Just announced. 500k cars by 2018 instead of 2020

[Drivin]

If I want to come back down to earth and have a negative outlook on Tesla news, I just need to search out your posts.

You think that a comment about the organizational impact on "stretch goals" that are not achieved is some sort of negative outlook on Tesla? Well, ok then. Caution: stay away from any business and organizational behavior classes.

Not sure why you have a problem with coming down to earth either.

 

[ttupper92618]

There is absolutely no evidence that that is the case.
Stretch goals can also demotivate organizations, result in a culture of "oh, we heard this before" and behave like it is yet another "stretch" goal that won't happen, result in staff saying that are okay with an abusive paternal environment that is never happy with results, etc.

Stretch goals work very well with A players. They work poorly with B and C players. That said, it's not my place or intent to argue that stretch goals are awesome. I noted that they create a very painful working environment. The question you should then ask is, does Elon Musk care if working at one of his companies is hard? I think the answer to that question is very obvious.

Anecdotally, I will just observe that in my professional life, I've worked in these sorts of environments, and faced extremely hostile schedules. I've never failed to meet a stretch goal. And yes, it was hell. But these goals did get us further ahead than we would otherwise have been. Take that for what it is worth.

Finally I want to offer this: I don't know if any of what I am saying about EM is true or not; it is cobbled together from what I've read about him, and things he has said. I'm formulating a hypothesis like anyone else... but it is, at least, based on experience working in startups. I wonder if EM ever reads this stuff and is amused by how well we all think we know him.

 

[Vitold]

Stretch goals work very well with A players. They work poorly with B and C players. That said, it's not my place or intent to argue that stretch goals are awesome. I noted that they create a very painful working environment. The question you should then ask is, does Elon Musk care if working at one of his companies is hard? I think the answer to that question is very obvious..

I think many did not expect for Model 3 to be this far along. If all Tesla need is 6-8 to finalize the exterior what production is what they need to focus on.

Therefore EM figured it's time to transition Tesla into the high volume manufacturer, sooner the better. It was inevitable and much needed based on what we see happening with Model X "ramp-up". I also suspect that EM sees the need to keep suppliers on a short leash and want's to keep them 100% committed to the project. He does so by announcing high volume production and clear schedule.

 

[182RG]

Eight years later, on July 20, 1969, two American astronauts walked on the Moon, thanks to virtually limitless funding, and the vast resources of the military industrial complex".

I like the analogy, but it doesn't quite fit. The key here is whether or not investors believe...

 

[JeffK]

I like the analogy, but it doesn't quite fit. The key here is whether or not investors believe...

Luckily SpaceX isn't a publically traded company...

 

[Topher]

Eight years later, on July 20, 1969, two American astronauts walked on the Moon, thanks to virtually limitless funding,

What else are you going to do with that money? Bail out a bank? 50 years of NASA < 2008 Bank bailout.

Thank you kindly.

 

[Drivin]

Stretch goals work very well with A players. They work poorly with B and C players. That said, it's not my place or intent to argue that stretch goals are awesome.

Well, someone up thread thought that they make organizations more effective which is not true. Can happen in some cases for short term goals, longer term it creates bigger issues as it has an impact on the culture and the type of people who decide they want to stay in that environment.

The question you should then ask is, does Elon Musk care if working at one of his companies is hard? I think the answer to that question is very obvious.

Agreed. He shouldn't care since he has decided that is what he wants. Navigating that, more than any new features will determine the long term success of the mission. It is hard enough to scale and find great talent, that just creates another constraint. Microsoft was like that in the early days too.

I wonder if EM ever reads this stuff and is amused by how well we all think we know him.

Gosh, I hope he isn't spending time here. He has work to do! Two execs are gone, got a lot of scaling to do and have you seen SunPower's recent earnings ?

 

[LectrikPower]

This kind of aggressive action is necessary now. I think in 10 years or so Tesla will be humming along at a much more relaxed pace churning out some sweet cars. Can't wait.

 

[LectrikPower]

Well, someone up thread thought that they make organizations more effective which is not true. Can happen in some cases for short term goals, longer term it creates bigger issues as it has an impact on the culture and the type of people who decide they want to stay in that environment.

It does make them more effective in the short term. Long term musk will probably hand off the reigns to someone else after Tesla's production is steady

 

[int32_t]

I think many did not expect for Model 3 to be this far along. If all Tesla need is 6-8 to finalize the exterior what production is what they need to focus on.

Therefore EM figured it's time to transition Tesla into the high volume manufacturer, sooner the better. It was inevitable and much needed based on what we see happening with Model X "ramp-up". I also suspect that EM sees the need to keep suppliers on a short leash and want's to keep them 100% committed to the project. He does so by announcing high volume production and clear schedule.

Hope you're right. I don't want to see Tesla crash and burn by tripping over its shoelaces on the way to getting the best-ever EV on the road. For the record, better late than never. I would much rather have a Model 3 on my driveway in 2025 than have no Model 3 at all.

And yeah, since it sounds like engineering is (for all intents and purposes) complete, getting suppliers on board is the most important next step. Talking big about sales numbers and how soon parts are needed is vital. Bend your employees and keep them busy, Elon, but don't break them! Please!

Did anybody see the opinion article over on Ars about this? No link so you don't have to go there and add a view to their site; just read the important bit here:

The upcoming Model 3 will be far less complex than the Model X and Model S, yet any interruption in the flow of development and integration of parts from outside suppliers will put the production schedule at risk. Even the most stellar manufacturing companies make plans for such interruptions, but Tesla thinks it's immune. In fact, Musk indicated that Tesla could make those parts by itself at its Fremont factory, an absurd assertion.

Somebody explain the logic here.
1. A parts shortage from an outside supplier is the #1 thing that will destroy the production schedule. (OK)
2. Tesla must have a plan to mitigate this issue. (OK)
(Tesla's solution is to make parts themselves if a supplier falls through.) (Sounds good to me.)
3. Since Tesla can't possibly make parts for its own car, they don't have a plan. (??)
4. Therefore, Tesla "thinks it's immune" and will fall behind. (??)

 

[Doug_G]

One post moved to snippiness

 

[Vitold]

Somebody explain the logic here.
1. A parts shortage from an outside supplier is the #1 thing that will destroy the production schedule. (OK)
2. Tesla must have a plan to mitigate this issue. (OK)
(Tesla's solution is to make parts themselves if a supplier falls through.) (Sounds good to me.)
3. Since Tesla can't possibly make parts for its own car, they don't have a plan. (??)
4. Therefore, Tesla "thinks it's immune" and will fall behind. (??)

I would not rule out supplier sabotage (by delaying project), especially by those that are closely aligned with auto industry (which is most of them). Tesla can plan for small scale in-house production to mitigate risk of delays especially in the beginning of a roll-out (and sends message that they cannot be blackmailed).

Considering above, both, Tesla and article are right - Tesla producing parts internally can help in the beginning (on small scale) but it cannot be relied on when they start making, say, 100000/yr copies. Once they are making a lot of cars they will need to source parts from multiple suppliers to mitigate the risk. And, that's what Ars article is talking about.

 

[JeffK]

But there's a Tesla coolness factor... I mean to be able to say you supply parts to Tesla is cool and for you to be able to continue to say that then you'd probably have to deliver on time.

I mean you can always whip out a banjo and say you supply parts to Ford, but it just doesn't carry the same weight or street cred..

 

[ummgood]

Stretch goals work very well with A players. They work poorly with B and C players. That said, it's not my place or intent to argue that stretch goals are awesome. I noted that they create a very painful working environment. The question you should then ask is, does Elon Musk care if working at one of his companies is hard? I think the answer to that question is very obvious.

Anecdotally, I will just observe that in my professional life, I've worked in these sorts of environments, and faced extremely hostile schedules. I've never failed to meet a stretch goal. And yes, it was hell. But these goals did get us further ahead than we would otherwise have been. Take that for what it is worth.

Finally I want to offer this: I don't know if any of what I am saying about EM is true or not; it is cobbled together from what I've read about him, and things he has said. I'm formulating a hypothesis like anyone else... but it is, at least, based on experience working in startups. I wonder if EM ever reads this stuff and is amused by how well we all think we know him.

I completely agree with this. I do believe that if a company rewards its employees handsomely for putting in the extra effort then people will last longer working in this environment.

In addition if a company has a reputation for rewarding employees and being a place where someone can gain vast skill quickly out of school or even as a seasoned employee people will flock there. Yes they will lose people as they burn out and then more people will be lined up to take that place. It is a fine line though if you get too many people burned then you start to hinder your ability to hire new talent. Look at Amazon. I think they walk a fine line between being a place to get amazing skills but they also are notoriously brutal with their employees but they still manage to gain new ones. I think it is because people who are new really want a challenge that will set them apart from the average college grad.

Right now I think Tesla is this company. Being part of Tesla right now could be a life changer for your career. Hiring companies are watching and if the company has a reputation for hiring the best then it shouldn't be too hard to get another job when you burn out. Can they keep this up indefinitely I don't know. I am sure parts of the company later will become easier to work for similar to Apple. I have friends who work for Apple and some groups still have the original Steve Jobs notorious work ethic but other groups are more laid back where the manager understands you have a family.

Tesla while they ramp can get away with these insane stretch goals. How the company treats those employees when this ramp is all said and done will determine how Tesla fares with new employees in the future. I hope the people who put in the effort are rewarded appropriately. If they are burned out at the end of this then they can move on to somewhere more stable.

 

[182RG]

I would not rule out supplier sabotage (by delaying project), especially by those that are closely aligned with auto industry (which is most of them). Tesla can plan for small scale in-house production to mitigate risk of delays especially in the beginning of a roll-out (and sends message that they cannot be blackmailed).

That's a black helicopter, tin-foil hat wearing prediction right there............

Suppliers want revenue with good margins, production stability/predictability, and a good relationship (read: they don't want customers who act like ass-hats).

 

[Vitold]

That's a black helicopter, tin-foil hat wearing prediction right there............

Suppliers want revenue with good margins, production stability/predictability, and a good relationship (read: they don't want customers who act like ass-hats).

Exactly, Tesla needs to convince them they are (and will be) good customer. One way to do it is to announce that "they would like 500,000 of this part, please".

Industrial espionage and sabotage is no fairly tale.

 

[Drivin]

But there's a Tesla coolness factor... I mean to be able to say you supply parts to Tesla is cool and for you to be able to continue to say that then you'd probably have to deliver on time.

I mean you can always whip out a banjo and say you supply parts to Ford, but it just doesn't carry the same weight or street cred..

Not sure how many companies that are large enough to supply a company like Tesla cares about "coolness" vs. "margins" and "profits".

I am sure GT Advanced would have preferred to have money over the coolness of trying to meet Apple's sapphire requirements

 

[ModelNforNerd]

Not sure how many companies that are large enough to supply a company like Tesla cares about "coolness" vs. "margins" and "profits".

I am sure GT Advanced would have preferred to have money over the coolness of trying to meet Apple's sapphire requirements

Nvidia seems to be a proud partner up to this point. If they have as much or more to do with the center console screen, I suspect we'll be hearing all about it.

 

[Az_Rael]

I find it interesting that they are just recently setting up a "growth" team for the ramp up:

Tesla is building a new Growth Team ‘from scratch’ ahead of the Model 3 launch, hires from Facebook and Uber

It seems like this sort of team should have been in place long ago, but maybe I don't understand silicon valley sorts of businesses (I work in the old-school slow defense industry)

 

[Drivin]

I find it interesting that they are just recently setting up a "growth" team for the ramp up:

Tesla is building a new Growth Team ‘from scratch’ ahead of the Model 3 launch, hires from Facebook and Uber

It seems like this sort of team should have been in place long ago, but maybe I don't understand silicon valley sorts of businesses (I work in the old-school slow defense industry)

From the article:

to start and scale the Growth Analytics function....This data will be useful to determine the best way to expand Tesla’s user base

It appears to me more data oriented around customer acquisition and so getting people from Uber and Facebook makes sense.

I would expect that they are also aggressively recruiting people who know the other side, being able to ramp up manufacturing and quality control and customer service. I don't think they will find many of those people at Facebook.