OnInnovation Interview: Elon Musk

Tesla Motors just posted its biggest quarterly loss ever, with the car company revealing on its Wednesday earnings call with investors that it had lost $675 million. The losses are in part the result of the now notorious production problems for the Tesla Model 3.

So perhaps it makes sense that CEO Elon Musk would take time to find the silver lining in that particular storm cloud, saying the current method has restored his faith in humanity.

The first question on the call asked Musk and the Tesla team to explain just what is going with Model 3 production at the company’s Gigafactory in Nevada, and where the company is on its path to produced first 2,500 and then 5,000 Model 3s every week.

Musk said making the battery modules was the real limiting factor for scaling up production, and that Tesla had had to reinvent many of its existing processes. As he revealed, full automation didn’t actually work as well as something that still relied on the human touch.

“We have what we call a semi-automatic line, which is a series of small automated stations manned by people and they’ve actually been remarkably effective,” Musk said on the call. “It has to some degree renewed my faith in humanity that the rapid evolution of progress and the ability of people to adapt rapidly is quite remarkable.”

Chief technical officer J.B. Straubel added that the machines in these semi-automatic lines perform many of the actual operations, but people move the materials between the machines. It’s turned out to be more efficient than what the machines alone could manage, according to Musk.

“Our semi-automatic – our sort of semi-manual, semi-automatic line is exceeding all three of the automatic lines right now,” he said. “And that is something that we’re able to scale quite rapidly.”

Musk left it ambiguous whether the scaling of these semi-automatic lines would be enough to reach the company’s long-promised weekly production targets for the Model 3, or if these would be more of a stopgap measure before the company is in a position to move to full automation. Either way, even a longstanding proponent of automation like Musk has seen the value of the occasional human touch.