Tesla changes as­sem­bly

Musk takes risky sim­u­la­tion short­cut to design new tool­ing

The Witness - Wheels - - MOTORING - ALEXAN­DRIA SAGE

TESLA’S chief ex­ec­u­tive Elon Musk took many risks with the tech­nol­ogy in his com­pany’s cars on the way to sur­pass­ing Ford Mo­tor Com­pany’s mar­ket value.

Now Musk is push­ing bound­aries in the fac­tory that makes them.

Most au­tomak­ers test a new model’s pro­duc­tion line by build­ing ve­hi­cles with rel­a­tively cheap, pro­to­type tools de­signed to be scrapped once they de­liver doors that fit, body pan­els with the right shape and dash­boards that don’t have gaps or seams.

Tesla, how­ever, is skip­ping that pre­lim­i­nary step and or­der­ing per­ma­nent, more ex­pen­sive equip­ment as it races to launch its Model 3 sedan by a self-im­posed vol­ume pro­duc­tion dead­line of Septem­ber, Musk told in­vestors last month.

Musk’s de­ci­sion un­der­scores his high-risk tol­er­ance and will­ing­ness to forego long-held in­dus­try norms that has helped Tesla up­end the tra­di­tional auto in­dus­try. While Tesla is not the first au­tomaker to try to ac­cel­er­ate pro­duc­tion on the fac­tory floor, no other ri­val is putting this much faith in the pro­duc­tion strat­egy suc­ceed­ing.

Musk ex­pects the Model 3 roll­out to help Telsa de­liver five times its cur­rent an­nual sales vol­ume, a key tar­get in the au­tomaker’s ef­forts to stop burn­ing cash.

“He’s push­ing the en­ve­lope to see how much time and cost he can take out of the process,” said Ron Har­bour, a man­u­fac­tur­ing con­sul­tant at Oliver Wy­man.

In­vestors are al­ready count­ing on Tesla’s fac­tory floor suc­cess, with shares soar­ing 39% since Jan­uary as it makes the leap from niche pro­ducer to mass pro­ducer in far less time than ri­vals.

There are cau­tion signs, how­ever. The pro­duc­tion equip­ment de­signed to pro­duce mil­lions of cars is ex­pen­sive to fix or re­place if it doesn’t work, in­dus­try ex­perts say. Tesla has en­coun­tered qual­ity prob­lems on its ex­ist­ing low-vol­ume cars, and the Model 3 is de­signed to sell in num­bers as high as 500 000 ve­hi­cles a year, rais­ing the po­ten­tial cost of re­calls or war­ranty re­pairs.

“It’s an ex­per­i­ment, cer­tainly,” said Con­sumer Re­ports’ Jake Fisher, who has done ex­ten­sive test­ing of Tesla’s pre­vi­ous Mod­els S and X.

Tesla could pos­si­bly fix er­rors quicker, speed­ing up the process, “or it could be they have un­sus­pected prob­lems they’ll have a hard time deal­ing with”.

Musk dis­cussed the de­ci­sion to skip what he re­ferred to as “beta” pro­duc­tion test­ing dur­ing a call last month with an in­vited group of in­vestors. De­tails were pub­lished on Red­dit by an in­vestor on the call.

He also said that “ad­vanced an­a­lyt­i­cal tech­niques” — code word for com­puter sim­u­la­tions — would help Tesla in ad­vanc­ing straight to pro­duc­tion tool­ing.

Tesla de­clined to con­firm de­tails of the call or com­ment on its pro­duc­tion strat­egy.

The auto in­dus­try’s in­cum­bents have not been stand­ing still. Volk­swa­gen AG’s Audi di­vi­sion launched pro­duc­tion of a new plant in Mex­ico us­ing com­puter sim­u­la­tions of pro­duc­tion tools — and in­deed the en­tire as­sem­bly line and fac­tory — that Audi said it be­lieved to be an in­dus­try first. That process al­lowed the plant to launch pro­duc­tion 30% faster than usual, Audi said. An Audi ex­ec­u­tive in­volved in the Mex­i­can plant launch, Peter Hochholdinger, is now Tesla’s vice pres­i­dent of pro­duc­tion.

Musk has spo­ken to in­vestors about his vi­sion of a fac­tory that uses ar­ti­fi­cial in­tel­li­gence and ro­bots to build cars faster than hu­man as­sem­bly work­ers could man­age. But there are lim­its to what tech­nol­ogy can do in the heav­ily reg­u­lated car busi­ness.

Tesla will still have to use real cars in crash tests re­quired by the U.S. gov­ern­ment, be­cause fed­eral rules do not al­low sim­u­lated crash re­sults to sub­sti­tute for data from a real car.


Tesla CE Elon Musk.

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