BMW’s Production Comments Could Help Tesla Succeed

MAY 18 2018 BY STEVEN LOVEDAY 84

While BMW watches Tesla in its Model 3 efforts, it believes there are better ways to go about the process.

BMW is gearing up for its newest electrification efforts and watching Tesla in the meantime. The Silicon Valley automaker has struggled with the Model 3 in terms of volume production, but it appears that many issues have finally been resolved and much progress is being made. Though BMW has much more experience as an automaker, its electric Model 3 competitor (the i4) and iX3 electric SUV are still years off.

Nonetheless, BMW suggests more human labor, increased flexibility, and greater attention to detail.

Read Also: BMW Group Plug-In Electric Car Sales Up 52% In April

Another Perspective: BMW iX3 And Future Electrification Pursuits: Too Little, Too Late?

Tesla CEO Elon Musk has already admitted that too much automation involved in Model 3 production is his fault. The automaker thought that increased robot-based assembly would help make mass-production an easier reality, but it has come back to haunt the CEO and his production team.

BMW has a reputation for cranking out high-quality vehicles quickly. In fact, the German luxury automaker builds as many cars in two weeks as Tesla did in all of 2017. Now, BMW is going to begin the process of retooling its facilities to have the capacity to manufacture new battery-electric vehicles in tandem with the current PHEVs and gas-powered cars. Company production chief Oliver Zipse shared:

Producing cars in cycles of 60 seconds: That is the deciding factor. To fully automate the assembly process is not our goal, because the human being with its unique properties is unbeatably flexible.

It’s not surprising that Tesla is having a tough time dealing with its first high-volume car. There’s been much talk all along that the automaker would likely struggle when it came to putting out numbers like traditional OEMs or even competing luxury brands. Zipse continued:

Maybe there’s more leeway in the top-end market segment above 100,000 euros ($118,000), but as soon as you enter market segments with volumes like the 3- or even in the 5-Series, keeping costs under control is paramount. You can’t allow yourself to have inefficiencies there.

Sadly, even though it’s expected that BMW will be able to pull off high-volume electric-car output with ease, the company isn’t beginning its newest pursuits until next year, with the electric Mini. Then, four of seven plants will be upgraded by 2021. In the interim (around 2020), BMW aims to release the i4 and iX3, followed by a goal of 12 electrified models by 2025. Zipse concluded:

We are preparing our car architectures and our factories to flexibly integrate this technology. For us, creating that flexibility is the most efficient way to profitably offer electric cars.

We don’t know exactly how demand for electric cars will develop, so flexibility is crucial. The future market demand for electric cars isn’t’ an exact science.

BMW’s flexible approach may make sense for the company. Let’s face it, the automaker has a wealth of experience and resources tied up in ICE cars. It will also save millions of dollars. However, while Tesla can, should, and is revamping its production processes with less automation for greater output, the California-based electric carmaker can’t rely on transitioning ICE car factories and platforms to expedite its situation. This is an electric-only manufacturer here.

We can only hope that BMW will move aggressively forward with its plans and can succeed in the segment. We also hope that its electrification efforts will lean more towards BEVs and longer range PHEVs, rather than sorry excuses of “electrified” models.

Keep the conversation going on our Forum. Start a new thread about this article and make your point heard.

Source: Bloomberg

Categories: BMW, Tesla

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84 Comments on "BMW’s Production Comments Could Help Tesla Succeed"

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So who is making more EV’s and has more back orders for their models than Tesla.

That’s not what this article is about.

I don’t get why the first ball over the net have to set a teenage tone? BMW barely makes EVs.

Tesla gets the good and bad, of Musk. He thinks AI is this existential threat, then capitulates with labor in manufacturing. Maybe soon, the same will happen for drivers, and less-distracting ergonomics.

Advanced AI and car AI are very very very different.

No one – yet Tesla is also the only one in financial peril right now.

Hey, Elon said no capital raises this year! We can take his word for it, right?

Ya Right, they will be lucky to make it to August without needing capital.

So What if he were to raise money ! Is that against the Law ? Companies do it on a Daily Basis . Is Tesla the only one that shouldn’t Raise Capital if they see fit to do so ,for what ever reason…IF THEY RAISE MONEY IT’S AN OPPORTUNITY FOR THE PUBLIC INVESTORS TO GET A PIECE OF THE ACTION!

You meant “financial peril”, that’s projection from the short community.

Mr. Short, U & I Know what I meant & U will eat your Humble Pie after it’s all said & done …

Yup. The idea that Tesla is in significant financial trouble is a Big Lie that Tesla short-sellers have been telling each other for years. The only thing that changes, month to month and week to week, is the latest excuse they’re offering for why they want people to think that’s so!

In the real world, Tesla has recently been extending its lines of credit to avoid needing to raise more capital in the near-term. I doubt that’s going to work for very long, because ramping up Model 3 production to 200,000 a year or more is going to take massive amounts of capital investment. But the good news is that Tesla’s assets have been increasing faster than its debt, so despite the whining from the short-seller peanut gallery, it looks like Tesla is growing strong!

The capital investment has largely already been made and has shown in its financial statements over the last year. The likelihood that they need additional capital is probably well past them.Their focus on increasing production is to start to recoup that capital investment with revenue.

BYD?

what about the back orders?

Exactly. BMW, I love the i3 REX, but you’re only ever going to produce 30,000 a year. Let us know if you change plans.

ABORT ! One a yr. is One Too Many ! …………..lol

Produced and delivered? 2017 BYD

The ix3 is not years off. It is coming next year.

Next year? Official sources say 2020…

Model year.

Model year 2021.

Which means late 2019

late ’19 to early ’30… or later

So it’ll arrive about 2 years before the Model Y.

Yes, because the Model Y will have a three year reservation list to deliver before it is your turn.

“…it’ll arrive about 2 years before the Model Y.”

And no doubt it will cut into Tesla’s market for the Model Y about as much as the Bolt EV cut into Tesla’s market for the Model 3.

Which is to say, not even enough to notice.

your next year for bmw is pluto year not earth year

I think you spelled “Tesla” wrong.

And the iX3 is not a new design, it’s a kludge of a current vehicle.
So, it’s a compromise and may not compete as well as a brand new design would. The i4 may be the real deal.

The iX3 and X3 were both redesigned this year. The platform is not a kludge.

i4 is basically a fully electric 3 series (next generation). It is not a dedicated platform. They might use the long wheel base 3 series (330 Gran Turismo or the China market sedan) to fit more batteries.

Interesting because the VW eGolf is based on an existing IC platform and they’re selling very well. Compromise doesn’t have to be a negative.

With next gen batteries with more density coming, there is no point in a dedicated platform. Clearly Germans have designed their new platforms for both ICE and PHEV/BEV. This saves them billions in comparison to Tesla. Even Chevy Bolt is not a dedicated platform, contrary to what people think. If you compare with Buick Encore, there are a lot of similarities.

But the thermic has no futur, it is a waste of money to invest in

No futur?

Platforms designed to do two or more things, are rather unlikely to do either very well. A compromise is good in politics, but not in engineering!

Regardless of how batteries are or are not improved, compelling PEVs (Plug-in EVs) will tend to be the ones designed from the ground up to be PEVs. In fact, that will become more true as more and more PEVs appear on the market. The multi-platform Outlander PHEV was able to compete when there were no larger PHEV to compete against it, but I doubt it will do well when more models appear on the market.

Tesla should pay attention to BMW, maybe even discuss a partnership in some way regarding production. Maybe this comment by BMW was a subtle invitation? That would certainly benefit Tesla and maybe even BMW. In a few years time Tesla will have to either partner up with someone or become acquired so why not start already now before things get even worse…

It wasn’t an invitation from BMW. The guy was simply stating the facts on lessons learned in the 1990s – the irony is that the factory where GM learned its most painful lessons on human centric approaches was at the very factory in California that Tesla is building its cars. Toyota was the company that drew the industry away from mindless, assembly line automation to create responsive, collaborative manufacturing. Toyota’s kanban system has been applied well outside auto manufacturing and has even revolutionized software development to become more agile. Elon, having come from the hacking style, web startup world of PayPal, probably never had to deal with that more ‘enterprise’ side of the software world that had to respond to requirements and plan for quality. It is easy to ‘disrupt’ software by throwing a few billions of venture capital funded marketing PR to generate buzz for your app. In manufacturing, the buck really does stops with the product.

Do you mean BMW should partner with Tesla now before things get worse for them? The ship is sailing, the fuel people are throwing on Tesla’s phantom fire is burning out. Tesla is about to take off like a spacex rocket and land on top of all their competition at each step of the way just like they did with S and mostly with X. Articles stating outdated numbers looks desperate. Produced as many in 2 weeks as Tesla did all last year? Irrelevant since now their production rate has almost tripled and still increasing. Don’t need to talk about the past to overcook the numbers on the current situation, they’d still look good for bmw.

I dunno. I think Tesla doing business with any legacy automaker would be akin to a software company doing business with Microsoft (at least pre monopoly conviction MS); it never ended well for that software company. Now, selling battery cells, packs, motors, or even whole power trains to other makers, as they have done in the past, wouldn’t be so bad. We might even come to all any car with Tesla guts as a Tesla, just like we call any car with a hemi engine a hemi, regardless of manufacture. 😀

“In a few years time Tesla will have to either partner up with someone or become acquired”

Say, can you lend me that crystal ball for a while? 😉

Seeing the speed at which Tesla is growing (and don’t underestimate the contribution of the energy and solar divisions), that seems terribly unlikely. They are already the de facto leaders in electric vehicles and the entire world is moving to ….. electric vehicles. Go figure.

Yup. A few years ago, the comments by analysts unable to see the handwriting on the wall about legacy auto makers, comments about Tesla having to start using traditional dealerships or to partner with an existing auto maker, might have made sense.

But as Tesla is growing its market far, far faster than any other auto maker of any size, their comments seem more and more like a head-in-the-sand attitude.

Sure, Tesla has made some mistakes by ignoring conventional wisdom from legacy auto makers. But it has made some real innovations by ignoring things those auto makers thought was impossible, too!

Tesla won’t be adopting the legacy auto maker business model for selling cars. It will be the other way around!

Musk already acknowledged the full automation attempt was a mistake. As for BMW their products aren’t exactly paragons of dependability.

Yep, my i3 was delivered with a broken charger, flaking paint, and a foreign object rolling around in one of the headlights. The upside though was that throughout the 24 months I had it, I was able to test out a variety of BMW products as loaners when it was in the shop.

Knock on wood, my 2017 i3 REX has had zero issue.
But, I will admit BMW paid a lot of attention to the i3 before 2017 and a lot of minor improvements, from previous years.

Minor improvements like removing the storage net from the lower dash, the padded wrist rest from console, removing the cargo straps from the cargo floor and replacing CF parts with aluminum?

Our 2015 i3 REx has had zero issues so far.

The right level of automation is about 96% of what it initially was.
And going to 110% next month.

Another Euro point of view

Not long ago there was an article about Mercedes EQ (the SUV one, not sure exact name). The guy from Mercedes disclosed that this car was designed so it could be made on the same production line as their ICE models. I understand from this article that BMW is going the same route. I find it very wise as, as this guy from BWM says, it is difficult to assess the demand for EVs out there. Tesla success does not help as much as some could think. I often have the feeling that people do buy the brand Tesla as much as they buy an EV. Besides, the statement in favor of an EV when having a Tesla is clear. Not so much when buying a coming electric Mercedes, BMW or Audi as those brands do also produce ICE, and their ICE models look very similar to those coming EVs (Audi eTron quattro, BMW ix3 etc.). So I would not be surprised for a slow start with sales numbers picking up as fast chargers networks do gradually extend and battery prices go down.

No doubt in my mind, Musk believes too many of his buyers will stay on board with any decision he makes. He surrounds himself with Twitter.

Tesla is building their EVs on the same line as their ICEVs as well … their non-existent ICEVs.

“people buy the brand Tesla as much as they buy an EV”

Yep.

“Tesla CEO Elon Musk has already admitted that too much automation involved in Model 3 production is his fault.The automaker thought that increased robot-based assembly would help make mass-production an easier reality, but it has come back to haunt the CEO and his production team.”

The admission was ‘too much automation *at once* and that Tesla is *temporarily* dialing back on automation. Part of the efforts were successful, some weren’t. They replaced the unsuccessful stuff with human labor to figure things out and try again later. Nothing special about that. Don’t expect Tesla/Musk to stop pushing things forward.

All we have been doing over the entire history of humans is build ever more sophisticated tools to do more work with less effort. Car production can be regarded the pinnacle of that endeavour. And while humans are better at some tasks than robots, robots have been dumb until now. The emergence of robots coupled AI will push human labour into an ever tightening niche. This is unstoppable and BMW seems to not see that.

BMW does see that. You would be astounded at the amount of robotics in BMW plants. Also, leading the way with exoskeleton for workers to reduce strain, prevent injuries, which increase worker satisfaction andproductivity.

The idea of completely automating a factory because “AI” is like the dream of flying cars taking you to work. Airplanes have completely revolutionized transport but they will never shuttle you from your Jetsons house to work. AI is similar. Introducing a certain degree of intelligence in the underlying systems will dramatically improve human efforts, but humans will never be taken completely out of the picture. AI and robotics that enhance human labor will be spectacularly successful, whereas those technologies that assume that some super smart AI Will push human labor into an “ever tightening niche” will crash and burn.

Analogy ≠ Proof. That’s the problem with your Jetsons story.

How are human welders for instance being “enhanced” by robots? There are no human welders on a modern production line. The welder became a niche where humans have eventually been pushed out (talking about car production only here). If you “enhance” one welder, nine others have to look for other work. And the one remaining is in a niche. Until he loses his job too, because more enhancement enabled another welder to do his work plus that of eight others. See what I mean? It starts with “enhancing” and ends in “replacing”.

Your last sentence misses the point. I was not talking about assuming anything, I was just stating what will be the result of ever better and smarter robots. This doesn’t stop somewhere at some natural threshold that no AI can cross. There are only a few domains that I can think of where humans are irreplaceable. But car production is definitely not one of them.

Right. The idea that humans will never be entirely replaced on a mass production line is pretty short-sighted. The direction of automation is only one way: Towards more and more. The only exceptions are where a company tried to automate processes that were beyond the ability of then state-of-the-art robots and production machines.

If you think there won’t ever be touchless auto assembly plants… think again. Not tomorrow, but someday.

Yes, the conveyor-belt parts distribution was overly complex and fragile. From failure comes success.
1. “Failure isn’t fatal, but failure to change might be” – John Wooden
2. “Everything you want is on the other side of fear.” – Jack Canfield
3. “Success is most often achieved by those who don’t know that failure is inevitable.” – Coco Chanel
4. “Only those who dare to fail greatly can ever achieve greatly.” – Robert F. Kennedy

BMW Should “SHUT UP” and build an “EV” car that’s “Worthy” of Being Produced in Mass Quantities for the People ,Instead of Running Their Mouth on Tesla . BMW Should Clean Up Their Own WOES, firstly By Building A “Real EV” at a “Respectable Price” Because their Cars Are “Not PREMIUM” They’re Well Below Average , & NEVER will be Worth Their PREMIUM Prices , All this “Hi Priced Scrap and Half Baked EV’s” They put out will only F00L the Brain washed BMW Freaks That Do Not Know the Integrity of a Car and Think BMW is the best because of their Premium Price .. BTW ……….TESLA WILL BE JUST FINE & WILL BE AROUND TO EAT UP THE COMPETITION FOR SNACKS..

Feel better?

I think he works in the industry. So, the impulse to speak truth to power is that much stronger.

He just sounds like a garden variety crank. Then again, that describes all the “truth to power” types at protest marches these days.

The coming i4 looks interesting.
But, there are few spec’s on the market as of today.

I wonder if Dan feels butt hurt. Lamata, you speak the truth, my friend. I understand and share your frustration with BMW. When I was 16, BMW was by far my favorite brand. My father’s business specialized in servicing and selling BMW vehicles. These days, I let the data, not emotions, determine my favorite brand for most advanced car manufacturer. Today, that is clearly far and above, Tesla. BMW is the “ultimate driving machine (of the past)”. BMW fans like to pat BMW on the back for making a “nice, cute, low range EV for the greenie hipster types in the big city” .. but do we see BMW fans trading in their M3’s and X6M’s and M5’s and 3 series for an i3? Not in the numbers that rival Model 3 or Model S demand. There was a time BMW manufactured some of the best high-tech sports cars in the world. Nowadays, BMW manufactures German hubris and sells it as “EV dominance”. BMW is simply pathetic in their sophomoric, very public rhetoric towards Tesla.

I too Owned / Loved BMW when I was Younger & more easily Influenced & Swayed . I Agree BMW Is living off their Laurels of their Past , “Catch Phrase” Was Much Better than Their Product……

“We can only hope that BMW will move aggressively forward with its plan…”
Sorry, we have allowed too many BMWs Exec to fill in their pockets with fat paychecks promising the moon while cheating behind the curtain for wayyyyy tooo long. I switched to EVs. And it is not Bemers… Don’t own an ICE anymore. Thank you Nissan Renault and Tesla for leading the way… InsideEVs: please no more relating PR from BMW, VW, Daimler… without critical judgement. The first car manufacturer to sell a mass market EV in large numbers within a reasonable time frame will be the true hero. Looking at current sales development, guess who is winning… who cares if BMW can build ICE cars in volume… actually it would be better if they couldn’t… they might then get the idea/urge/desperation to learn how to properly mass market EVs….

Don’t worry about EV sales. Rules and regulations, mixed with many peoples expectations will ensure a growing EV market for years to come.
In the end, most ICE cars will be for special areas of use. Emergency/fire/military and so on.

It IS how ever important that current ICE car manufacturers put pressure on existing EV cars (and manufacturers) to improve quality and value for money.
Volume, consistent quality and better materials used is key for improved EVs. A current medium priced EV offers the interior quality of a super cheap car. When that changes, nothing will stop EV growth. Add future solid state batteries, that hopefully will add more power, safety and make them cheaper.

I think we will see some kind of hybrid batteries used too – where capacitors are used together with normal lithium batteries.

A Battery Breakthrough is getting Closer & Closer on the Horizon & when it comes to Light , it will be the end of ICE , Pollution, and all the Gas Price Gouging & then we can breath easier..This can never Happen fast enough!

If they are so superior why didn’t they beat the Model S to market with a 250 mile EV?

Or a 300 mile all electric CUV?

Or a 300 mile mass market pure EV?

BMW criticizing Tesla just reminds everyone who is actually LEADING and getting these cars actually built and in customer’s driveways.

Sounds like BMW is well managed, and tiptoeing in as is the financially responsible way to approach BEV’s,

They are a dinosaur that got a bad taste in their mouth with the i3 and i8. Now they are playing the conservative card to wait to see if EV numbers start leaping. Meanwhile, they don’t have a competitive product and by the time they get really serious about electrification they will be years behind.

EV’s are like 1% of global sales……..

There is plenty of time for them to make a great product with even better than 2018 battery technology.

You should be supportive of ALL
car makers making and designing future EV’s

Can’t believe the drivel sniping on these boards

TipToe…… Through the Tulips….. With Me ….And BIG AUTO….Because They’re Scared Sh!tLess of Change ! ! ….Ha Ha ha …

Tesla’s whole retail experience to-date has been that their sales growth has been production-constrained, so their sole focus has been on how to accelerate production rates and assume that “if we build it, they will sell”. That works in the boutique high-end EV market that they have essentially owned a monopoly on, but in the mass-market, both production speed AND and flexibility are key. The market is fickle and you never can really forecast well what will be the suddenly-hot seller. Therefore, production MUST be flexible to dynamically-match demands for various products. This means flexible production lines that can interchangeably-produce whatever product is selling. Robots, with great tooling and software, can be fast at one thing repeated over and over but dynamic flexibility is what the human factor adds. Just what BMW et al have figured out. Tesla has bet the farm on the Model 3 production line and by eschewing a universal flexible platform design, appears to assume that the market will continue to support at least 5K/week in Model 3 sales for the life-cycle of that production line. They already have made clear they are not designing the Model Y to be able to be co-assembled on the… Read more »

So HVAC, will you be putting your money where your mouth is and shorting Tesla then?

Or you could play it safe and be like the serial anti-Tesla troll named Dave who just invested 100k into China (BYD).

“Tesla’s whole retail experience to-date has been that their sales growth has been production-constrained, so their sole focus has been on how to accelerate production rates and assume that ‘if we build it, they will sell’.”

That’s ignoring reality pretty firmly. It’s rather obvious that the Model S has reached the limits of demand, or at least the limits of demand Tesla can create without spending significant amounts of money on mass advertising, which apparently Tesla isn’t willing to do.

If Tesla had no experience with production meeting (or exceeding) demand, then they would never have offered the S75 or the X75 as an electronically limited S60 and X60. And they never would have made significant numbers of “inventory” cars to be sold outside their “every car is made to order” business model.

Tesla’s reaction to plateauing of demand for the Model S (and perhaps the Model X, altho that is less clear) was to put the Model 3 into production. And when demand for that starts to plateau, they’ve got the Model Y and eventually the Tesla Pickup waiting in the wings.

BMW will have a disadvantage for years to come with its failure to embrace all electric platforms.

German autoworkers go through extensive vocational programs fully paid by the car companies. If a candidate is admitted to a BMW apprenticeship it is almost guaranteed that he/she will be employed long-term after successful completion of these programs, many as life-long employees. After a few years many workers are sent to engineering programs, so, in fact, many BMW assembly workers have engineering degrees. They have a fierce loyalty to their company, rarely seen in US companies that hire and fire workers on a whim, including Tesla. BMW will do it right and be a fierce competitor on the EV market.

The future of cars is EVs, the only question is the time scale over which the switch from ICEs to EVs will happen. So, if “BMW has a reputation for cranking out high-quality vehicles quickly” why would they allow the upstart competitor, Tesla, to gain a leadership position in the part of the market that will, sooner or later, completely dominate the market? BMW is interested in protecting its reputation for quality. So the only logical conclusion concerning their slow entry into EVs is that they, just like Tesla, can’t make this very new kind of car quickly – not without sacrificing their reputation for quality and/or committing a lot of capital. Tesla, on the other hand, is getting a foothold by pushing to make a truly new kind of car more quickly – with the concommitant sacrifice in initial quality, at least in their first mass market car. But that’s what Tesla has to do to keep raising the capital they need to keep growing. I think its going to work; already the fit and finish of the Model 3 is improving, and their production is finally rising. BMW is going to regret letting Tesla get itself established with… Read more »

The answer to your question about BMW is in your first sentence – BMW thinks the time scale is longer.

I think it shows that Tesla should have stuck to their original timelines before they got 400,000 preorders and tried to rush the product to market. Not properly planning and spending the engineering hours to get it right from the first has caused their production isssues.

BMW May appear to slow walking it, but possibly only because they are making sure to get it right.

Nope. The reasons legacy auto makers, including BMW, have not jumped into the EV revolution with both feet are the same reason that market leaders are always reluctant to embrace new technology during a disruptive tech revolution.

The entire business model is based on selling the old tech. Why would they want to abandon all their investment, both monetary and expertise, in the old tech, so long as it’s still making money for them?

Only when the old tech starts failing to make a profit, will they reluctantly embrace the new. And quite often, when companies wait that long to react to a shift in the market, they can never catch up, and unable to compete in the transformed market, they go out of business.

Now, that’s not to say that BMW will be one of of the legacy auto makers which will go out of business over the next 20 years or so. But there is a very real possibility that will happen. Certainly some of the current leading brands of automobiles won’t be around 20 years from now!

I do think BMW is right to be cautious. Here in the “EV bubble” of EV fans we think the world id out there clamoring for more EVs. In reality, most folks have little awareness of them (much less care). Tesla also has something BMW doesn’t: Two years ago with the Model 3 announcement they (Tesla) moved from being a manufacturer of “cars” to a manufacturer of “cool”. As a long time car enthusiast I have seen the enthusiasm for “cars” in the general public fall steadily over the years. Most “cool” cars I’ve owned were met with a general “shrug” by most non-car enthusiasts. My Tesla, on the other hand, generates ridiculous interest from my “non-car people” friends. Heck, after a funeral a while back we went to the family’s house and we ended up giving test rides! These folks all think “Teslas” are cool…not necessarily EVs. It reminds me of a conversation I had with my stepson years ago as he was about to go off to college. At that time, we were discussing him purchasing a new laptop. As an engineering major, I encouraged him to get a Windows-based laptop and indicated they were a better value,… Read more »

so many ppl that offer Tesla advice and yet, those same ppl have not a single clue.
BMW’s comments are NOT going to help . The reason is that Tesla is going WAY beyond what BMW is going. In fact, in about 3 years, ppl like steven will be extolling how brilliant Musk is and will claim to wonder why OTHERS did not see that Musk is about to bury Toyota.