Possible precautionary tale for cutting-edge manufacturers

photo credit: Steve Jurvetson/Flickr

Tesla’s been under pressure for some time now. In order to justify huge expenditures, such as their $1.3 billion Gigafactory 1 in Nevada, the company set seemingly manageable goals for production of the Model 3 sedan. The company reduced its target down to 2500 vehicles a week, but has been clocking in at 2000 vehicles. This under delivery has caused jitters for both the company and its investors.

Recently however, some financial analysts pointed at a surprising possible source of the problem: over-automation on the factory line. In particular they called out the attempt to automate final assembly.

Research analysts from financial institution Bernstein analysts stated the following from which we can ponder if the robots are killing Tesla:

"Tesla has tried to hyper-automate final assembly. We believe Tesla has been too ambitious with automation on the Model 3 line. Few have seen it (the plant is off-limits at present), but we know this: Tesla has spent c.2x what a traditional OEM spends per unit on capacity."

"It has ordered huge numbers of Kuka robots. It has not only automated stamping, paint and welding (as most other OEMs do) — it has also tried to automate final assembly (putting parts into the car). It talks of two-level final lines with robots automating parts sequencing. This is where Tesla seems to be facing problems (as well as in welding & battery pack assembly)."

Finally, in a surprising turnaround, Tesla founder Elon Musk stated that yes, perhaps they had over automated:

“Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated.”

twitter musk statement

From a manufacturing perspective, this is a fascinating turn of events. As manufacturing companies look to ramp up their productivity, the Model 3 production line gives a precautionary tale to beware of over-automation.