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Musk Still in Production Hell as Gigafactory Delays Model 3
08 November 2017, 01:09 | Frank Carlson
Now, Elon Musk is keeping vigil at the Gigafactory, where theModel 3 is manufactured, spending most of his waking hours - and then some typically meant for sleeping - there, even conducting Wednesday's call from the plant.
The production problems helped produce a net loss of $3.70 per share in the quarter - 62 percent greater than the anticipated loss of $2.28. "In the grand scheme of things", Musk said, "this is a relatively small shift".
Tesla brought its own top engineers in to focus on the battery module manufacturing automation to "fine-tune the automated processes and related robotic programming". After launching the mass-market Model 3 sedan, Musk at the time said the automaker would manufacture 20,000 of those vehicles by December, but had only produced 260 as of Oct. 2. Although the company had promised to deliver 1,500 Model 3s in Q3 2017, it only delivered 266 total.
Tesla will no longer reach its long-stated goal of producing 5,000 Model 3 cars per week in 2017, pushing that deadline back amid production hiccups and a massive $619 million quarterly loss.
Still, Musk acknowledged that he'd expected to have made more progress already, and "be more like in level seven by now".
So far, it's been a rough ride. The company cited the battery assembly line at its Nevada Gigafactory as the primary constraint in Model 3 production, adding that it will reduce Model S and Model X production by 10 percent in the fourth quarter to move inventory and dedicate more manpower to Model 3 output. Tesla sold $139 million of these credits in Q3 2016, and $100 million just last quarter, but this quarter's ZEV sales totaled less than $1 million. Zone two is the really big issue, and one in which a subcontractor dropped the ball, and then Tesla only realized how badly it had been dropped very recently.
Musk and Chief Financial Officer Deepak Ahuja wrote in a letter to shareholders that it was difficult to predict how long it will take to resolve all bottlenecks, or when new ones will emerge. The researchers used artificial intelligence to teach their system the preferences of each voter, then aggregated them, creating a "distribution of societal preferences", in effect the rules of ethnical behavior in a car. Highlighting the complexity of juggling a production ramp across not just a global supply chain but across literally dozens of individual production lines that are effectively prototypes, Tesla shared that some manufacturing lines have only demonstrated a throughput rate of 500 units per week. A manufacturing presence in the country could boost its revenue in the world's largest electric vehicle market. He recalled being on the assembly line at 2 a.m. on a Sunday to help diagnose robot calibration issues and said work was being done seven days a week to solve the problems vexing the gigafactory.
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I don't think the pitch will change too much, but the dew might be an advantage in the second innings. Munro said he found the most success when he watched the ball, rather than premeditating his shots.
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