Model 3 Production Line Paused for Improvements

Tesla’s Model 3 production line has shut down for four to five days, according to a report from Buzzfeed.

A Tesla spokesperson said the assembly line is stopped to “improve automation.” According to Buzzfeed:

The announcement of the four- to five-day production pause for Model 3 came without warning, according to Tesla employees who spoke with BuzzFeed News. During the pause, workers are expected to use vacation days or stay home without pay; a small number of workers may be offered paid work elsewhere in the factory.

Tesla had a similar pause of production in February. At the time, the company said the Model 3 production plan includes periods of planned downtime in both the Fremont factory and Gigafactory 1 to improve automation and systematically address bottlenecks in order to increase production rates. “This is not unusual and is in fact common in production ramps like this,” the company told Bloomberg.

The latest pause comes just days after CEO Elon Musk told CBS that he has a “clear understanding of the path out of [production] hell.”

Tesla’s current goal is to manufacture 5,000 cars per week by the end of the second quarter, which was originally the year-end goal for 2017. The company said two weeks ago that it had achieved a production level of 2,000 Model 3s per week.

 

[beachbum77]

Unfortunately, there goes another week off the calendar. Ramp is still not where it was supposed to be on 3/31/18.

 

[trentbridge]

Unfortunately, there goes another week off the calendar. Ramp is still not where it was supposed to be on 3/31/18.

It makes sense to shut down the production line for four days if the resulting improvements are of such a magnitude that the daily production is permanently more efficient afterwards. If the shutdown takes the daily rate from say 300 to 400 a day then it justifies itself in less than a month.

 

[2012MS85]

Today I read several stories quoting Bloomberg’s analysis that M3 production is up 1k per week (i.e., now at 3k per week). Given Elon’s CBS interview last Friday saying plant automation hasn’t worked out as planned, this shutdown makes sense to correct things. The reality is that this week’s production appears to have gone the opposite direction (i.e., minus 1k) of all the stories tied to Bloomberg. So maybe 3 days at 350 M3s produced (only 1k M3s for the partial shutdown week)?

This is good news for all 3 reservation holders (like me) because it greatly increases the probability of Tesla not hitting 200k US EVs sold until after July 1. This means $7500 EV tax credits for every Tesla sold through NYE 2018

 

[beachbum77]

It makes sense to shut down the production line for four days if the resulting improvements are of such a magnitude that the daily production is permanently more efficient afterwards. If the shutdown takes the daily rate from say 300 to 400 a day then it justifies itself in less than a month.

I would agree if this was a planned shutdown and everyone knew it was coming. Seems it was not. Workers were just suddenly told to go home without pay or use vacation days. This sounds more like grasping at possible solutions in an unorganized manner. I had a boss once that ran a business this way. It was chaotic and emotionally draining for the employees. Needless to say, I stayed only long enough to learn what I wanted to know about the business and left. Within a year he shut down operations and laid everyone off. The root cause of his struggles were: 1) he did not really have much experience in the field. 2) he only retained the previous owners for 30 days. It was not long enough to learn the nuts and bolts of manufacturing, dealing with suppliers, and retail merchandising. Bottom line was he was in over his head and yet thought he knew everything without having real experience in the field. Past successes are no guarantee of your future efforts.

 

[Zapped]

Maybe it's just time to switch out the panel stamping dies

A little more hand work that at TESLA I assume

 

[Xenoilphobe]

Maybe adding the all wheel drive option to the line... Can't wait to get a P 3 D!!!!!

 

[TriTexan]

Unfortunately, there goes another week off the calendar. Ramp is still not where it was supposed to be on 3/31/18.

What you call "behind" appears to still be years ahead of where other automakers are. I get the frustration - my guess is that like me, you are a Tesla shareholder. But if - in the larger picture - this turns out to be a 3, 6, or even 9 month delay - all while other automakers take years to achieve the same. And IF Tesla manages to use these same manufacturing lines to make motors for the Semi and Model Y, and IF the improvements make another large increase in the production rate of the M3, then in the larger picture it's not as big a deal.

On the other hand - the competition IS coming for Tesla. At least they appear to be. So far we have the Jag iPace, which looks like a great take. And we have...well, there's the Bolt, which is rapidly losing momentum. And the Mission E, which is now taking reservations in Norway for a 2020 delivery...which seems almost as bad as the Model 3. So it's not like any big lessons have been learned - either that or the ramp up time for the Model 3, the world's first effort at true mass production of an EV, is actually not quite as horrible as people make it out to be.

Now I get what people want. What they want is for Tesla to make amazing, nearly-impossible deadlines and products no one else can compete with, to produce them below budget, and ahead of schedule. But that's not reality. In the real world, anything that is a stretch or a reach is highly subject to a miss. The target here is to make a reliable, affordable EV for everyone. And honestly - I don't think that Elon Musk cares if Tesla makes that, or if Tesla forces GM to make it. As long as the transition to sustainable energy and transportation is happening, then it's probably mission accomplished as far as Musk is concerned. And that probably holds true for most of Tesla's employees as well.

 

[TriTexan]

Maybe adding the all wheel drive option to the line... Can't wait to get a P 3 D!!!!!

THIS! I didn't buy a Model S because while they are rockets 0-60, the braking and handling wasn't quite sporty enough for me. But it LOOKS like there might be a truly sports-car oriented Model 3 coming out - with track-worthy braking and wheel and tire package. And while I would prefer a Model S with similar features, I think a Model 3 Performance edition might be better - lighter weight, better handling, and it appears this time around Tesla is making sure that cornering and braking are on par. My hope is they are using the BMW M3 as a comparable. If so, then the M3 Performance might be a new daily driver for me, replacing my modified, and very powerful CTS-V.

 

[Electroman]

I don't get what the big deal is. Improvements/upgrades and fixes to the line is expected. Not all fixes/modifications can be done without a shutdown. The last shutdown and upgrade helped them to ramp from less than 1000 to 3000. And now it is time to get a few more tweaks and fixes to ramp up even more further.

Why is everyone over-reacting for a few days shutdown? This is getting annoyingly ridiculous.

We should only be concerned if they have to slow down or shutdown due to lack of demand.

 

[TriTexan]

I don't get what the big deal is. Improvements/upgrades and fixes to the line is expected. Not all fixes/modifications can be done without a shutdown. The last shutdown and upgrade helped them to ramp from less than 1000 to 3000. And now it is time to get a few more tweaks and fixes to ramp up even more further.

Why is everyone over-reacting for a few days shutdown? This is getting annoyingly ridiculous.

We should only be concerned if they have to slow down or shutdown due to lack of demand.

Yeah - like a few other carmaker plants have had happen recently...

But those companies don't have a few hundred thousand people queued up WANTING a car.

These are first rate problems, for sure. But you are right - people are totally getting their panties in a wad over this. They get pissed when things aren't changing, then there is crying when a change to improve things IS made. It's a lose-lose for those folks I guess.

Me, as long as each few weeks sees an increase in output, I'm happy. That gives Tesla time to shut down the plant to make improvements and still keep their averages up.

Now I'm wondering though - was this improvement ready a few weeks ago, but Tesla could't take the PR hit of shutting down the line on the last week of Q1 production? It pains me to think that this update to the line was actually ready to go sooner, but that the PR nightmare of not making that last week was just TOO much to let the investing public see. Oh well - that's the way it goes sometimes.

 

[Kingdragon8]

I would agree if this was a planned shutdown and everyone knew it was coming. Seems it was not. Workers were just suddenly told to go home without pay or use vacation days. This sounds more like grasping at possible solutions in an unorganized manner. I had a boss once that ran a business this way. It was chaotic and emotionally draining for the employees. Needless to say, I stayed only long enough to learn what I wanted to know about the business and left. Within a year he shut down operations and laid everyone off. The root cause of his struggles were: 1) he did not really have much experience in the field. 2) he only retained the previous owners for 30 days. It was not long enough to learn the nuts and bolts of manufacturing, dealing with suppliers, and retail merchandising. Bottom line was he was in over his head and yet thought he knew everything without having real experience in the field. Past successes are no guarantee of your future efforts.

Well said........production (and its close cousin - quality) will continue to suffer. NO (Global) Automaker shuts down critical production unless is was part of a well orchestrated and extremely detailed plan.....this was not it appears.

 

[Kingdragon8]

Yeah - like a few other carmaker plants have had happen recently...

But those companies don't have a few hundred thousand people queued up WANTING a car.

These are first rate problems, for sure. But you are right - people are totally getting their panties in a wad over this. They get pissed when things aren't changing, then there is crying when a change to improve things IS made. It's a lose-lose for those folks I guess.

Me, as long as each few weeks sees an increase in output, I'm happy. That gives Tesla time to shut down the plant to make improvements and still keep their averages up.

Now I'm wondering though - was this improvement ready a few weeks ago, but Tesla could't take the PR hit of shutting down the line on the last week of Q1 production? It pains me to think that this update to the line was actually ready to go sooner, but that the PR nightmare of not making that last week was just TOO much to let the investing public see. Oh well - that's the way it goes sometimes.

Man, I always dreamed I lived in a world where I produced the most unbelievable product..........AND could lose, and continue to lose billions of dollars. 2,000/4,000/6,000 a week really doesn't matter! Automakers don't make money on small, sedan, EVs, regardless of volume. Tesla has the Early Adopter money (buying a $30k car for $50k) and the $7.5K Federal money....neither will last more than a year.

This is why Elon can be bullish on Q3/4 cash flows and margins...tick tock, tick tock!

 

[beachbum77]

THIS! I didn't buy a Model S because while they are rockets 0-60, the braking and handling wasn't quite sporty enough for me. But it LOOKS like there might be a truly sports-car oriented Model 3 coming out - with track-worthy braking and wheel and tire package. And while I would prefer a Model S with similar features, I think a Model 3 Performance edition might be better - lighter weight, better handling, and it appears this time around Tesla is making sure that cornering and braking are on par. My hope is they are using the BMW M3 as a comparable. If so, then the M3 Performance might be a new daily driver for me, replacing my modified, and very powerful CTS-V.

Texan

Can you provide a link to that info? The one report of a Model 3 at a track was that the brakes were gone by lap 4. Photos were posted too. Tesla better focus on the $35,000 car before working to produce a small number of $70k Model 3s.

 

[AZRI11]

Man, I always dreamed I lived in a world where I produced the most unbelievable product..........AND could lose, and continue to lose billions of dollars. 2,000/4,000/6,000 a week really doesn't matter! Automakers don't make money on small, sedan, EVs, regardless of volume. Tesla has the Early Adopter money (buying a $30k car for $50k) and the $7.5K Federal money....neither will last more than a year.

This is why Elon can be bullish on Q3/4 cash flows and margins...tick tock, tick tock!

I agree. I try to explain this to people. 55k car that is really a 35k car. There is your cap raise.

 

[EinSV]

This is just a continuation of the pauses over the past couple months that led to doubling of Model 3 production from ~1000 to ~2000 per week.

Tesla explained this in their recent update on production:

We were able to double the weekly Model 3 production rate during the quarter by rapidly addressing production and supply chain bottlenecks, including several short factory shutdowns to upgrade equipment. Tesla - Current Report
​

The previous shutdowns included one from Feb. 20-24, so similar in length to this one. https://www.bizjournals.com/sanjose/news/2018/03/12/tesla-model-3-production-tsla.html

Tesla's earlier shutdowns to improve production seemed to work out great.

The short sellers on this thread trying to spread FUD are making much ado about nothing.

 

[TT97]

I agree. I try to explain this to people. 55k car that is really a 35k car. There is your cap raise.

How is this different then most other manufactures? A base 3-series BMW is $34,900. If you upgrade the engine and add PUP and auto-pilot type functions, you are quickly north of $60k (and then add a lot more for the M3/M4 models). The same applies to the C-series or A4/S4.

 

[TT97]

My only concern, if it is true, is sending the workers home without pay or forcing them to use vacation days. Any savings achieved from the furlough will be quickly offset by lost productivity due to morale.

 

[AZRI11]

How is this different then most other manufactures? A base 3-series BMW is $34,900. If you upgrade the engine and add PUP and auto-pilot type functions, you are quickly north of $60k (and then add a lot more for the M3/M4 models). The same applies to the C-series or A4/S4.

5k run rate at high margin. Demand will never cease. World wants and needs clean air. Ice is just starting it's slow fade.

 

[Electroman]

(buying a $30k car for $50k)

Really? are you sure?

How about this - I give you $30k and you go get me a 320 mile range EV that drives itself.

if you can't then please stop posting nonsense. Rather just stop posting.