Tesla Needs Veteran Automotive Engineers To Up Production Volume Ten-Fold In 4 Years

1 year ago by Eric Loveday 41

Tesla's Fremont Assembly Facility

Tesla’s Fremont Assembly Facility

Tesla Production

Tesla Production

Following the reveal of the Tesla Model 3 and it’s 400,000 early reservation, Tesla CEO Elon Musk made it known that the electric automaker will be going on a hiring spree to secure talent and line employees to meet insanely high levels of demand.

As Automotive News states:

“Musk says he is “hell-bent” on making the Silicon Valley automotive upstart a manufacturing powerhouse, but his vision relies on finding veteran auto engineers to ramp up volume ten-fold in four years — a challenge even for established carmakers.”

Tesla’s target, as outlined in its Q1 report, calls for 500,000 electric cars to be built in 2018, followed by 1 million in 2020.

That volume will require thousands of additional employees, including top automotive engineers, but some analysts suggest that Tesla won’t be able to secure that kind of talent.

Automotive News states:

“Musk needs a visionary auto industry veteran, Cuneyt Oge, president of the Society of Automotive Engineers,  said. “But anyone with that kind of experience is going to say, ‘Hey, Elon, you can’t do this in two years.”

“Greybeards” are crucial to build and run factory systems, said Oge. “You can’t just defy the laws of business physics which require you to go down a learning curve collectively to build that systems know-how,” he said.”

Tesla could certainly secure a lot of young engineering talent, but it’s believed that highly experienced individuals will be needed for Tesla to have even a slight chance at hitting its production goals. Those highly-talented, experienced auto engineers may be hard to come by, especially given Tesla’s track record of always being behind schedule and working endless hours in an all-out effort to changed the automotive world.

Despite this report, the early indications that given enough incentive (or money if you will), at least veteran executive help will come to Tesla.

Just this past weekend, Peter Hochholdinger, a 22 year exec at Audi whose duties included serving as production head for the A4 and A5 models, along with the Q5 SUV, took up the roll of Vice President of Vehicle Production at Tesla.  One of Mr. Hochholdinger’s main jobs will be hiring and retaining the right talent to make sure the Model 3 production goals remain on track – no easy task indeed.

Source: Automotive News

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41 responses to "Tesla Needs Veteran Automotive Engineers To Up Production Volume Ten-Fold In 4 Years"

  1. Speculawyer says:

    But do they really have the cheap enough batteries for this?!?!?

    They must right? Or otherwise they would not ramp up like this, right?

    Or is this Elon hubris at work?

    Exciting times. If they pull this off then this is the beginning of the end of ICE in light-duty transport.

    The joys of filling up home, no smog checks, no oil changes, driving on really CHEAP electricity, the ability to put PV on your roof to harvest your own fuel, no toxic exhaust, quite, low maintenance, fewer repairs, 100% torque off the line . . . these things outweigh the very rare annoyance of having to stop for a DC fast-charge on the rare long trip.

    1. Tech01x says:

      Yes, yes they do.

      The pilot phase of the Gigafactory is enough for the initial launch volumes, at over 7 GWh. That’s enough for 115,000 Model 3’s. Another phase coming online in 2017 sometime would propel them well into 200,000, but likely it will ramp itself over the winter of 2017. The two phases would provide enough for well over 200,000, plus the 100,000 S+X from Panasonic’s factories in Japan. The 3rd phase coming online is necessary to hit the 500,000 mark for end of 2018.

      At that point, we’re only talking 3/5ths the Gigafactory.

      They have said repeatedly that the first phase of the Gigafactory is enough to hit their price points, which has already dropped dramatically. Likely their target price point for the Model 3 pack is now $140-150/kWh at the pack level, as compared to $205-215/kWh for the LG/GM Bolt’s pack.

      At 55kWh x $150 = $8,250 for the Model 3 pack, while GM is likely paying $12,600 for the Bolt pack. On a mid-$35k vehicle, that’s well over a 10% price different on the COGS at $4,350.

      1. georges says:

        Ahh. Source please. as far as I know they are still working on the 14% factory and 14% of 35 Gwh is 4.9 Gwh which won’t even supply 100,000 TM3’s.

        1. HVACman says:

          Mary Barra was quoted as saying the Bolt pack by LG was about $150/kWh “all-in”. I think this was from the Q1 2016 stock earnings conference call.

          The only reason everyone thinks that Gigafactory batteries will be so much cheaper is because Tesla says they will save 30% on pack costs when GF is done. Not done yet. Not until 2020 at the earliest. LG will be on the second-generation Bolt battery by then. Could be $110/kWh based on GM’s projections.

    2. Alain says:

      Plus 1

  2. Speculawyer says:

    “Tesla’s target, as outlined in its Q1 report, calls for 500,000 electric cars to be built in 2018, followed by 1 million in 2020.”

    1 million in 2020? What? Are they building another factory in China? Will they have demand for that many cars?

    1. arne-nl says:

      They will likely have 4 models by then (Model Y still to come). So it may be feasible. Of course, given they succeed in starting production of the Model 3 in 2017 and a successful ramp-up in 2018.

    2. get sven says:

      The one million cars in 2020 figure was straight from Elon’s mouth during the last earnings call.

  3. Jeffrey Songster says:

    Simply a goal… If he even hits 60 to 80 percent of it he will still be doing well… It seems to be his method… not usually as wise as underpromise and overdeliver but we will see how he does with this. I sure hope he wins! I also hope Nissan and GM stay in the game and do well enough also to double down in each consecutive round.

    1. wavelet says:

      Question is, does Musk believe the goal is attainable? If not, than it’s not really a goal, and it’s not smart to explicitly talk about it… esp. in official SEC docs.

      1. AlphaEdge says:

        They have a Risk Factors section in their Q1, and they clearly state:

        “We may experience delays in realizing our projected timelines and cost and volume targets for the production, launch and ramp of our Model 3 vehicle, which could harm our business, prospects, financial condition and operating results.”

        So, current shareholders and prospective shareholders are well informed.

        The risk section covers the Model 3 in plenty of detail.

  4. Ob1 says:

    Looks like Elon is going with the all out “SHOCK AND AWE” strategy. One million cars in 2020, battery packs below one hundred dollars per kilowatt hour… mic drop!

  5. kdawg says:

    Tesla needs in-house engineers for the car design. Car design for EVs is simpler than ICE cars, but you are still designing a car, and this time it needs to be easy to build.

    As far as setting up the line and equipment, a lot of that can be farmed out to the integrators. That’s what those companies do, and they have been doing it for many decades.

    1. beta995 says:

      Exactly.
      And Duplicating an already built and tested assembly line doesn’t seem to be hard.

      If you’ve got the money, scaling isn’t a problem.

      So, they build the first assembly line, test it, get cars running with good QA. Then Copy the Assembly Line.
      I don’t see a problem here.

      1. Heisenberghtbacktotheroots says:

        You pointed out the problem.

        Build the first line, get it running…

        We don’t know if the existing line is flexible enough to produce model 3. However there might be a chance that it was built with model 3 in the back of the mind (a relatively high chance I think…).

        Assuming that model 3 is less complex than X and S it is well within reach that the line is 3-capable.

        Given that they have spare time on the line and all the PARTS they could teach model 3 to the line. We don’t know how much work they still have on X fine tuning.

        Duplicating a line should indeed be not pose any big problem. However part supply external internal will become more complex. Intra logistics will be the main work… Well I guess they have some spare freaks that can model factory and line and come up with a nice set up.

        Question is how fast kuka and the likes can deliver…

  6. tftf says:

    I don’t need to a comment, it’s all laid out well in the article:

    “Musk needs a visionary auto industry veteran, Cuneyt Oge, president of the Society of Automotive Engineers, said. “But anyone with that kind of experience is going to say, ‘Hey, Elon, you can’t do this in two years.”

    “Greybeards” are crucial to build and run factory systems, said Oge. “You can’t just defy the laws of business physics which require you to go down a learning curve collectively to build that systems know-how,” he said.”

    I only see two outcomes:

    A) Delay Model3 to 2019-2020

    B) Horrible QA on early Model3 cars and ramp-up problems if 2017-2018 plan is kept.

    In addition, I see terrible margins unless Tesla raises the $35k base price to $40-50k.

    1. I see the fact that we are only 6 weeks to finalized design, and even on the reveal – part 1, I heard Elon mention that Tooling is already almost complete – so I see some additional test vehicles being build in the Summer for Durability Testing, Cold Weather Testing, Trailer Towing Tests, Intensive Daily Driving Tests, Advanced Handling, and so on. Further Vehicles will be built for Hot Weather Testing, and possibly for testing DC QC adapters, obviously for the CHAdeMO version they have, and possibly for CCS Adapters in the works. All this while they build up the Model 3 production line , which will be used to build further full on Production Proof Test Vehicles, of which I would expect another 50 or more such test vehicles- all before the public unveiling of the final Model 3 Vehicles and 1st Vehicle Deliveries on Stage, like the Model X.

      What should be the most exciting unveil for either Part 2 or first delivery – would be a stage in California with Elon, AND one in Europe, and one in China, with Elon on screen in the other two, but Company leaders on site, and actual first deliveries in each continent, right on reveal night!

      Won’t happen – since Elon will be staging deliveries of the Model 3 from California first, gradually expanding outward, but would still be exciting to see first delivery in 3 Continents happen all on one night!

    2. beta995 says:

      You have TEAM A build assembly line 1.
      You get the kinks out, then TEAM A builds assembly line 2 in a new location.
      Then they do it again at location 3.

      Where’s the problem???

  7. Get Real says:

    Well tftf, besides once again failing to be ethical and disclose your short position, your self-serving declared outcomes only favor your short position.

    Tesla will sequentially add new lines starting at the end of next year and will expand the production as rapidly as possible to meet the overwhelming demand for the M3 which you claimed all along would never happen.

    The most likely scenario is that Tesla will not produce 500,000 cars in the 2017-2018 time but as long as they get into mass production they will be fine. I could easily see them making 300,000 cars in 2018 and adding 100,000 more in each succeeding year.

    1. real sven says:

      Well Get Real, in the interests of fairness, aren’t you also failing to be ethical by failing to disclose your long position in Tesla, since your self-servings declared outcomes only favor your long position. ¯\_(ツ)_/¯

      1. Get Real says:

        As a military retiree I own no stocks sven.

        I guess you can say I’m long on the USA and I think Tesla’s success is important for that.

        1. tftf says:

          “I’m long on the USA …”

          So do you think stock bubbles are good for the USA?

          Remember the dotcom bubble?

          Or the last housing crisis turned financial disaster?

          1. Get Real says:

            LMFAO and crying at the same time to your lame attempt to flip the script here tftf.

            ALL the financial disasters you mention were primarily started, fed and manipulated by financial stock manipulators and leeches like yourself tftf. That’s not to mention the high-speed trading leeches that siphon off billions of equity that could be used to grow real companies like Tesla. Thats not to mention insider-trading or any of the other myriad ways that you buddies scam their way to riches.

            Elon Musk through Tesla is driving a revolutionary new technology that will create real wealth rather then simply redistribute it as you do.

            You and the Spiegels of this world are right up there with Martin Shkrelis of the world–selling out not only their own country but all of humanity so they can get richer.

            1. tftf says:

              Get real, GetReal!

              First short positions are only a small port of the portfolios I look at and second Tesla (and Solacity) are bubbles in my opinion – your mileage may vary.

              1. Get Real says:

                So your small on shorts, maybe in the shorts.

                Doesn’t help explain your constant anti-Tesla Fud-spreading on the Tesla threads here at IEVs.

                Why don’t you get in your gas car and go back to Seeking Liars?

              2. Mel4EV says:

                I’m on your side Get Real! This site is for people interested in EV’s, not to punt whatever position you might have on stocks. There’s no shortage of investment sites where the bulls and bears can wage war.

          2. beta995 says:

            Bubble. Tesla has 8 Billion in Assets.
            That’s a Battleship not a bubble.

  8. Jim Whitehead says:

    Tesla’s extreme ramp will probably require 3 factories to be built in parallel. It would be logical to build up the Netherlands plant and put a new one in China. Each factory may cost a billion or two. Let the political bidding wars begin.

    Reminds me of a Congressman who supposedly said: “A billion here, a billion there, and pretty soon you’re talking about real money.” – Everett Dirksen

    1. Tech01x says:

      There have been Tesla naysayers the entire time. Plenty thought they would *never* make even 10,000 vehicles, ever. Then it was, they will never make 10,000 vehicles a year, ever. Then it was, well, no way they can make 20,000 a year. Or 50,000 a year. And so forth.

      Tesla’s capacity at Fremont is far higher than most had assumed.

      First, they have facilities at Lanthrop and soon another location a little ways from Fremont. It appears that the actual planned capacity at Fremont is 800,000 vehicles a year.

      Also, the current plant’s high speed line is already a 90,000/year production line. The paint shop is already designed for Model 3 volumes. The stamping units are already scaled to Model 3 volumes.

      The BIW and final assembly lines will need to be replicated twice to handle the end of 2017 production volume. In other words, just building out 2 x the existing BIW and final assembly, we’re talking 180,000 Model 3’s plus the S+X existing volume. Building two more lines in 2018, gets them to 450,000 a year.

      Of course, the Model 3 is an easier to build vehicle… so the actual production volumes would be higher, hence the 500,000 target.

      1. beta995 says:

        And it’s the same ones since Roadster days.

  9. goodbyegascar says:

    Only three years ago, in 2013, The trolls were predicting that the total pent-up demand for premium electric cars was only about 20,000 cars.

    After that, Tesla was supposed to return to extremely low volumes and survive only in their own very narrow niche market.

    Now the trolls are complaining that Tesla will never meet the huge and somewhat immediate demand for their cars.

    I wonder what they’ll be saying about Tesla three years from today.

    1. Mxs says:

      I have a suggestion for you …. Why don’t you shut the as you said trolls up and post some evidence that anybody has achieved anything remotely similar what Musk’s company is trying to do.

      Maybe than you will understand that people think that Musk is trolling because he will say anything to get the necessary cash from investors who are willing to throw it at him, repeatedly.

      1. Stephen Hodges says:

        Oh no, oh no, we have such a big problem, everyone is throwing and preparing to throw more cash at Tesla….. oh what a calamity. 😉
        How does one select GCR articles from, say, three years ago to see what was being predicted? (I’d like to know now, and in another three years time!). Popcorn please

        1. beta995 says:

          Yeah, What if Ford had that problem!!!!
          OMG, People Want to Buy Your Product, and help you build assemblies to get the Product Quicker.

          Why that sounds exactly like an Excellent Business Problem to Have.

      2. goodbyegascar says:

        Tesla is hugely successful. Get over it.

        1. beta995 says:

          They can’t.
          Global Warming is a hoax too.
          And Chem Trails, remember chem trails.

      3. TomArt says:

        To my circumstantial knowledge on the subject, I’d say nobody has. That’s what makes it exciting.

        What makes the overall premise believable is that the demand has outstripped supply 4-years running, and the current 373k reservations for the Model 3 makes an impressive statement on what the true potential of EV sales might be.

        A third of those reservations were collected before they drove the prototypes on stage (118k)! So it is reasonable to say that the overall demand could be much more, once there are actual vehicles delivered to customers and driving down the streets.

        The ramp-up concerns me, however, as I’ve posted before – I was hopeful for the 2020 goal, but moving that goal up to 2018 is worrying, and I’m a reservation holder.

  10. scott franco (No M3 FAUX GRILL!) says:

    “Greybeards” are crucial to build and run factory systems, said Oge. “You can’t just defy the laws of business physics which require you to go down a learning curve collectively to build that systems know-how,” he said.”

    You mean the same people that made US auto manufacturing a union infested business resistant to new ideas, materials and technologies? I’m thinking no….

  11. JWF says:

    Notice how the article uses an interesting oxymoron: “business physics”. There is no such thing in reality. What really is being discussed is “automobile culture”….which is entirely short term money based.

    As far as ramping up large scale manufacturing in a short time, the US did this in WWII on just about every big, complicated vehicle involved. It can be done…if the best, first rate talent is obtained and let loose.

    1. HVACman says:

      Actually, the WWII war machinery ramp-up was largely done by the existing mass-market auto manufacturers – they already had the experienced production management, assembly lines, parts supply chain, and large-scale manufacturing equipment. Going from boutique production to mass-market manufacturing is a different type of step-up. It requires both experience and management team-building as well as having the hardware and floor space. That takes longer and isn’t resolved with an open pocketbook.

      http://www.military.com/veteran-jobs/career-advice/military-transition/how-gm-divisions-tackled-war-effort.html

      1. beta995 says:

        Exactly.
        Same problem, solved.
        Duplicating assembly lines, not rocket science.