Tesla’s 6-Day Factory Shutdown Should Fix Model 3 Production Issues

Tesla

MAY 16 2018 BY DOMENICK YONEY 47

Two steps forward, one step back

The road from manufacturing dozens of Tesla Model 3 sedans per week to 5,000 by the end of December 2017  June 2018 is a long and twisting one, with many stops and starts along the way. Just as we learned the California automaker was approaching the 500 per day mark, a report from Reuters claims that the company is planning a six-day stoppage of the line at the end of this month — specifically from May 26 to the 31st.

Production related – Tesla Model 3 Production Pushing Towards 4,000 Per Week

Since the report’s author cites unnamed sources and is the same person who erroneously wrote that the Model Y would begin production in November of 2019 at the Fremont factory, which will have no capacity to manufacture an additional vehicle, we reached out to Tesla for confirmation. We received no direct comment on the Reuters‘ piece, but were pointed to a statement in the company’s Q1 shareholder letter which states that they expect to shut down the line as they have in the past, in order to increase throughput and hit its 5,000 per week target by the end of the 2nd quarter. You can read that full text below.

Tesla has temporarily halted Model 3 production in the past, including five days in February and five more in April. In response to an article by Ars Technica titled, “Experts say Tesla has repeated car industry mistakes from the 1980s,” CEO Elon Musk replied on Twitter three days ago that the piece was “a fair criticism,” but they are “…fixing it fast. Hackathon going on right now to fix 2 worst robot production chokepoints. Looks promising.

The Reuters report additionally indicates that more time per day is spent in production, with “…teams working on general assembly have already switched to three shifts, a schedule that helps maximize capacity and flexibility.” It also mentions work on the bodies of the Model 3 vehicles is believed to be happening on a two 12-hour shift basis.

Statement from the Tesla Q1 shareholder letter:

“We continue to target Model 3 production of approximately 5,000 per week in about two months, although our prior experience has demonstrated the difficulty of accurately forecasting specific production rates at specific points in time because of the exponential nature of the ramp. In order to achieve this production rate, we plan to take additional days of downtime during Q2, just like we did in Q1. We have already done this several times during the Model 3 ramp, including once in the third week of April to fix several small, known constraints, enabling higher levels of output. Just before taking this latest downtime, we produced 2,270 Model 3 and 2,024 Model S and Model X vehicles in the prior seven days, which was a new record for us. Furthermore, in the just over two weeks between the beginning of April and the planned downtime, we had produced 4,750 Model 3 vehicles, which was already about half the production of the entire prior quarter.”

Source: Reuters, Tesla

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47 Comments on "Tesla’s 6-Day Factory Shutdown Should Fix Model 3 Production Issues"

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1980’s Detroit is not 2018 Silicon Valley, General Motors is not Tesla, and Roger Smith is no Elon Musk.

Roger Smith (DeadNow) Ran GM into the Ground As he Took Hundred Million Dollar Bonuses for himself. He had a 5500 sq.ft Fully Furnished Cottage on an Island Near My House that he used Only 2 wks a yr for pheasant hunting & Kept a Woman there on the Payroll 24/7 to look after it..

All true. And, poor dumb GM built twice as many cars per week, with half as many people, at NUMMI as Musk.
And made money doing it. Strange you draw that comparison, frankly.

One’s a car company, the other’s an over-promising, under-delivering, non-profitable…. somethin’.

“…made money….” and yet went bankrupt…twice.

Twice? When?

In TSLA fanboi world, anything negative about GM gets multiplied by at least 2. 😀

Elon just tweeted “New 20 car, in 30 minute, burst rate. Should reach 25, after next 10 day shut-down”.
/s

For some posts /s stands for sarcasm. Here it just stands for silly

Now I’m totally confused by the rates, and a 10 day shutdown?

It is a 6 day shutdown, not 10. Tesla needs to have a reason to avoid delivering 200k cars by late June. this shutdown gives them the background details that allows them to explain why they deliver a lot more cars in July.

And to get ready to produce dual motor and performance models when orders begin next week.

While the people who want a short range, base Model 3 that waited for hours in lines March 31st, 2016 continue to get punted to the rear. Those poor saps that still believe they’ll get their $35k 3 anytime soon.

But is that really Tesla’s problem? – As long as they have a sales queue to fill, why would they not sell the higher price offering (while their costs are higher at the start of the learning curve), and to be honest longer mileage EV’s likely displace more gasoline faster.

So other than folks having to wait (or bail, their choice), it’s sort of win-win-win, for Telsa, for investors, and for lower CO2 levels.

I’m missing the major downside here – given that the deposit is refundable, and there is more demand than production capacity, so someone has to wait…

Or even worse: settle for a Bolt.

Existent >>> vaporware

I’m not sure the fascination is with Tesla daring to do a shutdown, which is something that literally every single car maker does at least once a year, usually for a number of weeks.

Heck, GM shut down for 5 weeks last summer: https://www.cnbc.com/2017/06/14/gm-extending-summer-factory-shutdown-as-car-sales-slow.html

The difference GM shuts down because the inventory is high, not because they need to rework the plant most time. GM usually does most of the plat rework before vehicle launch and the uses weekends to make repairs.

You really know nothing about car manufacturing. GM shutdown is scheduled at the same time they do any retooling of the line for then next model year changeover. Just like Ford, Nissan, BMW, Honda, Toyota, Dodge/Ram, etc who also time their shutdowns every year for retooling for car that have changes for model year changeover. Retooling is central to the traditional shutdown.

But gee, like shutting down for high inventory every single year at the exact same time in the middle of the height of sales season. Wow, you really make GM and all the other car makers who schedule shutdowns every single year at the exact same time sound dumb, shutting down for their inability to manage their inventory in order to CUT their production numbers, vs. Tesla shutting down for a fraction of the time to INCREASE production numbers. Was that your intent? To show how much better the Tesla shutdown is?

When you make stuff up, you should be more aware of the consequences of your lies.

Nix, you are so out of context here… If you read what I said…”GM usually does most of the plant rework before vehicle launch ” That could be in the summer break, or at different times of the year.

GM does not start and stop their line weekly to make repairs because the assembly design does not work… That is all figured out in Pre-Production PPAP, and factory validation builds are done in the industry for a reason… Tesla just thought they were smarter, and now the investors are paying the price for that arrogance.

“GM does not start and stop their line weekly to make repairs”

Neither does Tesla. It is to prepare for the M3D that Elon said would become available in July. Just last year GM shutdown Bolt production for over three weeks.

No one should be surprised because I called this a couple months ago.

It is rather hilarious that the Tesla fanbois like nix decry any critical article that CNBC puts out about their beloved Tesla as short FUD, but then are more than happy to quote the same CNBC for non-flattering news of other manufacturers.
Just like Trumpers. Positive, slanted news = REAL. Anything else = FAKE!

But unlike CNBC, we can be sure that anything you post about
Tesla is fake news.

“Tesla just thought they were smarter, and now the investors are paying the price for that arrogance.”

They are smarter. They are also less experienced in relevant manufacturing processes. That is common in SV. It takes several iterations to get it right but they will and they’ll improve on the processes along the way. OTA updates are but
one example.

So smart they had to shut down the factory and rip out a bunch of robots and equipment because they (or their CEO mainly) thought he could replace humans with robots? And wasting millions of dollars in the process. That kind of smart? No wonder Tesla loses hundreds of millions of dollars every quarter.

Yes, contrary to your spin, that is exactly right. It’s right because Tesla is willing to try new things. Some of them work, some of them don’t. This sort of thing is exactly why “young Turk” companies often successfully challenge existing market leaders in disruptive tech revolutions.

For example, analysts have kept predicting that Tesla would have to start using traditional franchises to deal with the higher volume of Model 3 sales. Tesla has once again proved them wrong, and has started building dedicated Delivery Centers to deal with the increasing volume.

Will Tesla eventually have to give in and resort to traditional franchised dealerships? Sure doesn’t look like it! Instead, it looks like legacy auto makers will start using Tesla’s business model for sales. Or at least, those which manage to survive the EV revolution will. The other dinosaurs will become extinct.

They are not smarter, just more arrogant. They could have hired people with the necessary experience. And I think they did hire the right people, but they weren’t willing to listen to them – arrogance.

They may have higher IQs, but they are not smarter. Experience is a big part of”smart”.

Making mistakes is an important part of the learning process. When we can look at 2018 in our rear view mirror we’re going to see the M3 is less than a year behind which is much better than the MX. They’ve made some embarrassing and expensive mistakes but they will survive and learn from those mistakes.

Relative to the M3 the Bolt roll out has ostensibly been flawless….and yet it is likely to have little more impact than the Spark EV. What does it say if a Tesla cluster f*%k is more significant and successful than GM’s near perfect execution?

LOL, great point. I was impressed with GM’s execution from design to prototype to commercial production of the Bolt. What they lacked was any ambition to actually push the Bolt to true mass production and sales. GM is perfectly content to build and sell a couple or few thousand Bolts per month and has no apparent in interest building them in mass quantity and pricing it where it would actually be a sales hit.

Dave said:

“The difference GM shuts down because the inventory is high…”

No. That’s not the usual reason.

If you don’t know any more than this about the subject, then you should be silent and learn from your betters.

I just want to thank Elon Musk and everyone working at Tesla for working as hard as they are, so that we Americans, and the world, can get your Model 3’s as fast as possible. Without you guys, there’s slim ( to none ) pickings out there. And no one else has yet build anything above 30,000 compliance cars per year.

Absolutely right! And for only $27,500 it’s a bargain.

Really? The $35k Model 3 exists and has been sold to customers? I missed that one.
The $35k Model 3 is vaporware. Does anyone even have official specs of the base 3? NOPE.

And Tesla is one of the few companies that sells their BEV offerings in all fifty states.

No compliance vehicles there. Unlike several other companies I could mentioning.

I’d like to know the details on what the constraints were, and what the planned changes are.

Does anyone really expect Tesla to provide that kind of transparency?

Where’s the leakers when you need them 🙂

We’ll never know, as you are using nonsense words” like “constraints”, “details” and “planned” that only useless middle-managers and failing contractors stuck in legacy production-business-models use.

“We continue to target Model 3 production of approximately 5,000 per week in about two months…”

Notice how Tesla has softened the language used for their Model 3 production goals over the course of the year. Currently Model 3 production is aimed for “approximately 5k/week in about 2 months.” In their Q1’18 earnings letter, their 3 production goals were stated as a firm “5k/week by Q2 end”.
In their Q2’18 earnings letter published earlier this month, that firm timeline morphed into “approximately 5k/week in about 2 months”.
Read the earnings letters and the changes to the Model 3 production timeline language yourself: http://ir.tesla.com/releases.cfm?view=all

Tesla is quietly moving the goal posts for their end of Q2 Model 3 production, leaving wiggle room for their inevitable failure to achieve 5k Model 3’s/week production by end of Q2 as originally stated. Perhaps Elon has wised up ever so slightly, as he’s finally realized he’s incapable of meeting self-proclaimed hard deadlines, so he’s giving wishy-washy timelines as solid as firm tofu. 😀

Whoops, replace “Q1’18” letter with “Q4’17”, and “Q2’18” with “Q1’18”.

I’m very glad to see that Elon is finally facing reality in recognizing that he can’t accurately predict how fast this ramp up is going to go. It’s about time!

Only a serial Tesla bashing FUDster would try to spin that as a bad thing.

‘Fixing’ production issues is an iterative process. 6 days is very little time. Great to see Tesla striving to get on track ASAP but a fundamentally flawed production approach will take years, not days, to comprehensively address. Musk is brilliant but the laws of physics apply to him just like the rest of us. Hopefully Tesla isn’t just making changes to crank out a higher volume of poor quality product that, currently, is shipped to subcontractors immediately after coming off the line to be ‘fixed’. Just like Detroit did it in the 60’s, 70’s and 80’s.

There is no physics problem, it was an automation problem. The line needed, and still needs, more workers to replace automated processes that are really hard to automate. Paint, welding, most of battery production are good things to automate, but tesla went to far, and now needs to make the plant look more like a toyota plant, and less like a lights out plant. My guess is it takes a year – and we are well into that timeframe. When all those orders came in the only way to get to 10K a week was automation, but that is a really hard problem. 5K a week, they can do that fairly easily from here. I hope they improve quality during this shut down.

So I guess this shutdown is to both fix problem areas in the current production line and to enable the addition of the dual motor and Performance options.

Man, I cannot wait to see the new models. The dual motor, big battery Model 3 is the one I want, just the regular one, not the performance model. If it’s like the Model S we can expect improved performance, efficiency and range with the second motor. And I have no need for the bleeding edge nutso performance that the Performance package will offer, nor could I remotely afford it and the ongoing high maintenance costs that it requires (i.e. very expensive tires), though I do look forward to the Model 3 PD model smoking all comers in acceleration tests while also offering some of the best handling characteristics of any sports sedan.

“Since the report’s author cites unnamed sources and is the same person who erroneously wrote that the Model Y would begin production in November of 2019 at the Fremont factory…”

Yeah, it’s rather strange to see so many comments here written as if the 6-day shutdown is real. Tesla has said that they are indeed going to do a scheduled shutdown in the coming weeks, but they didn’t confirm it will be as long as 6 days. But then, in the past, sometime these “shut down to ramp up” events have taken longer than planned, so who knows?

Anyway, I’m glad to see Tesla is making progress, and fie upon calling it “two steps forward and one step back”! Shutdowns to relieve bottlenecks and make improvements is a necessary and expected part of Tesla’s progress.

And it’s rather silly to compare to a legacy auto maker’s production at one of the factories it’s been running for decades. How about comparison to a new assembly plant that a legacy auto maker builds? I’ll bet you’d find the same start-and-stop procedure going on there, as the plant was brought up to speed. How is that different than Tesla bringing the new Model 3 production line up to speed?

The difference, of course, is that those legacy auto makers don’t have outsiders and financial analysts examining everything they do with a microscope, ready to pounce on anything that can possibly be spun or twisted into sounding negative.

Go Tesla!

If you shut down for a week every month, 4000 a week means less.