issues (which it seems reasonable to assume) then the recall rate +
bad press might sink them. It's a scrappy (maybe desperate?) move, one which
you would expect from an underdog, so good luck to them.

~~~
manicdee
That quote is entirely based on mischaracterisation of the new building as a
tent, open to the elements. It’s a hangar with a synthetic cloth skin instead
of metal or wood cladding.

Nothing in this Bloomberg article reflects reality.

~~~
ux-app
the characteristics of the building are mostly irrelevant and a discerning
reader will pick up the tent characterisation as hyperbolic. The main thrust
is that the decision to set up an ad hoc manufacturing plant could be seen as
either

\- chaotic/desperate or

\- pragmatic and brilliantly subversive of the status quo.

I'm sure we'll get lots of articles painting both sides. Time will tell which
one of the two it is.

~~~
manicdee
It is both chaotic and brilliant. Why disrupt the existing lines when you can
just build some new factory space really cheaply?

------
martimarkov
Here is better article that actually goes into explaining that it’s just part
of the assembly line in order to fix a bottleneck (as in `in addition to`).
[https://electrek.co/2018/06/25/tesla-model-3-battery-
product...](https://electrek.co/2018/06/25/tesla-model-3-battery-
production-5000-unit-per-week-says-gigafactory-employee/)

Seriously this Bloomberg article seems just as a scare write up to drop the
share prices...

~~~
dismal2
That article is about battery production, and not about actual model 3
production

~~~
martimarkov
It talks about the same manufacturing line being in a tent. And battery is
mainly in the title, the article focuses on the model 3

------
nil_is_me
According to recent press coverage, Tesla will both be bankrupt within the
year, while killing every driver that attempts to use Autopilot; and at the
same time be the savior/catalyst of the automobile industry, bringing electric
and self-driving vehicles to the masses.

Can we ratchet down the Tesla hysteria a few notches?

------
aphextron
>"The tent doesn’t have air conditioning, according to the city documents."

This is absolutely insane. The thought of making workers assemble cars in a
tent in Fremont with no AC in the middle of summer is just mind-blowing. That
thing is going to get over 100 degrees every single day. I think Elon finally
lost me on this one.

------
manicdee
> What gives manufacturing experts pause about Tesla’s tent is that it was
> pitched to shelter an assembly line cobbled together with scraps lying
> around the brick-and-mortar plant. It smacks of a Hail Mary move after
> months of stopping and starting production to make on-the-fly fixes to
> automated equipment, which Musk himself has said was a mistake.

> “The existing line isn’t functional, it can’t build cars as planned and
> there isn’t room to get people into work stations to replace the non-
> functioning robots,” Warburton said in an email. “So here we have it—build
> cars manually in the parking lot.”

When the journalist abandons fact checking and simply goes with publishing
this kind of tripe, the reader has no other option but to disregard everything
the journalist, their editor or the publication touches.

------
esaym
I'm still rooting for him. It looks bad, but honestly isn't that different
than any other assembly line.

Once upon a time I worked as an 'aircraft mechanic' for both L3 communications
(US Navy contract) and Boeing (US Airforce contract) out in Texas. Both jobs
required the removal of the wings of larger aircraft (P3 orion, 737).

Some times we had a hanger and sometimes not. It was pretty brutal, but back
then in my youth I'd take the 110* heat over the cold winter. You were
miserable and sun burnt in the heat, but the cold low humidity winter was
PAIN. Skin on your hands would start cracking open, along with the skin on
your mouth and you'd be getting blood everywhere. A lot of our time was spent
inside the wings. Hard enough with just a t-shirt on, but really difficult
with large down jacket on... Usually I'd have to just leave the jacket off and
bare it out. Even worse was inside the wing was considered a 'confined space'
by OSHA so that mean you were supposed to have a duct in there with you
blowing fresh air. But in the winter I'd take breathing in fumes and sanding
dust over cold air blowing on me...

All in all, we'd pull the wings, disassemble large portions of them depending
on the contract and then reassemble with replacement spars, ribs, etc. We did
it, and the planes are still flying (I guess) so I don't see why something
similar can't be done in the auto world. Of course I guess the difference is
the government was paying the company about $180/hr and the company gave us
$22/hr, so they had money coming in..

------
AKifer
"I pity any customer taking delivery of one of these cars. The quality will be
shocking". I'm wondering what could affect the quality of the cars if they
work under that structure. To me all these critics come from business analysts
without imagination and pragmatism. I praise people that push boundaries of
what's possible, go Tesla.

------
grizzles
I used to work for Chrysler & Mercedes. Imo, the tent is a really smart way to
increase production throughput. Here's why I think so:

My guess is that Tesla is pushing the cars through the body shop, paint shop
and then partially pushing them through whatever their analog would be to the
chassis line in a standard factory. That line would be far simpler in an EV.
Together those comprise three fifths of the assembly line, with only Trim +
Final car left, which are the two fifths of the assembly line that would be
easy to relocate to the tent, since most of the stations are human operators
using hand tools. That's where most of the material and parts handling is and
sounds like where their conveyor belt problems were.

The first two lines are totally automated and have been in all factories for
20+ years. As far as I'm concerned if they can run the first three fifths of
the line at 5000/week then they will have made it.

Elon is a hell of a leader. If I was a short, I'd have covered weeks ago.

~~~
asfasgasg
Oh weird. My guess is they miss their estimates again. They have been missing
for months running, so it seems most likely that they will miss again. Doesn't
mean they won't catch their aspirations eventually, just it doesn't seem
likely that today will be the day.

~~~
cjhopman
Their aspirations were an "alien dreadnought" manufacturing these cars. How
the goalposts have moved...

------
amluto
I think Tesla could have taken an alternative, if very non-Elon-Musky
approach. Their stock was sky-high based on the assumption that they could
dominate EV production and sell huge volume for several years. Instead of
building an entire new assembly line from scratch with debt financing, Tesla
could have gone big. They could have done an _equity_ deal to buy an entire
car company with a flexible assembly line. They could have continued producing
the legacy cars _and_ produced Teslas. And they could have taken advantage of
the acquired expertise and supply lines to get NUMI up and running much more
efficiently.

Subaru, for example, would have been a bargain.

~~~
grizzles
I don't think Tesla would get enough out of the deal since product changes
require factory revamps that are hugely expensive due to all the write offs.

It's an awesome idea though. I wonder if it could be adapted slightly. Maybe a
related one would be for Tesla to buy a new battery factory / batteries or a
massive amount of cobalt+lithium with equity. Those would all save them a ton
of cash in the short term.

~~~
amluto
I think that modern car assembly lines are designed to be very adjustable. Big
car companies introduce new body shapes all the time, and it’s no big deal.
And they already have full supply lines to build seats with seatbelts, seats
with airbags, trunks, sunroofs, etc. The only major difference between a Model
3 and, say, a new variant of any other sedan is the drive train and battery.
Tesla could have focused on that and let existing experts built the rest of
the car.

------
kilolima
Tesla at least has a tent in a benign climate, the Russians setup their
manufacturing base in Siberia right out in the open and were able to match and
then exceed German production. Meanwhile, German industrial production made
good its losses and increased even while having their factories bombed out by
strategic bombing.

------
spditner
I recall that Saturn went down a similar path
([https://www.youtube.com/watch?v=FNrfqHaEeYg](https://www.youtube.com/watch?v=FNrfqHaEeYg)),
where they manufactured a lot of the components in house. I wonder how they
managed to pull it off.

------
recycledmatt
Well executed automation is extremely space efficient. Poorly executed
automation pretends to be space efficient. Rip out all the conveyor belts and
add in room for Work In Progress and for people to execute their processes and
I can see why you need an extra assembly hall.

------
dismal2
Why was this flagged?

------
aslkdjaslkdj1
“The existing line isn’t functional, it can’t build cars as planned and there
isn’t room to get people into work stations to replace the non-functioning
robots,” Warburton said in an email. “So here we have it—build cars manually
in the parking lot.”

This theory makes sense to me. Changing a over-automated line to one that is
safe to use by humans must be way more expensive and time consuming then just
rebuilding the whole thing in the parking lot. I imagine this line will have a
pretty hefty defect rate though.

~~~
djrogers
Why would a car built in a 40+ year old factory have lower defect rates than
one built in a tent? Honest question here...

~~~
pranjalv123
Because you've had 40 years to iron out any problems on the line.

~~~
manicdee
The oldest line producing Tesla vehicles is a decade or so old, and is housed
in an old building designed for someone else’s production line.

------
sulam
On the list of "most ambitious humans", Elon Musk is probably near the top of
the list. (Of course it would have to be some kind of blend of ambition and
accomplishment, the most ambitious person on the planet could well be living
in his mom's basement eating pizza right now).

I wouldn't want to work for him (I hear he's a nightmare), but he sure makes
for a nice counterpoint to the rest of the daily news!

~~~
jcims
I think I'd like to work for him for a little while. There's something to be
said for the camaraderie built in high stress environments, and it would be
worth it for the stories.

~~~
sulam
Yeah, the stories from environments like that make for interesting “ghost
stories” for your co-workers once enough time has passed. But man living
through it isn’t nearly as fun.

