23 October 2017

Monday Note: “Tesla’s New Car Smell”

My first serious doubts about Tesla didn’t stem from missed schedules, I’ve been guilty of too many of these, they’re part of tech life. What seriously worried me was a July 2016 visit to Tesla’s manufacturing plant in Fremont, California. In taking delivery of my wife’s Model S, we were treated to a group tour of the site. Everyone marveled at the robot porn, at the activity on the assembly line, at the endless stores of spare parts piled to the ceiling.

Everyone but yours truly.

I couldn’t help check off the sins against the “Toyota Bible”, prescriptions for car manufacturers that are lucidly detailed in The Machine That Changed The World (a great and, in parts, sad read). In particular, one mustn’t stockpile parts on the floor, they must be fed in small quantities at small time intervals. If a part has a problem, only a small quantity needs to be shipped back to the supplier who can inspect, correct, and quickly adjust their own production process.

Jean-Louis Gassée

Sounds like the Tesla myth is starting to crack. From random firings to handmade parts in a plant that is supposed to be automated, and now the company has missed production goals for the Model 3 – by a lot! Somebody in their management team should really look up ‘Lean manufacturing’ when they’re not being yelled at by Elon Musk. This doesn’t make me any more confident that Musk’s other high-profile bet, SpaceX, can deliver on their plans for future space launches.

Tesla Model 3 projected production

But perhaps Tesla’s greatest challenge isn’t within the company. It’s the “Mary and Carlos” threat. Mary Bara is GM’s CEO; Carlos Ghosn is the emperor of the Renault-Nissan-Mitsubishi-Avtovaz conglomerate that recently jumped to the #1 position in the auto industry. Both industry chieftains now wield credible competitors to Tesla’s Model 3: the Chevy Bolt and the newer Nissan Leaf. The Bolt is in production, I see it in parking lots around Palo Alto, and the newer Nissan Leaf, promised for early 2018, succeeds the unsung, world’s best-selling electric car, the “older” Leaf introduced in 2010.

Hmm, almost exactly what I wrote on the blog a year and a half ago about the Model 3. For many consumers, a less than perfect product available today matters more than promises about amazing products in an uncertain future. Maybe Musk should learn to stop overpromising what he obviously can’t deliver.

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