Along with the release of its third-quarter earnings on Wednesday, electric automaker Tesla released two videos of the assembly processes for its much-hyped Model 3 at its Fremont, California assembly plant, amid news of production “bottlenecks.”
The bad news for anyone who ordered a Model 3 is that Tesla has pushed back its production ramp-up of the Model 3, the electric car that starts at a relatively cheap (by Tesla standards) $35,000. The delay is because of the increased automation in the assembly process, the company announced ahead of its earnings call on Wednesday.
“Bringing this level of automation online is simply challenging in the early stages of the ramp,” the company announced. “We continue to make progress resolving early bottlenecks related to these issues, and there remain no fundamental problems with our supply chain or any of our production processes.”
Tesla said its body shop welding (in addition to battery pack assembly and final vehicle assembly) “demonstrated burst builds of about 500 units per week and are ramping up quickly.”
Tesla also offered this forecast related to when it will hit its predicted production schedule:
While we continue to make significant progress each week in fixing Model 3 bottlenecks, the nature of manufacturing challenges during a ramp such as this makes it difficult to predict exactly how long it will take for all bottlenecks to be cleared or when new ones will appear. Based on what we know now, we currently expect to achieve a production rate of 5,000 Model 3 vehicles per week by late Q1 2018, recognizing that our production growth rate is like a stepped exponential, so there can be large forward jumps from one week to the next. We will provide an update when we announce Q4 production and delivery numbers in the first few days of January. With respect to the timing for producing 10,000 units per week, it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate. That will enable us to make the next generation of automation even better while making our [capital expenditure] spend significantly more efficient.
Demand for Model 3 is not going to be a constraint for quite a long time.
Tesla delivered 222 Model 3 vehicles in the third quarter. By the end of this year, Musk guessed that Tesla could be producing “something like a few thousand [Model 3’s] a week.” By March 2018, it expects to be delivering 5,000 Model 3’s a week — a figure it originally anticipated hitting by December.
In a conference call with investment analysts, Musk blamed a systems integrations subcontractor that “really dropped the ball” at the Nevada Gigafactory where automated robots that produce parts of the Model 3. Without getting too specific, Musk said Tesla had to “rewrite all the software from scratch and redo many of the mechanical and electrical elements.”
The Model 3 production process is vastly more automated than previous Tesla models like the S or the X. Making things more difficult, it’s very hard if not feasible to replace robots with people to make up for machines that don’t work properly.
Here’s a video of the welding process, which as Doug Field, Tesla’s senior VP of engineering, said on the earnings, the welding delays are not “not the same level of constraint as the Gigafactory,” but that “it’s really driven by the sheer number of robots in the body shop. It’s the largest number of robots” in the process. Musk added later, “if you can see the robot moving it’s too slow.”
And here’s a video of its general assembly:
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