Blog Musk Gives Model 3 Factory Tour; Says He Sees a ‘Path Out of Hell’

[vc_row][vc_column][vc_column_text]Tesla CEO Elon Musk says he now has a “clear understanding of the path out of hell.”

In an interview with CBS This Morning, Musk gave viewers a look at the Model 3 production line that he’s anxious to improve. Musk even showed the “narrow” couch and conference room floor he’s taken to sleeping on during busy times at the factory.

Musk said Model 3 production trouble escalated into something he did not anticipate.

“I need to figure out how to be better and then we can be better at meeting goals,” Musk said.

The company “got complacent” about “core technology,” Musk said without providing specifics about the technology. He also said Tesla put too much new technology into the Model 3 all at once. “Should have staged it,” he said.

Musk also conceded that his production line is too robotic. He would like to add more human workers.

The full segment is below.[/vc_column_text][vc_video link=”https://youtu.be/lOz7cPJQd8E” video_title=”1″][/vc_column][/vc_row]

 

[kbM3]

People sure like to consider Elon a failure early in the game. They haven’t even been producing the Model 3 for barely 9 months and already so many say he can’t make it. But yet already the Model 3 is outselling the Bolt which is built by a company that’s been around for a century. Just goes to show that most people on here don’t have the stomach for building a billion dollar business. Give him time. This time next year and these issues will be a thing of the past.

It’s stunning to me that people criticize someone as successful as Elon, knowing far less about the problem space, having put in less thought and probably not having achieved 1% of what he has.

 

[kbM3]

Musk should not be given credit for seeing a path out of hell, he is the one who put them on the path to hell in the first place by being incredibly shortsighted. He chose to re-invent the wheel rather than using tried-and-true manufacturing methods that work. This "path out of hell" is not coming for free, all of these mistakes are costing Tesla money. Any other CEO would have been canned a long time ago. Musk's "vision" is just as much an albatross as it is blessing.

Let's get this straight: Musk is piss poor CEO.

Yeah. What has he done? Just because he is the first person in history to start 3 $10B companies doesn’t mean he knows hat he’s doing.

Guy is really a bad ceo. You and I could do better. For me, I just don’t want to be a famous billionaire with movie star girlfriends!

 

[PhaseWhite]

One concern that the interview highlights for me is that Elon would rather personally "take over" the Model 3 production, than to hold the people nominally in that production job accountable. Doesn't he have the skill to hire the right production manager, and then to support and manage that person/team? Seems like a management failure. Managing people is hard. But you can't grow an organization into one capable of what Tesla needs to be without being willing and able to hire successfully and manage through others.

Agree,
The problem is Elon does not scale. He needs to be able to delegate so that things run smoothly when he's not sleeping next to the problem. Likewise Tesla in general seems to have the same issues with wanting to do too many things by themselves. They need to focus on a few things, not a lot. They took their eyes off the ball on battery packaging assembly and it is costing them hundreds of millions and has contributed to billions in lost market cap.

Elon needs to hire a rockstar Chief Operations Officer.

 

[David29]

Unfortunately, it sounds a bit lame to say that Tesla put too much technology into the Model 3, because he said the same thing about Model X and said he would not repeat the mistake. (And frankly, Model 3 does not seem as complex as Model X, although perhaps there is new technology that is less obvious than that of Model X in the battery or drive train.)

 

[David29]

It’s stunning to me that people criticize someone as successful as Elon, knowing far less about the problem space, having put in less thought and probably not having achieved 1% of what he has.

Valid point.

 

[Electroman]

Unfortunately, it sounds a bit lame to say that Tesla put too much technology into the Model 3, because he said the same thing about Model X and said he would not repeat the mistake. (And frankly, Model 3 does not seem as complex as Model X, although perhaps there is new technology that is less obvious than that of Model X in the battery or drive train.)

I am pretty sure what he meant to say or implied : too much technology in the process and systems of producing Model 3 (and not in the car itself).

 

[Brando]

"incredibly shortsighted?" You are damn right! there are many such instances of him trying to re-invent the wheel has cost a ton of money.

• He was shortsighted to have started a car company in the first place, when the experts all knew that no new car company in the US has survived the last 100 years, so we all knew it is impossible

• He was shortsighted to have started an electric car company, when the experts like Toyota and GM knew that Hybrid is the way to go. Battery technology is simply not there to get even 200 mile range. Even better Hydrogen is the answer. The experts in Toyota told us time and again.

• Starting a car factory in California? How shortsighted can that be? there is a reason all car manufacturing in the US is done around Detroit or in places where labor is cheap.

• He was incredibly shortsighted to have gone with cylindrical commodity cells, when the industry was going after pouch cells specifically made for automobiles. You all know the results of that - terrible battery degradation in Tesla cars

• He was terribly shortsighted not to go for the tried and trusted and proven customer-friendly dealership model.

• He was insanely shortsighted to start a rocket company. I mean how stupid can that be?. We all know that only governments and big aerospace companies can launch rockets. Just think about it - what experience does he have launching rockets? [AmpedRealtor would have 100% made this comment with glee in the early years, when his first three launches were failures.]

• Landing rockets? really? is Musk insane? NASA has not done it. Russians have not done it. Euro agency? ULA? not a chance. It only means one thing - IT CANNOT BE DONE. You cannot land rockets. How incredibly shortsighted for Musk to spend his engineering resources on this.

• And oh the Gigafactory? What kind of shortsighted idiot builds their own huge factory to make batteries, when automobile giants knew fully well that it is always best to outsource battery manufacturing to 3rd parties. There is no way battery costs are going to come down to less than $200/kWh for another two decades. The experts told us. They are right. Musk is wrong.

You are damn right. Musk's shortsightedness has cost Tesla and SpaceX a lot of money. He should not have even started these companies in the first place. Then they would not have lost any money.

Right on. And how short sighted is a glass roof? Batteries for utility scale storage. Clearly insane. He really is Boring. And next thing you'll know he'll try to create a vacuum tunnel so he doesn't have to waste money on aero dynamic designs. Almost forgot the world's largest factory just to make tiny batteries that everyone else already makes, even the Chinese. And using that horribly rare and toxic salt - what is it called, Lithium? And he is an immigrant. How'd he get over that Trump wall thing?

 

[Brando]

You'd think after more than 15 years he'd just give up. You know, learn from Fisker and Lutz. Perhaps that is a little too inside of a joke.

 

[sakimano]

Shortsighted???

Getting us off petroleum products is INCREDIBLY *LONG* in vision.

It's the short-sighted short-sellers who want "more of the same" that other car companies produce.

I've been listening to how awful Elon Musk is since before the Model S hit the streets. The Naysayers are like Bible Doom Prophets - always moving their End of Times date.

Name me ONE person who has the list of accomplishments that Musk has. There's a reason why he's always late in delivering on his promises. It's hard to make an accurate schedule for things that have never been done before.

Let's Focus on the facts instead of painting short sellers as villains.

The short sellers DO NOT care about e-cars vs fossil cars. They're not shorting the stock because they hate progress lol. They also aren't hurting tesla or slowing them down in any way by shorting the stock. They're making a bet against tesla stock price by selling at 300 bucks a share today and hoping to buy it back cheaper in the future. Simple.

We saw this with tech companies in the late 90s-early 2000s. Microsoft is a good example...It traded at about $58 (split adjusted) and 60x earnings back during the tech bubble. Back then people vilified Warren Buffett for saying he didn't think it was worth its share price. "WARREN IS A DINOSAUR! " they cried. He couldn't see the future!, and "traditional valuations and fundamentals don't matter for these new era businesses." Sound familiar?

Microsoft was and is a great company, and has executed on their business plan for the 18 years since...growing revenue and earnings at an incredible pace and making tens of billions hand over fist for that time period.

Still, that doesn't mean it was a good buy in 2000.

Despite growing the company to be a cash making monster the stock was still up 0% from those 2000 highs to mid 2016, a period of 16 years. Tech bubble era buyers weren't rewarded because they paid too much. It's a tough investment thesis to make sense of. "I think this company I'm paying 60x earnings for is going to 80x earnings ".

There's certainly a great story there with tesla but if we focus on the car business, the stock today at 50 billion dollars like a super successful, profitable car maker selling a couple million cars very profitably. When will that happen? 7 years? 10 years from now? Buying at $300 sure has a lot of things that need to go right for along time before it is fairly priced in the context of a mature luxury car maker (audi, MB and BM all sell about 2 million cars a year)

Anyway you can debate the stock price from both sides but don't paint short sellers as trying to stop progress or being anti musk. They're just trying to make money for their clients. Sure some are outspoken doomsayers but they represent a fraction of the short interest (just as the "Elon is a God who can do no wrong" devotees are a fraction of the long interest and don't represent all shareholders...Because they look like crazy people)

 

[SO16]

Let's Focus on the facts instead of painting short sellers as villains.

The short sellers DO NOT care about e-cars vs fossil cars. They're not shorting the stock because they hate progress lol. They also aren't hurting tesla or slowing them down in any way by shorting the stock. They're making a bet against tesla stock price by selling at 300 bucks a share today and hoping to buy it back cheaper in the future. Simple.

We saw this with tech companies in the late 90s-early 2000s. Microsoft is a good example...It traded at about $58 (split adjusted) and 60x earnings back during the tech bubble. Back then people vilified Warren Buffett for saying he didn't think it was worth its share price. "WARREN IS A DINOSAUR! " they cried. He couldn't see the future!, and "traditional valuations and fundamentals don't matter for these new era businesses." Sound familiar?

Microsoft was and is a great company, and has executed on their business plan for the 18 years since...growing revenue and earnings at an incredible pace and making tens of billions hand over fist for that time period.

Still, that doesn't mean it was a good buy in 2000.

Despite growing the company to be a cash making monster the stock was still up 0% from those 2000 highs to mid 2016, a period of 16 years. Tech bubble era buyers weren't rewarded because they paid too much. It's a tough investment thesis to make sense of. "I think this company I'm paying 60x earnings for is going to 80x earnings ".

There's certainly a great story there with tesla but if we focus on the car business, the stock today at 50 billion dollars like a super successful, profitable car maker selling a couple million cars very profitably. When will that happen? 7 years? 10 years from now? Buying at $300 sure has a lot of things that need to go right for along time before it is fairly priced in the context of a mature luxury car maker (audi, MB and BM all sell about 2 million cars a year)

Anyway you can debate the stock price from both sides but don't paint short sellers as trying to stop progress or being anti musk. They're just trying to make money for their clients. Sure some are outspoken doomsayers but they represent a fraction of the short interest (just as the "Elon is a God who can do no wrong" devotees are a fraction of the long interest and don't represent all shareholders...Because they look like crazy people)

I don’t have a problem with short sellers until they are on news programs slamming the stock with false narratives. Like Chanos.

 

[sakimano]

I don’t have a problem with short sellers until they are on news programs slamming the stock with false narratives. Like Chanos.

What's a false narrative to you? Someone's opinion that you don't agree with? He has his investment thesis and he justifies it with his research and his opinion honed by 30+ years managing money. Then he puts his (and his clients') money where his mouth is.

I don't see what's wrong with that. Let him be wrong if he's wrong. If CNBC wants to hear someone argue the other side of being long tesla what's wrong with that?

What's your thesis that would support being a tesla Shareholder? What's the business case that makes $300 a share a valid entry point today and proves his narrative is false?

 

[SageBrush]

Unfortunately, it sounds a bit lame to say that Tesla put too much technology into the Model 3, because he said the same thing about Model X and said he would not repeat the mistake. (And frankly, Model 3 does not seem as complex as Model X, although perhaps there is new technology that is less obvious than that of Model X in the battery or drive train.)

He may have been talking about the production line

 

[SO16]

What's a false narrative to you? Someone's opinion that you don't agree with? He has his investment thesis and he justifies it with his research and his opinion honed by 30+ years managing money. Then he puts his (and his clients') money where his mouth is.

I don't see what's wrong with that. Let him be wrong if he's wrong. If CNBC wants to hear someone argue the other side of being long tesla what's wrong with that?

What's your thesis that would support being a tesla Shareholder? What's the business case that makes $300 a share a valid entry point today and proves his narrative is false?

Jim Chanos: We think Tesla is worth zero


Who said $300 a share is a valid entry point? I didn’t. Even the CEO of Tesla said they are overvalued.

 

[sakimano]

Jim Chanos: We think Tesla is worth zero


Who said $300 a share is a valid entry point? I didn’t. Even the CEO of Tesla said they are overvalued.

Just trying to understand how a guy sharing his investment opinion is a 'false narrative'?

 

[SO16]

Just trying to understand how a guy sharing his investment opinion is a 'false narrative'?

Do you honestly think he believes Tesla is worth zero? Sure sounds catchy though and helps his position if people believe him.

 

[Xcelerator]

One concern that the interview highlights for me is that Elon would rather personally "take over" the Model 3 production, than to hold the people nominally in that production job accountable. Doesn't he have the skill to hire the right production manager, and then to support and manage that person/team? Seems like a management failure. Managing people is hard. But you can't grow an organization into one capable of what Tesla needs to be without being willing and able to hire successfully and manage through others.

In a traditional company you'd be right. However, not one single thing about Tesla is traditional. He sees the path to solving production issues as technological in nature. He is a technologist, one of the most skilled and forward thinking of our time. So, what manager is it that you think could manage his way out of a technology issue? Yes, he needs to hire lots of people and it is disconcerting when high profile folks leave. However, I can't think of anyone anywhere who is more qualified to solve a technology issue that him, can you?

 

[Xcelerator]

Musk should not be given credit for seeing a path out of hell, he is the one who put them on the path to hell in the first place by being incredibly shortsighted. He chose to re-invent the wheel rather than using tried-and-true manufacturing methods that work. This "path out of hell" is not coming for free, all of these mistakes are costing Tesla money. Any other CEO would have been canned a long time ago. Musk's "vision" is just as much an albatross as it is blessing.

Let's get this straight: Musk is piss poor CEO.

So you want someone to create all new, visionary, game changing products by doing it the old ways that have always been followed. So, in your view, the best way revolutionize things is to keep doing them as they have always been done.

 

[Rob R]

"incredibly shortsighted?" You are damn right! there are many such instances of him trying to re-invent the wheel has cost a ton of money.

• He was shortsighted to have started a car company in the first place, when the experts all knew that no new car company in the US has survived the last 100 years, so we all knew it is impossible

• He was shortsighted to have started an electric car company, when the experts like Toyota and GM knew that Hybrid is the way to go. Battery technology is simply not there to get even 200 mile range. Even better Hydrogen is the answer. The experts in Toyota told us time and again.

• Starting a car factory in California? How shortsighted can that be? there is a reason all car manufacturing in the US is done around Detroit or in places where labor is cheap.

• He was incredibly shortsighted to have gone with cylindrical commodity cells, when the industry was going after pouch cells specifically made for automobiles. You all know the results of that - terrible battery degradation in Tesla cars

• He was terribly shortsighted not to go for the tried and trusted and proven customer-friendly dealership model.

• He was insanely shortsighted to start a rocket company. I mean how stupid can that be?. We all know that only governments and big aerospace companies can launch rockets. Just think about it - what experience does he have launching rockets? [AmpedRealtor would have 100% made this comment with glee in the early years, when his first three launches were failures.]

• Landing rockets? really? is Musk insane? NASA has not done it. Russians have not done it. Euro agency? ULA? not a chance. It only means one thing - IT CANNOT BE DONE. You cannot land rockets. How incredibly shortsighted for Musk to spend his engineering resources on this.

• And oh the Gigafactory? What kind of shortsighted idiot builds their own huge factory to make batteries, when automobile giants knew fully well that it is always best to outsource battery manufacturing to 3rd parties. There is no way battery costs are going to come down to less than $200/kWh for another two decades. The experts told us. They are right. Musk is wrong.

You are damn right. Musk's shortsightedness has cost Tesla and SpaceX a lot of money. He should not have even started these companies in the first place. Then they would not have lost any money.

 

[Rob R]

Granted all that, but this "Genius Boy" (high school nickname) cannot even figure out that if you put two of those couches together front to front, you get a perfectly serviceable width bed to sleep on.

Yeah thanks Elon, and yes, $1million would certainly be enough. I'm not in it for the money either.

 

[SO16]

Granted all that, but this "Genius Boy" (high school nickname) cannot even figure out that if you put two of those couches together front to front, you get a perfectly serviceable width bed to sleep on.

Yeah thanks Elon, and yes, $1million would certainly be enough. I'm not in it for the money either.

Where is the second couch?