Suppliers, Analysts Doubtful Tesla Can Hit Model 3 Targets
The automotive world doesn’t typically move at Elon Musk speed, meaning that the “impossible” targets set by Musk often can’t be achieved either internally or externally from suppliers that make the parts for cars. Musk admits to this in reference to the Model 3:
“Now, will we actually be able to achieve volume production on July 1 next year? Of course not.”
So, when Tesla announced the moving up of Model 3 production and higher production targets, the automotive industry was shocked. Did Musk think his company could actually achieve the impossible? Probably not, but hitting those targets are beyond his control.
Recently, Reuters tapped some industry analysts on the topic of Model 3 production targets and launch dates. Here are a few snippets from Reuters’ article titled “Exclusive: Suppliers question Tesla’s goals for Model 3 output” –
- Musk said the Model 3’s simpler design, new production hires and enthusiastic suppliers would help the company make its goals. He said Tesla would drop suppliers that could not meet deadlines and would bring more parts production in-house than traditional automakers typically do. He did not specify how much or which parts.
- One complication is that Tesla has not finalized the Model 3 design and specifications, said automaking consultants and supply executives who asked not to be identified because Tesla prohibits them from disclosing contract details.
- Under ideal conditions, automakers have launched new assembly lines in 18 months, but they typically take two to three years after the first tooling and supply contracts are signed, several manufacturing consultants said.
- The company still is soliciting bids for parts and machinery, according to representatives from several of companies that have received them, as well as industry consultants who monitor such bids.
- Automaking consultant Ron Harbour of Oliver Wyman said increasing production at the Fremont plant to 500,000 vehicles in 2018 would require more stamping, welding and assembly machinery that “could take up to 18 months to order and install.”
- Jeff Schuster of industry forecaster LMC Automotive said the goals were “implausible,” in part because Tesla’s battery factory in Reno, Nevada, was unfinished.
It seems that all those in the know think that Tesla won’t be able to pull this one off in the way the automaker outlined in its Q1 report. We tend to agree that it’s impossible for Tesla to actually hit its 100,000 Model 3s built in 2017, but we’d like to think that Tesla will do everything in its power in an attempt to be as on track as possible.
The Reuters article concludes with this oh-so-accurate statement from Frank Faga, a Detroit-based auto manufacturing consultant:
“I’d be really surprised if he can launch production by next July. But this is a guy who says he’s going to Mars. Who am I to say he can’t do this?”
And that is precisely why we like to believe that Tesla can achieve its targets, even if others say no.