Majority Of Tesla Model 3’s Built In Last Week Of June Needed Rework

Tesla Model 3

AUG 22 2018 BY WADE MALONE 71

Tesla says most issues were minor, however.

In the last week of June, Tesla was under a lot of self-induced pressure to reach a goal of 5,000 Model 3’s / week. With all hands on deck, the company was able to hit that goal. Although according to internal documents, Tesla had to rework over 4,300 Model 3‘s produced during that week.

The average rework time per vehicle was 37 minutes. This would give a first pass yield (FPY) for the week of 14%. 86% of vehicles coming off the line needed some type of correction or completion. Certainly when reworks are needed at this scale, productivity and labor hours per vehicle will be heavily impacted.

Ron Harbour, founder of manufacturing guide “The Harbour Report” told Business Insider:

A competitive plant will pass 80%-plus vehicles that do not require repair. I would say the average plant is about a 65-80% range.

(…)

It’s a direct impact on their labor productivity if they have to add additional labor hours for repair.

Model 3 sprung structure helped reach production goal

A representative for Tesla would not specifically address the FPY for the period. However, they did stress that a rework most often includes minor or cosmetic issues. The majority of vehicles reaching the end of the production line do not have significant problems.

Since Business Insider was only leaked data for a single week during the end of quarter rush, it is likely that this was a major outlier compared to the typical week. According to Tesla, labor hours per Model 3 produced has decreased ~30% in Q3 compared with Q2.

A Tesla representative stated:

Our goal is to produce a perfect car for every customer. In order to ensure the highest quality, we review every vehicle for even the smallest refinement before it leaves the factory. Dedicated inspection teams track every car throughout every shop in the assembly line, and every vehicle is then subjected to an additional quality-control process towards the end of the line.

Working out Model 3 production kinks.

Business Insider states that the most common reason for rework was a “failed manual task”. This does not necessarily mean a failure of line workers. Delays from one part of the line could be passed along to the next step. Incorrect parts from suppliers or misbehaving robotics could have also factored in. Tesla would not discuss specifics, however.

Musk says he is always looking to improve the manufacturing process. Sometimes Tesla attempts a new solution to an old problem only to fall back on more traditional manufacturing processes. As other automakers have come to realize, the more complex the robotics the more likely they are to fault.

Since Model 3 production began, Tesla has been fine tuning what processes are carried out by robotics and what is done manually. Tesla has hit 5,000 units / week more than once since June and analyst George Galliers believes 8,000 / week is possible “with very little incremental capital expenditure”.

TESLA MODEL 3

33 photos
2. Tesla Model 3
Range: 310 miles; 136/123 mpg-e. Still maintaining a long waiting list as production ramps up slowly, the new compact Tesla Model 3 sedan is a smaller and cheaper, but no less stylish, alternative, to the fledgling automaker’s popular Model S. This estimate is for a Model 3 with the “optional” (at $9,000) long-range battery, which is as of this writing still the only configuration available. The standard battery, which is expected to become available later in 2018, is estimated to run for 220 miles on a charge. Tesla Model 3 charge port (U.S.) Tesla Model 3 front seats Tesla Model 3 at Atascadero, CA Supercharging station (via Mark F!) Tesla Model 3 Tesla Model 3 The Tesla Model 3 is not hiding anymore! Tesla Model 3 (Image Credit: Tom Moloughney/InsideEVs) Tesla Model 3 Inside the Tesla Model 3 Tesla Model 3 rear seats Tesla Model 3 Road Trip arrives in Tallahassee Tesla Model 3 charges in Tallahassee, trunk open.

Source: Business Insider

Categories: Tesla

Tags: , ,

Leave a Reply

71 Comments on "Majority Of Tesla Model 3’s Built In Last Week Of June Needed Rework"

newest oldest most voted
John

Here we go, cue the fireworks!

Chris O

Fire works? This is downright nuclear! Just imagine: 37 minutes of extra work on $50K+ vehicles! If this doesn’t convince people to sell those stocks and make the short’s day I don’t know what will. /S

Viking79

Exactly, already saw an SA article commenting how bad it was. Sure, it is something that needs to be improved, and it actively is being improved. However, it isn’t a huge issue unless it stays that way. An extra 37 minutes isn’t negligible on a car that averages about 30 hours per car (edit, corrected, had miscalculated earlier), but it isn’t going to break the bank. However, it could be more problematic on the Standard model, which is why they aren’t starting that one until these issues are worked out.

Chris O

37 minutes is like $25? Even if these had been base models (that would still have a $40K+ ASP BTW) the effect would have been negligible.

Ricardo

25? 25 what? Just goes to show how much you really understand of the issues being discussed.

David Green

Speaking of fireworks, as was reported on the Tesla friendly fan sight, another Model S went up in flames today, this one in New Jersey.

Brett

Neat, how many other cars caught fire yesterday?

Shaun

Byline for source article says Linette Lopez… BRB, deciding just how many truckloads of salt to take this report with.

Pushmi-Pullyu

I would guess that’s some of the “insider” info that Lopez reportedly bribed Martin Tripp to give her.

But it’s much ado about nothing. See my post below showing that the rework/ repair time is only about 4% of what the average assembly time is for major auto makers. Hardly the the “heavy impact” on productivity and labor that this article claims!

Seven Electrics

With a rework rate that high, it is absolutely the case that many issues will not be found before the car reaches the customer. Mismatched doors, screens that shut off, broken charge poor doors, etc.

Viking79

And since everything Tesla gets a lot of clicks it is sure that every case of these will be all over the Internet with the town crier broadcasting it as loud as possible. The only way to really look at this information is taking statistics and seeing if there are more frequent issues or not. My hunch is issue rate will be higher initially but can’t really say how it compares to other manufacturers without doing this analysis.

Pushmi-Pullyu

“…it is absolutely the case that many issues will not be found before the car reaches the customer. Mismatched doors, screens that shut off, broken charge poor doors, etc.”

Reality check: just one mismatched interior panel on just one door on just one Model 3 prompted an article here at InsideEVs.

With that level of media spotlight glare, that level of attention to all of Tesla cars, I think it’s safe to say that the flood of problems your FÜD suggests is just as far from the truth as most FÜD is.

antrik

Yeah, I was bracing for another full-on hit piece when I saw the name… But I have to say that compared to some of her earlier coverage, this one actually feels somewhat measured. Let’s hope it’s a lasting trend…

Art Vandelay

This is actually good news for me, with so many current inefficiencies in the manufacturing process, I can see that by fixing them Tesla will get to those 25% margins…

F150 Brian

Did George Costanza work for you?

Art Vandelay

Yeah, at the Vandelay Industries, did you work for me too?

dan

Serenity now. Serenity now.

Spoonman.

Tesla obviously has some issues that it needs to fix to become a sustainable company, but all these leaks of very specific information are starting to feel like a somewhat organized campaign.

Spoonman.

Not that I’m criticizing this site for reporting on it, of course. Model 3 production and sales are the most important US EV story right now.

Scott Franco

This story is everywhere. Like… everywhere.

Get Real

Ya think?

Chris O

People click on anything Tesla so if Elon farts it will be on the cover of NYT tomorrow.

fotomoto

I wonder how much of this was due to bringing in additional, non-factory Tesla workers from other divisions?

https://www.bizjournals.com/sanjose/news/2018/07/31/tesla-model-3-production-factory-tsla.html

CDAVIS

Assuming this report is accurate which nobody has confirmed that it is…

This report would help explain why so many Tesla customers taking delivery of Model 3 say that fit-n-finish at delivery was excellent. Good to know Tesla did what was necessary to assure top-notch quality while smoothing out production ramp-up.

Shows that Tesla is highly committed to quality… for existing & prospective Tesla customers that’s good news.

For some others it’s an opportunity to spin Tesla as a struggling company to support whatever anti-Tesla agenda they have… hello Jim Chanos anti-Tesla wolfpack.

In the mean time…

Tesla today is selling more EVs in North America and Western Europe (and soon also *Australia) than any other car maker by a wide margin… there is good reason for that…results are what count most.

*”Massive Lines Form For Tesla Model 3 Debut In Australia”:
https://insideevs.com/massive-lines-form-tesla-model-3-australia/

ffbj

It’s true that they probably could sell many times the number of Model 3’s they are currently producing.
They are getting better at making them. I figure they have about 3-5 years of demand just to complete orders for the Model 3. It looks as if the battle is over it’s just now a question of how quickly Tesla will progress.

theflew

They might be delivering cars that have good fit and finish, but all the rework kills profit margins. You’re paying people to fix something that has already went down the line. If we do some simple math and say they produced 15k cars in June with 86% needing 37 minutes of rework that’s almost 8k hours worth of rework.

Assuming you want to get these cars “out of the door” as soon as possible it will take a pretty large team to turn these cars around in a short time span. The net is whatever profit there was gets eaten by an un-necessary reason. I would rather them produce 2000 vehicles a week that require little rework than make some target that only looks good on paper.

CDAVIS

@theflew said: “…I would rather them produce 2000 vehicles a week that require little rework than make some target that only looks good on paper…”
————

Increase production… measure… improve process… Increase production … measure… improve process…

It’s an iterative process that requires stretching production to the next level to discover where improvements in process are required. Yes it can be debated how aggressive Tesla should be at each production uptick and they have clearly taken the aggressive big-pain-big-gain track (aka Production Hell). I think it will ultimately prove to be the correct track for Tesla at this stage of their growth.

Some car makers have elected to take it slow and steady on EV production ramp-up… and perhaps that’s the correct answer for them.

Tesla’s hyper aggressiveness in increasing production capacity has allowed Tesla to today reach selling more EVs in North America and Western Europe (and soon also *Australia) than any other car maker by a wide margin.

antrik

37 minutes extra per car doesn’t sound like a big profit killer. Sure, it’s something to work on — but not really a big deal in the grand scheme of things.

Pushmi-Pullyu

“The average rework time per vehicle was 37 minutes. This would give a first pass yield (FPY) for the week of 14%. 86% of vehicles coming off the line needed some type of correction or completion.”

So, one unit in 7 needed some reworking/repair, and the average rework/repair time was only 37 minutes.

Given the extremes to which Tesla went to maximize production and deliveries in June of this year — even pulling employees from SpaceX to help! — that’s actually a lower rework rate than I would have expected.

Still, I will be glad when Tesla gets to the point that it no longer has to do this sort of binging-and-purging; “binging” in production at the end of every quarter, and “purging” to recover at the start of the next. I was surprised when Elon mentioned the elimination of that as one of the motives for taking Tesla private; other auto makers don’t follow that pattern, and apparently don’t have any need to.

Go Tesla!

6 units out of 7.

Pushmi-Pullyu

Oops! 😳 Yeah, I didn’t spot my mistake until I re-read my own post.

But still, an average of only 37 minutes of rework/ repair time is rather far from the major impact claimed by this article.

John Hollenberg

Unfortunately, the article states the exact opposite–6 out of 7 needed repair/reworking. Love my model S!

tftf

“So, one unit in 7 needed some reworking/repair”

Tesla math?

Read the article again. 6 out of 7 needed repair / afterwork.

antrik

Where did the notion originate that Tesla pulled employees from SpaceX? I’ve it brought up repeatedly, but I have yet to see any source for it. (And frankly, it doesn’t sound very likely to me.)

Are people just confusing this with the fact that some people were pulled from Model S/X production lines? SpaceX, Model X… It’s all the same, right? 😛

Pushmi-Pullyu

Hmm, my Google-fu fails to find any citation for that. Maybe it’s just one of those rumors that has been repeated so often that we (or at least I) think it’s true? 🙁 Sadly, it’s often hard to separate truth from “fake news” on the internet.

Scott Franco

If this story had simply been “Telsa M3’s require 37 minutes of manual finishing work per car”, it would look totally different. You don’t fix drivetrain issues in 37 minutes. What matters is they keep on top of quality control. I can only vouch for one car, the one in my driveway, and its awesome.

F150 Brian

Exactly! Maybe just too many “brown” inner door panels 😉

Pushmi-Pullyu

“The average rework time per vehicle was 37 minutes… Certainly when reworks are needed at this scale, productivity and labor hours per vehicle will be heavily impacted.”

Well, let’s do a bit of math here. According to the article linked below, it takes between 13.6 and 17.6 man-hours just to assemble, and if you include the other labor involved, including stamping and (for gasmobiles) engine and transmission manufacture, it’s about 33-35 man-hours.

37 minutes is 0.62 hours. Ratioed to the apparent average assembly time of 15.6 hours, that’s only an additional 4%. Plus, keep in mind that this isn’t a difference of 4%, since some rework/ repair will need to be performed during less intense periods of production. In fact, there’s no indication in this article of just how much of an increase that 37 minutes per vehicle is, as compared to the overall average.

It appears to me that it’s quite an overstatement to claim this would “heavily impact” productivity or labor per vehicle!

https://www.motortrend.com/news/toyota-chrysler-have-north-americas-most-efficient-plants-1859/

Pushmi-Pullyu

8 downvotes for my serious analysis of this claim; an analysis for which I spent time to research and do math?

Would anyone who downvoted my comment care to explain just why?

Bill Howland

Pushi I didn’t down vote you here or above, but your analysis is flawed. But I’m glad you got down voted for your flawed thinking, and you’re getting some of your own negative votes back. I explained further down the reason why it is defective.

Scott Franco

An aside: I do an unofficial count of Tesla model 3s I see on my commute to Palo Alto each day, about 30 minutes. When I got my car, my count was 5 max each way. Yesterday was 15(!) on the way home. This car is very popular here.

David Green

Seattle is flooded with Model. 3’s. I see them more then S and X now, which is a lot.

CDAVIS

Soon commonplace…

Assaf

Hey, I have a way to help…

How about starting to make a version with no added packages, and with the base 220-mile battery – leaving more room for stuff to fit in?
Might be easier, quicker and cheaper to make than all this dual-performance-fly-me-to-Mars stuff, that is apparently more important than satisfying >200k people waiting for the above.

Just sayin’

ffbj
What’s phenomenal to me is the amount of press Tesla gets. It’s just mind boggling that a single company has held enthralled large sections of the financial media for so long. On any given day they will usually get mentioned or spotlighted for this or that, usually something wrong, or something Musk said, did, or tweeted. What is the purport of this? It keeps Tesla front and center and in the news constantly, which I think is better for Tesla than not, even though the articles are 4-1 against, because it keeps the story going, and it is the story of this new century, Musk and his companies. Now it may be that Musk has just had enough and his intent really is to go private, all indications are that he’s not kidding around, and he usually gets his way. Morgan Stanley just suspended coverage of Tesla, analytically, as has Goldman Sacks. This indicated preparation for moving the deal to take Tesla private, which will be facilitated by GS, probably in 6-10 months, it will be completed. In conclusion a lot more hit pieces from the likes of BI, The Street, CNBC, etc… Cause they get clicks. Some Headlines: Tesla… Read more »

+1

Pushmi-Pullyu

It keeps Tesla front and center and in the news constantly, which I think is better for Tesla than not, even though the articles are 4-1 against…”

Oh, I don’t think it’s that bad. Even on Seeking Alpha, the “ur source” of anti-Tesla FUD, the blog posts-cum-articles are only about 5-to-1 against. Most sources are much more favorable. Bloomberg and Forbes have about as many positive articles about Tesla as negative ones. CNBC has a shocking level of negativity, but even they occasionally run positive articles. Heck, even Linda Lopez’s rag, Business Insider, surprises me occasionally by running a pro-Tesla article.

Most of the highest profile coverage, on network infotainment (“news”) shows, is positive. Coverage on CNN, PBS News Hour, BBC America news, and NBC Nightly News, is usually positive regarding Tesla. The last one there puzzles me, since CNBS seems to go out of its way to be negative most of the time, and often reporting what I’d call outright FUD. I can’t figure out why CNBC is so very biased against Tesla when its parent organization, NBC, shows no such bias.

antrik

Don’t forget that the major networks report on every Tesla accident as if the world is going to end…

CDAVIS

@“ffbj said: “…In conclusion a lot more hit pieces from the likes of BI, The Street, CNBC, etc… Cause they get clicks…”
———-

There is also the dynamic that many trading algos crawl news feed headlines (sotimes also body content) and score the keywords in those headlines as a datapoint of the buy/sell vars.

Hence today ther is a big game played in “headline seeding”… that’s getting deep in the weeds but certainly increasingly becoming a part of the stock manipulation ecosystem.

CDAVIS

… continued

Many traditional news & non-tradional news blog article publishers are not fully aware of this trading algo dynamic… they don’t realize they are often being played by re-posting carefully seeded articles pro/con a certain target stock. They don’t know they are contributing to keywords “velocity propagation score” var that may automatically trigger a programmed buy/sell.

antrik

I think a more differentiated look is necessary here.

When it comes to the general public, I’m sure “there is no such thing as bad publicity” totally applies: people will soon forget the stories of burning cars and financial trouble, but will remember that Tesla is relevant enough to get major news coverage.

In terms of actually conducting business though, the FUD can be quite harmful. If suppliers truly started doubting that Tesla will pay their bills for example, that would be a big problem… I think that’s why Elon said that the smear campaign could actually destroy Tesla. (And why most shorters aren’t losing hope yet…)

Kurone

Tesla should just go private and put an end to all these insanity. The sooner the better to Tesla. Too many people are strongly vested in the demise of Tesla. Tesla should please go private immediately.

Chris O

37 minutes of extra work on $50K+ vehicles? Oh no, this is the end of Tesla….Short now!

SJC

Push more out the door faster, quality problems occur.

David Green

Wow, a fist pass rate so low is terrible, the average GM plant is at 75% and the Flint truck plant higher yet, this might explain so many cars at Lanthrop, waiting for some more major repairs.

Bill Howland

Yeah this has got to be egg on Elon “Let me run Detroit” Musk. Pushi’s 4% analysis won’t hold water if ongoing problems with the cars have to be handled at the service centers – such as the related article of the car dying, since, while the car is still under warranty, Tesla must foot the bill for repair.

One way or another, a drastic change is coming – If Tesla can improve its 86% rework rate down to 50% or so, that would certainly be a ‘Drastic Improvement’. But the current state of affairs – being more than THREE times worse than conventional car makers, who also make highly reliable EV products, simply can’t continue for long.

David Green

Interestingly shorts reported this news a month ago, and the regulars here like the one you named blew it off as FUD… I have to say, if you filter for their obvious bias, the shorts are far more accurate in figuring out what is going on then the media in general. I follow a few of them on twitter, and there is certainly some nonsense FUD, but sifting through that, there is some good info, and pictures/video do not lie.

Chris O

If 6 out of 7 averages 37 minutes, there can’t be many cars needing major repairs. An average of $25 per car spend is not much of a story BTW, even if this were a structural thing rather than Tesla ramping up as quickly as it can, accepting some extra aftercare in the process.

BTW remember how GM recalled 800K cars for a faulty ignition switch,after a 100+ body count? 4.3 million for faulty airbags? They let 75% pass you say? All car makers recall cars by the millions, nobody gets it right right off the bat and carmakers like GM will calculate the cost of lawsuits vs the cost of recalls even if it means people will die.

Bill Howland

GM had no problems with the ignition switch if only GM supplied keys were used. Any other executive of any other car company (think, the late Sergio Marchione of Fiat Chrysler) would have said as I’ve repeatedly said, “Any foreign keys – or keys not supplied by the corporation, or any keys not related to proper operation of the car VOIDS any warranties with the car”. After all, even Tesla voids the warranty on the Model 3 for “Driving on – including, but not limited to Broken Pavement or Uneven pavement”. The ’emergency recall’ was just a plastic ball that prevented heavy, high torque key rings from shutting the car off when driving over a huge bump.

Since I often drive on such roads, such a statement in the warranty would give me pause, but I certainly could not BLAME Tesla since they say it in the warranty.

Nix

This is incorrect. The switches failed initial QA testing and were faulty and installed anyways. They did not meet the specs for how much force should have been required to turn the key.

GM plead guilty to being at fault for deaths and permanent injury for failing to report that they knew the the parts were faulty and didn’t meet specs, including among other things blaming the keys and blaming drivers for key rings instead of recalling the faulty switches.

They admitted criminal culpability for falsely blaming the same heavy keyrings that caused no problems for every other make of car and even other GM cars that did not have the defective ignition switch design. When instead of casting blame, they were legally mandated (and failed) to report that they knew the ignition switches failed to meet design specifications and needed to be recalled.

Many people died because GM broke the law and blamed key rings when they were instead legally obligated to recall the faulty ignition switches and did not.

Bill Howland
More false news from the SuperDope. Mary Barra said the ’emergency recall’ being mailed will make the vehicle “totally safe”. The ‘recall’ was a plastic ball that prevented anyone from putting too many keys on the key ring. If the car is totally safe one minute then it was always totally safe. For the tenth time, they admitted culpability when there was really nothing to be culpable about – since any OTHER CEO would say we CANNOT control what keys the customer puts on their key ring, and anything more than 2 keys, or keys having nothing to do with proper operation of the car, will void the warranty and the customer ‘of course’ must hold GM HARMLESS. I could care less that some engineer reacted poorly when being put under pressure after the fact. Of course, “Ambulance chasing lawyers” are not going to let them get away with that so easily. It doesn’t matter that the key rings work on other brand cars. What matters is GM should only authorize keys and key rings THEY SUPPLY, and any thing remotely different will void the warranty. Another example: The model 3 warranty is void if you drive “on, including, but… Read more »
Some Guy

37 minutes rework for cars made in one particular week. Oh no!
Meanwhile, in Europe, VW has issued a recall for 700000 ICE SUVs (gasoline and diesel alike) because these particular examples of VW ICE SUV engineering quality can actually catch fire when being exposed to light rain (this is not a joke, altough there is a quote from an old Simpsons episode referring to such a strange situation, albeit in a plane). Even while parked in the rain, there is a risk of going up in flames for these ICE SUVs. (The roofs are leaking and water gets into a control unit for interior lighting, which then starts smoldering over time and eventually will cause a fire).
Headline of major German news magazine “Der Spiegel”? Nothing on this recall, just a Copy & Paste hit piece citing and translating the NYT article about Elon’s health.

John Doe
I don’t understand the rush. I know they have a ton of customers waiting, but I would prefer to wait just a bit longer, to be sure quality is good. Goodwill is important. They have a reputation to build. Many of the Tesla stock owners are very solid, and would probably add funds it they have to. If Tesla adds another factory in China, with identical capacity – they’re producing enough cars. Some will wait for Model Y, some buy S, X, and when the Model 3 waiting line is no more, there will be a limit on how many they will sell. I have owned a Chinese scooter (moped) once, to get too and from a university. That was a study of poor quality in every step, but the design (look). After that I only buy motorcycle/moped brands I know, when it comes to vehicles. After that experience I hardly ever buy any product without seeing a quality testing of some kind. With some brands, you know for sure it will be OK, but for others. . . I owned motorcycles from Honda, Yamaha, Suzuki, Husaberg and BMW, and they have all worked perfectly. The Husaberg needed a lot… Read more »
antrik

Most customers seem to be happy with the current quality. Sure, by taking things slower, they could probably get even more happy customers — but is that really worth billions in losses due to underutilised production lines?

MDEV

This is becoming Troll landya

Mark.ca

The coverage Tesla gets reaches comical levels. And people wonder why they don’t advertise…
I wonder if by going private they will get this much press.
This has to be frustrating for the other manufacturers. Toyota with their unintended acceleration and GM ignition switch had to kill people and still didn’t get this much attention years on end.

Pushmi-Pullyu

“I wonder if by going private they will get this much press.”

Unless Tesla takes some pretty strong steps to prevent it, taking Tesla private should reduce media coverage quite a bit. Just consider how many articles are provided to news outlets by financial firms which want Tesla’s stock price to either rise or fall. Probably the average person doesn’t realize how many “news” articles — even in mainstream, respected newspapers — are soft sell ads written by advertisers. Newspapers sometimes run them because they can fill up their column inches without having to pay reporters to write stories.

Of course it’s not quite the same with online news sources; they don’t have “column inches” to fill, but they do have to constantly provide content to get people to visit their site.

Nearly all of the Tesla-related “news” generated by financial firms and stock analysts is going to disappear overnight if Tesla is taken private.

Nix

“they don’t have “column inches” to fill, but they do have to constantly provide content”

It is the same for Google AdSense. A certain amount of articles needs to be deemed “original content”. So many “news” websites out there will publish anything they can get their hands on that they can call original. Even if it is utter nonsense.

” Make sure your site adds value. Publishers are not allowed to create multiple pages, sub-domains, or domains with substantially duplicate content.
Publishers must provide unique and relevant content that gives users a reason to visit their site first.
Avoid “doorway” pages created just for search engines, or other “cookie cutter” approaches such as affiliate programs with little or no original content.

…Sites that don’t meet these guidelines may be removed from the search index and have AdSense ads disabled.”

https://support.google.com/adsense/answer/1348737?hl=en