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Tesla takes a more traditional route to its new Berlin plant
Posted by Talbot Payne on October 6, 2020
Since the introduction of its groundbreaking Model S sedan in 2012, Tesla has been about industry disruption.
Led by mercurial CEO Elon Musk, the Silicon Valley electric-car maker has taken a clean-sheet approach to everything automotive — from its spare interior designs to its “Ludicrous mode” acceleration to its over-the-air software updates.
But its attempt to remake auto manufacturing in 2018 nearly broke the company.
The year of what Musk called “production hell” at its Fremont, California, plant was a lesson in hubris as Tesla sought to meet demand for its mass-market Model 3 sedan. Vehicles came off the line with sunken hoods, detached bumpers and uneven panel gaps. Some were assembled in parking lot tents. Flawed paint jobs delayed the delivery of thousands of vehicles.
As Tesla embarks on its first major production facility in Europe — building the Model Y compact SUV in Berlin starting next year — experts say the company appears to be adopting traditional production methods and relying less on robots. And it is simplifying the vehicle’s structure.
“Tesla’s got an innovative culture,” said manufacturing expert Sandy Munro, president of Munro & Associates. He has been a vocal critic of Tesla production. “Sometimes, it gets it right. Sometimes, it gets it horribly wrong, as in the case of the (California) plant. So now we’ve got the German plant, and it seems to be learning from its mistakes.”
Riding current consumer and government trends toward electric vehicles, Tesla announced a record 139,300 deliveries in the third quarter, up 24% from its previous record set last December. All of those vehicles were built in California.
Tesla began production of cars in its new Shanghai plant late last year and plans to boost capacity of the plant from 200,000 to 250,000 by the end of the year.
With Asian sales suppressed by the coronavirus crisis, the China plant is at overcapacity, and the automaker is facing increased competition in the electric market in Europe from established carmakers.
Still, Tesla anticipates increased demand for its vehicles globally, with countries like France and England phasing out gas and engines over the next 20 years.
But Tesla’s quality has been an issue even as it has been an innovator in the design of electronics and body construction.
Its electronics and battery systems are “not a generation but generations beyond what any other manufacturer is doing,” said Munro, a 30-year veteran of auto manufacturing and one of the industry’s most respected consultants.
And the manufacturing process?
“It’s crap,” he said of Fremont assembly’s attempt to automate assembly three years ago. “It was a terrible, terrible philosophy. Unless you’ve designed your product so that a blind, one-armed idiot — a robot — can put it together.”
Convinced he could make what he termed “alien dreadnought” factories operated mostly by robots, Musk hired Audi executive and automation advocate Peter Hochholdinger in 2016. Tesla made a crucial mistake in automating the factory while the Model 3 was still in prototype development.
David Cole, a veteran analyst and chairman emeritus of Ann Arbor’s Center for Automotive Research, said most manufacturers don’t start production until they’ve finished development. “Tesla, on the other hand, would take prototype tooling into the production line to see what worked. They didn’t figure out their processes before they started volume production.”
For its Berlin plant, Tesla is once again promising transformative change.
But this time, the company is playing to its strengths by designing a simpler product that will then be assembled to German manufacturing standards: Tesla has managed to reduce its front and rear chassis compartments to two castings for the Model Y.
“The current version of Model Y has basically two big high-pressure diecast aluminum castings that are joined, and there’s still a bunch of other bits that are attached,” Musk said in an April podcast. “Later this year we’ll transition to the rear underbody being a single-piece casting that also integrates the rear crash rails.”
The castings essentially make up the front and rear compartments of the car — the rear cargo area and the front trunk where the engine would be located in a gas car.
The advantages of using a single-piece casting are many: It reduces production costs by using fewer parts, which means fewer supplier stampings as well as less labor.
Sam Abuelsamid, principal analyst for Guidehouse Insights, agrees the single castings are an interesting idea but that execution will be key.
“Precision on a part that large could be challenging,” he said, pointing out the difficulties of deformities, for example.
Such manufacturing advances in Tesla’s new Berlin and Chinese plants have industry analysts bullish on Tesla’s future.
“The key takeaway from Tesla’s September investors meeting is its focus from being not just a cutting-edge EV maker — but to also being on the cutting edge of manufacturing,” said iSeeCars executive analyst Karl Brauer. “That focus could translate into a corporate mindset that gives him a long-term competitive advantage over competitors.”
Musk isn’t the first auto executive to learn the lessons of technical overreach. General Motors made similar mistakes under the leadership of Roger Smith in the 1980s. Under pressure from Toyota, Smith envisioned a “lights out” car factory where efficient robots shouldered most work.
In their 1994 book, “Comeback,” authors Paul Ingrassia and Joe White cataloged Tesla-like scenes from GM’s Hamtramck plant: “Instead of easing robots onto the line a few at a time, providing for inevitable debugging problems with redundant equipment, GM bet the entire Hamtramck production system on the proposition that leading-edge automation would work instantaneously.”
Mused Munro: “I guess Elon had to learn his lesson just like Roger Smith.”