OP-ED: Would Tesla ‘Tent’ Sprung Structure Be Ideal For Temporary Foreign Assembly?

JUL 15 2018 BY WADE MALONE 51

With Tesla Model 3 expanding worldwide availability next year, would temporary production facilities be a good move?

For years, China was a relatively minor market for Tesla. But this changed in a big way when Tesla sold approximately 17,000 Model X and Model S in 2017. This placed China behind the United States and Europe as the 3rd largest market for the American automaker. With the Chinese push towards cheaper, longer range electric vehicles, the Model 3 and future Model Y are expected to perform even better. Unfortunately, with the newly announced Gigafactory 3 at least two years away, Tesla will continue to be at a disadvantage. The 25% auto import tariff currently still applies. In addition, no Tesla currently qualifies for generous subsidies in the country.

These financial factors have less of an impact on demand for the already high priced Model X and S. But for the more affordable Model 3, this could be an issue. In order to avoid being subjected to this tariff, the vehicle would need to be assembled in China. In order to be allowed the privilege to assemble your vehicle for sale in China, automakers are required to enter into joint ownership partnerships with Chinese automakers. For years, Tesla resisted this idea. However, their position might have changed based on a recent statement by a Shanghai official.

While the Gigafactory 3 process gets rolling, it might be wise to baby step into Chinese production. One way to do this would be to purchase and re-purpose an existing factory. Or another potentially cheaper way might be to construct a series of Sprung structures (or other temporary facility) similar to the one recently set up in Fremont. Initial upfront cost of such a structure would be smaller than the “largest ever foreign-invested manufacturing project in Shanghai” the Gigafactory project would be according to Bloomberg.

Tesla could potentially begin Chinese production in months instead of years. This early launch would allow them to begin training workers and gradually ramp up vehicle production. By beginning local production, forming a partnership with a Chinese automaker, planning large financial investments, and developing stronger relationships with law makers, Tesla could potentially gain access to Electric Vehicle incentives and avoid the 25% import tariff.

Tesla Supercharger in Shanghai

Government subsidies, tariffs and protectionist policies complicate Tesla exports.

One additional benefit is the versatility this could provide them. China is not afraid to walk back promises it has made. Tensions between the Trump administration and China has led to multiple tit-for-tat economic threats. The Chinese government initially announced they would be rolling back the controversial policy of requiring foreign car makers to enter into partnerships with local automakers. It at first said that electric car makers might overcome the partnership requirement within a year. In addition, China stated that they would be reducing tariffs on foreign made vehicles from 25% to 15%. That idea lasted all of a few weeks.

Based on statements by Shanghai officials, it sounds like Tesla has also agreed to a partnership of some kind. And after Tesla initially dropped prices due to lowered tariffs, the American automaker had to promptly raise them as China ratcheted up tariffs on imports yet again. Easing their way into China with a temporary facility of some kind may be the safe bet. If Tesla finds itself in an “I am altering the deal. Pray I don’t alter it any further” situation with China, the quicker it can walk away the better.

China certainly isn’t the only country or union that provides benefits for EVs produced within their borders. EV incentives and tax benefits are often tied to local production or trade agreements. This same production approach could also be taken when launching the 3 in other markets for final assembly. If the political and economic situation changes (for better or worse), the ‘factory’ can be packed up and moved to where it is needed next. Obviously the issue can become complex since laws across nations are so different. Obtaining building permits for this type of structure might be easier in some regions than others. And for more politically consistent parts of the world it may make more financial sense to immediately construct a permanent factory for final assembly as Tesla has done in Europe.

What do you think? Does this sound feasible to you and does it sound like something Tesla might consider?

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51 Comments on "OP-ED: Would Tesla ‘Tent’ Sprung Structure Be Ideal For Temporary Foreign Assembly?"

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I don’t know if that would really be a solution.

Building a factory doesn’t really take long. BMW’s Spartanburg plant took 2 years from announcing to build one, until it was finished. And a big part of it is grid and water connections, leveling the ground, getting all the permits etc. And that’s the same for a tent.

The big downside of a tent is, that it won’t be every good in adverse weather conditions, which isn’t ideal for something filled with hundreds of millions of dollars worth of tooling. And Shanghai has the monsoon and Typhoons (Hurricanes, but in the northwestern pacific ocean, instead of the Atlantic, or northeastern Pacific).

So a tent might save a couple of months and dollars in the short term, but long term they will need a factory anyways and it could go horribly wrong.

“So a tent might save a couple of months and dollars in the short term, but long term they will need a factory anyways…”

Exactly. Putting a partial auto assembly line inside a non-climate-controlled, non-insulated tent may have been a good thing for Tesla to do as a short-term stopgap measure, but it’s certainly not a permanent solution. Anyone who claims otherwise is ignoring reality pretty firmly.

If putting factories under a stretched fabric structure (whether or not you call that a “tent”) was practical, then we’d already see widespread use of that. We don’t, because it’s not practical!

“If putting factories under a stretched fabric structure (whether or not you call that a “tent”) was practical, then we’d already see widespread use of that. We don’t, because it’s not practical!” I totally agree, but still wonder why nobody has called you, or me, out for not being able to think out of the box. Since that’s the usual response if Tesla does something that no one does and someone points out that it might not be a good idea. I remember when I said I don’t think the Model 3 will reach a much higher level of automation, than other car factories and especially not a lights out factory, since that’s what every car maker wants to do, but they apparently can’t. About a year later and Elon’s version of the alien dreadnought has changed to a pretty familiar picture: “Let me just give you a tour of the whole giant machine. It will blow your brain right out of your skull, OK? It is so crazy. There are parts of it that are completely automated, no person there at all. And then there are parts of it which are completely manual, no machines there at all. Then… Read more »

AFAIK Tesla *did* succeed with raising the automation level above the status quo in several parts of the factory. The approach they took was problematic, but it wasn’t all for naught.

Sprung structures can be insulated to R-33 with climate control, and they’re used worldwide including by the military.

Yep, certainly as temporary only! Not proposing this as a permanent solution at all. It would go up while the factory is under construction. Just depends on what is cheaper, re-purposing an existing building temporarily or putting up a temporary structure of some kind.

You bring up an excellent point I had not considered though – differences in weather. I’m not familiar with the weather in Shanghai at all. Now that you mention it, I imagine it isn’t as mild as California. 😉

Like I said, factories don’t take really long to build. Especially if you just look at the building, w/o all the other work like leveling the ground and getting water and electricity and of course installing the tooling.

Since all of that needs to be done with a tent, too. I doubt you’d have more than a couple months where you would use the tent. And after that you need to move all the tooling from the tent into the factory again. Which means disassembling robots stamps etc and then rebuilding them.

That’s not really cost efficient.

I’m not advocating the tent idea, but there still seems to be a lack of understanding of the robustness of the structures. I live in the Midwest and our worship center for 2000 was built with a sprung structure over 20 years ago to save on cost. There are footwalls around perimeter of building to control water ingress. There is full hvac, the interior can be finished out with drywall and we have been in there during windstorms. My understanding is the military has used the in artic regions.

Thanks Matt, I knew these were built to last a while but 20 years? Impressive!

Yes, Denver International Airport was also built with a “tent” (actually a sprung structure). It was built 25 years ago, and has survived massive hail storms and winds. It is only half way through it’s 50 year projected lifespan.

http://cozine.com/2014-september/dia-story-behind-tents/

This anti-sprung structure fetishism is getting silly. You can seal a sprung structure from the elements the same as any structure skinned in steel or aluminum or glass. You can heat and cool a sprung structure too.

http://cozine.com/wp/wp-content/uploads/dialongs-peak2-600×264.jpg

Tesla’s Fremont assembly tent has no HVAC, and was installed with no fire suppression system (sprinklers and the like). Just looking at the photo above, I very seriously doubt there is any seal between the tent wall and the pavement, so dust and wind-blown debris is going to seep in constantly. While that may be okay for certain parts of an assembly line, you certainly wouldn’t want to — for example — put a paint room inside there! (They may be able to use an air filtration system to keep the paint room itself dust-free, but the chassis needs to be completely free of dust before entering the paint room.)

There is a big difference, Nix, between a temporary tent and a permanent, sealed, waterproofed structure which has a “sprung structure” for its roof.

BMW learned some hard lessons about managing a production line outside of it’s home country and paid dearly. Now, BMW designs the production lines, processes, and support systems in Germany and has gone so far as to mirror production lines in Germany that will be replicated in other regions of the globe.

The 1st generation X5 taught them how to do this without damaging their quality of manufacture. Mercedes had similar challenges with the 1st generation M-Class in Alabama.

Let’s not even factor in the cultural differences in China.

Sure, but that has nothing to do with it being a tent or not. Unless you think the Chinese prefer to work in tents? I guess they don’t, but maybe you have some more information?

Tesla bought the company that built production lines for those German companies. Is your point that Tesla already has the internal expertise inhouse to build production lines, that has already been used very successfully by Mercedes and BMW?

Grohman mostly made factory tooling, and parts assembly stations, if you want to talk about building body in white lines, welding stations, etc… Comau is one of the big boys, they built most of what Tesla has, as well as GM, Ford, Toyota, and others… BTW Comau is owned by Fiat…

You are wrongly conflating what Grohmann and Comau (and others) did for Tesla, and what Grohmann did for other companies like BMW and MB, etc.

Grohmann has patents on BiW welding robotics, use of adhesives for BiW bonding of dissimilar metals, hydroforming, etc.

I realize you want to recycle the bogus arguments you used back during the fake BiW welding sparks Concern trolling incident, but your arguments were just as wrong then as they are now. Besides, that issue was easily put to bed as a one-man anti-Tesla crank from Alex Jones’ InfoWars who had never actually inspected a single Tesla weld.
(cont)

“Somehow “The Agile Group Inc” has been made into some industry expert organization that somehow is the authority in robotic welding.

In reality, it is a 1 person company who employs only Mr. Tracy and does around $130,000 in business a year. It does business out of a PO BOX, with the physical address mapping to an apartment complex.

http://www.buzzfile.com/business/The-Agile-Group-Inc-517-548-1672

This is a guy working out of his apartment, who has suddenly become the hero of zerohedge and seeking alpha and other similar sites. Notably, NONE of the sites reporting this have gotten a second confirmation from any other source.

So let’s dig a little deeper into this individual to see if they have shown anti-Tesla bias in the past. The first item I found was on a far right conspiracy site run by Alex Jones where this same individual is going after Tesla.

https://www.infowars.com/heres-the-real-reason-tesla-makes-no-money/

The Sprung Structure can be designed for 155 mph “hurricane” winds.
Sprung Structures meet the strict Miami-Dade County Hurricane Compliance Code.
The only building left standing in Buras, Louisiana after Hurricane Katrina in 2005 was a Sprung Structure.

“The big downside of a tent is, that it won’t be every good in adverse weather conditions”

That would be incorrect. These are Sprung structures, which are strong storm and hurricane rated and have survived Katrina and other monster storms. Not exactly grandpa’s “tents.”

Yes, if you have the machine and software and labor then yes, you could build around the tent

If time is of the essence, leasing a pre-existing building would be better in all ways. There are plenty of those available in China.

Or do what Apple does: delegate the manufacturing to Chinese vendors that actually know how to do it. Tesla is a ship of fools when it comes to producing things quicky, cheaply and reliably.

Not just about being ‘time of the essence’. I’d say my thought process is get an early start if Tesla could negotiate access to incentives and avoid tariffs on the Model 3. Not immediately investing too much, considering the current trade war and the history of doing business in China. Show eagerness but also hold that huge investment as a bargaining chip.

Slow-burn the long term investments to make sure China does not drastically alter the conditions under which Tesla is entering the market full force. China typically looks out for its own companies first and foremost. Give Tesla time to spread its influence with Chinese officials.

You should share your observations directly to Elon. As an owner of a Tesla, I’m sure he’d appreciate your perspective on how to streamline his company (that you support by driving his vehicle)- that way they could become even more successful and finally win folks like you over. Sounds like you have it all figured out.

I will say that I find it odd that the simple solutions to Tesla’s problems are so obviously evident, yet they simply choose to pick the path of failure instead.

Elon is a weird guy, that much is certain. I think most of Telsa’s problems derive directly from him, his nano-management, and, relatedly, the impossible goals he sets and never meets. PayPal was right to fire him as CEO.

The op-ed is effectively also giving unsolicited advice, as you are to me. Welcome to the Internet!

From Elon’s Bloomberg interview on why the Model 3 ramp was so problematic:
“Because we were huge idiots and didn’t know what we were doing. That’s why.” At least Elon has some ability to introspect…

Ability to introspect, unlike many others.. He admits his failures (the Model X doors, Model S handles, Model 3 timelines, etc), which is unlike most other CEO’s of large corporations.

Regarding the unsolicited advice, I’m ALL about it. I’m also a huge fan of having my position(s) challenged, and vice-versa. You’ve seen me speak about courteous discourse many times at these comments sections, what I’m not a fan of are folks who allege to drive and use Tesla products (as a red herring) all the while bashing the very company that they claim ownership to. I’d be more than game to talk with those folks about the hypocrisy in that position, but I think we both know that those folks don’t intend to speak on such matters.

Enjoy the unsolicited “advice” that you share, although I’m not really sure I’d classify what you speak about as advice.

Since you read that article, you also know *why* they chose not to listen to those saying it was a stupid idea, and why that attitude is essential to the existence of Tesla and SpaceX.

Man, Elon is on fire this week:

“Elon Musk calls British diver who helped rescue Thai schoolboys ‘pedo guy’ in Twitter outburst.”

I think Tesla needs to be very very careful.

BMW, Mercedes and others have been in the Chinese market through partnerships and are familiar with doing manufacture in China. Every car company on the globe with an exception of a few are going to China to ‘corner the market’.

If Tesla is 100% serious about being a player in China, go all in
1) Elon – buy a condo in China and get a long-term visa
2) Secure all the capital needed
3) Avoid over-promising
4) Go slower and get the roadmap right

If done on the cheap, this could become a mess and sleeping on the factory floor in China is a 14 hour flight from CA.

It could be like in the old days when the circus came to town, and put up the Big Top. Everyone in town would turn out
But, these days the circus is dead, mostly.
https://www.youtube.com/watch?v=Jr9JVhr4R5Q

Yes! Don’t build permanent fixtures in China because Chinese Communist robbers will take it away without paying a cent for it! This has happened thousands of times before there! They’ll make a new law retroactive so Tesla will owe the workers all kinds of benefits that were not in the original labor agreement. The manufacturer will suddenly find out they owe more than these benefits thus the Chinese Communist Party will force the manufacturer to abandon the plant and flee! In addition any profits made there won’t be allowed to covert to US dollars to take it with you. This whole scheme was fabricated by CCP to allure FDI with cheap labor and giant market as a bait to trap capitalists! Chinese ideology is still Communist, that is to allure, trap, then kill!

Is that why VW has been making cars in China since 1984?
Or why the VW brand outsells the number two brand in China 2 to 1…
The Chinese are CAPITALISTS now who still have an authoritarian state gov…
The Chinese don’t need to steel your money as they WILL outwork you and outsmart you…
The Chinese were whacked at the knees so to speak for a long time (but that is over) due to Chairman Mao and his little red book with its catastrophic political correctness and equality that his version of communism brought…
The US government SOLD OUT their own citizens with the one sided free trade agreement that Bill Clinton signed back in the 90s…
The Chinese government does what is best for their state and their citizens unlike the US government who steals our money and wastes/gives it away…

Sounds like donald trump is running your version of china.

So many Chinese spies on this website voting down but no reply! Yeah I know you CCP internet trolls logging in and out using different IP. I know all you Shanghainese tricks! If Musk were ever smart he won’t be penny wise pound foolish to setup factory there to have Tesla obliterated by Chinese Communist thieves!

I’m genuinely unable to tell whether this is intentional or accidental humour…

Depends of the weather

Are sprung structures and prefab structures synonymous?

No, prefabrication refers to manufacturing offsite and delivered to the final destination in-part or total. Most modern building use prefabrication for truss systems, curtain walls, and floor sections to speed up construction and lower costs.

I personally think Tesla should avoid China if they require a partnership with a Chinese company. If the tariffs are too high and few people buy Teslas in China, so be it. Just sell in Europe and North America. Just because all the other car companies of the world are tripping over themselves to aid China in putting them out of business eventually, doesn’t mean Tesla has to. How much money does.

Oh and when it comes to trade policy with China, I think it’s high time we start to exactly mirror their trade policy here. If they have 15% tariff, then so should we. If they require Chinese partnership to manufacturer there, we should require American partnership for Chinese companies to manufacture here. Why Americans are so eager give them a pass and help China take over the world is beyond me.

Yes Trump is right in fighting for fair trade with China (EU not so much) but it is tough as the Free Trade Agreement that Bill Clinton signed and Congress ratified was one sided…

The EU has far more barriers to entry than China does. In fact, the very formation of the EU was based on a perverse mercantilist charter of which industries are to be protected – who gets to fish and who gets to make cheese. China is just more honest about their barriers.

Why not go all the way and start selling battery operated tents with wheels and call those Teslas? To quote Ben Stiller in Tropic Thunder, it would be “full retard”

Do you know what is “full retard”? Earthlings driving gas guzzlers CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS thanks co2.earth

Well, China can build skyscrapers overnight … so they don’t need tents … then again, their buildings have a tendency to collapse, so maybe a temporary tent would be more durable.

This article is full of questionable claims that I’d like to see some sources for.

First of all, as far as I can tell, “$10 million investment Shanghai officials expect” seems to be a myth originated in https://insideevs.com/will-tesla-share-technology-with-china/ from a gross misreading of the source article, as I pointed out in the comments there. Or is there some other source for that I’m not aware of?

First time I hear that China is supposedly walking back on allowing EV production without a Chinese joint-venture. In fact, the recent announcement of BMW taking majority share in their Chinese joint-venture seems to suggest otherwise…

Last but not least, I have doubts about the allegation that the Chinese government is walking back on promises to foreign investors all the time. If that was indeed the case, I don’t see how any serious company would ever invest there…

It’s an OP-ED piece and labeled as such.

Regarding ownership: “For manufacturers of electric cars, as well as for companies that make jetliners, helicopters and drones, Beijing plans to move even faster, eliminating foreign ownership limits this year.” https://www.nytimes.com/2018/04/17/business/china-auto-electric-cars-joint-venture.html According to a quote by Bloomberg: “For technology transfer, it is a matter subject to negotiation between the enterprises,” Huang Ou, deputy head of the Shanghai government’s economy and information technology commission, said Wednesday at a briefing in the city. https://www.bloomberg.com/news/articles/2018-07-11/tesla-sharing-technology-with-china-is-subject-to-negotiation If China drops partnerships for EV makers as soon as this year as they have said, there is no good reason for a technology transfer “negotiation” since Tesla would like it up and running within 2-3 years. If Tesla is still required to transfer technology without a partnership, that is hardly ideal. Elon Musk hasn’t exactly been kind in his opinions of doing business in China: “I am against import duties in general, but the current rules make things very difficult. It’s like competing in an Olympic race wearing lead shoes. … Musk also noted that U.S. auto companies in China are barred from owning “even 50% of their own factory,” while there are five “100 percent China-owned EV auto companies in the U.S.” https://www.washingtonpost.com/news/innovations/wp/2018/03/08/elon-musk-chinas-trade-policy-like-competing-in-an-olympic-race-wearing-lead-shoes/?utm_term=.a61c6ae14089 Regarding BMW, I… Read more »

Nothing wrong with opinion pieces — I just prefer the actual opinion bits clearly distinguished from other bits stated as fact 🙂

Just to be clear, I’m not questioning that China has major hurdles to fair competition for foreign makers. I’m just sceptical of the idea that Chinese officials are walking back on promises made to foreign investors all the time. The specific example of tariffs doesn’t actually affect direct investments; and it’s a result of Trump’s trade war, not something the Chinese government did on a whim.

Of course I might be too optimistic, and there *are* indeed broken promises all the time — I’d just wish for some more substantial indication of this, when painting such a negative picture…

Regarding the technology transfer thing, I wouldn’t read too much into it. The evasive wording suggests to me that Tesla actually didn’t show willing to make any major concessions on that; and the official just didn’t want to straight-out admit that to the Chinese press…

There are plenty of other examples. And not just automakers themselves. Such as how China decided on a whim to not allow south korean companies Samsung and LG to sell their batteries in China… even AFTER the companies were driven by regulations to build factories in China. If Tesla builds a factory with Panasonic (or samsung or whoever they decide) then China pulls a stunt like this, Tesla is in a huge bind. https://insideevs.com/lg-chem-samsung-sdi-hit-by-chinese-sanctions-now-exports-cells-from-china/ Similarly, China would now allow EVs using LG Chem batteries to qualify for subsidies. Hyundai was unable to get access to subsidies for its vehicles. Just because China was in a spat with South Korea. Now they’re in a spat with the US. The same thing ocurred with buses using Samsung and LG-Chem batteries: https://insideevs.com/samsung-sdi-and-lg-chem-have-a-battery-problem-in-china-where-subsidies-were-redirected-to-lfp-type-cells/ Of course, the government has no issues with CLONE LG Chem batteries as long as a local company makes them. https://insideevs.com/geely-electric-cars-use-lg-chem-cloned-batteries/ With Tesla controlling its own battery supply due to its partnership with Panasonic, it should look at Chinas treatment of foreign battery makers as well. Why shouldn’t Japan be next? None of the other policies are about anything other than protecting Chinese companies. https://insideevs.com/panasonic-could-make-battery-cells-with-tesla-in-china/ I could go into all these… Read more »

I see… I have seen occasional mentions of protectionist battery policies before; but I had no idea how ridiculous the situation really was.

Of course that would only affect Tesla if they actually hope to qualify for the subsidies at all… But then again, given that track record, who know what new forms of harassment they might come up with.