May 19, 2017

MAYBE: Elon Musk’s Production Plan For New Tesla: Too Fast, Too Furious?

Model 3 production risks run high. Tesla plans to bypass the usual manufacturing-prototype stage and go straight to full car production. Most automakers also test their production-line process for a new model by building vehicles with relatively inexpensive prototype tools. Tesla is skipping that step as well.

By omitting steps, Tesla hopes to save time and money. The risk is that manufacturing problems could be costly to fix, slow production and damage its reputation.

As Tesla moves to ramp up production another huge project is playing out, in partnership with Panasonic. Together they are building the massive battery-production plant in Nevada that’s crucial to reaching Model 3 pricing goals.

At the corporate level, Tesla also is working to integrate SolarCity into its business operations.

In the earnings conference call that followed Tesla’s first-quarter results, Musk was asked if any critical outstanding items could slow the Model 3 launch or deliveries.

“There’s plenty of things with uncertainty, but I don’t know anything that would prevent us from starting production in July, and exceeding 5,000 units a week by the end of the year,” said Musk. “It’s been pretty close to the bull’s-eye.”

Prototyping exists to help discover the unknown-unknowns Musk seems so confident don’t exist.