Is This The Bizarre Reason Why Tesla Is Struggling To Ramp Model 3 Production?

Tyler Durden's picture

A little over a week ago, we noted the damning – if unsurprising – report from the Wall Street Journal revealing that Tesla's massive production miss on the Model 3, after only producing a tiny fraction of the 1,500 Model 3 sedans that it promised customers, might have been attributable to the fact that key parts of the cars were still being assembled by hand.

But according to a new report from the WSJ and Automotive News this morning, the real problem with Tesla's Model 3 production might be even more basic and embarrassing...the company can't figure out how to weld steel.

What's behind Tesla's manufacturing woes? It could be something as simple as steel.


Based on details in a Wall Street Journal report and in a video of the production line posted on Twitter by Tesla CEO Elon Musk, experts say the electric vehicle maker appears to be struggling with welding together a mostly steel vehicle, as opposed to the primarily aluminum bodies of the Model S and Model X.


The Model 3's aluminum and steel body requires more welding rather than the adhesive and rivets in aluminum bodies, experts say.


Harbour described the difference between the body of the Model 3 and those of the Model S and Model X as "partly cloudy vs. partly sunny." The change in materials would require processes new to Tesla.


"There's a big difference there. They haven't been doing a lot of spot welding on the first two vehicles because they're all aluminum," Harbour said. "The learning curve is pretty steep."

As automotive manufacturing consultant Michael Tracy of Agile Group pointed out, the clues of Tesla's steel problems came from a video posted by Musk himself of the Model 3 assembly line.  Referencing Musk's video, Tracy said a well functioning auto assembly line would not produce the sparks seen in the video below which are symptomatic of welds spots overheating or poor alignment of components.

After the Journal report, Musk tweeted a of the Model 3 production line, which was operating at one-tenth of its potential speed. In the video, sparks fly as two robotic arms assemble parts of the vehicle frame. He followed with another on Wednesday, Oct. 11, showing body panel stamping at full speed.


"Resistance welding should make a little smoke, but when you see stuff popping out like that, that's called expulsion," automotive manufacturing consultant Michael Tracy of Agile Group in Howell, Mich., said of the first video. "It's symptomatic of weld spots getting too hot because they're poorly planned, or in this case, the metal not being pulled all the way together."


Poor welds can increase the damage to a vehicle in an accident, and can lead to rattling and squeaking as the car ages, Tracy said.

A post shared by Elon Musk (@elonmusk) on Oct 8, 2017 at 3:20pm PDT


Meanwhile, Tracy says that mistakes like these are things that most auto OEMs would catch and fix 6 months before production launch...which raises the question "is the expertise there?"

Tracy said slowed assembly lines do little to prove production is running smoothly because lines perform differently when running at full speed.


"At this point, you would only be running it slow if you were having troubles and you were afraid the welds you were going to make weren't going to be good," Tracy said. "It has to be able to run at rate for acceptance testing."


The types of problems Tesla is dealing with are normally worked out long before the assembly line is expected to be working at capacity, Harbour said.


"This is something a plant typically goes through four to six months in advance of a production launch," Harbour said. "This raises the question: 'Is the expertise there?'"

Of course, as we've pointed out multiple times of late (see: Porsche And Mercedes Plot Musk Offensive With "Anything Tesla Can Do, We Can Do Better" Strategy), Tesla has historically been somewhat shielded from the negative financial consequences of their manufacturing inefficiencies because they've been the only EV game in town...but that's all about to change in a big way.

With an influx of competitive EVs on the horizon, Tesla must iron out its manufacturing problems in the next few months or risk losing its competitive edge before the Model 3 reaches a larger audience.


"Before, there was only Tesla. Now, there's going to be dozens of alternatives," said Ron Harbour, a manufacturing consultant at Oliver Wyman. "They're going to have to get really efficient at manufacturing. They have to be cost competitive and price competitive to stay in the business."


Since July, automakers have been one-upping each other on plans to electrify their lineups. Volvo said it would introduce only electrified vehicles starting in 2019. Jaguar Land Rover said it would offer electrified versions of all of its vehicles by 2020. BMW expects to be able to mass-produce EVs by 2020, offering 12 models by 2025. Mercedes said it will electrify its lineup by 2022.


Detroit also has been turning its attention to electrification. Ford Motor Co. plans to introduce 13 electrified vehicles in the next five years, including a crossover with 300 miles of range. General Motors introduced the Chevrolet Bolt last year, with at least 20 all-electric or hydrogen fuel cell vehicles coming by 2023 — two such vehicles will be introduced in the next 18 months.

Perhaps this is why Daimler's CEO didn't seem to be all that worried about having a manufacturing competition with Tesla?

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tmosley's picture

>the company can't figure out how to weld steel

Fucked by Kobe?

Laowei Gweilo's picture

never understood the celebration of Tesla woes here...

Musk doesn't give two shits about the environment: he makes electric cars because he's a capitalist, futurist and industrialist -- one of the few new ones the US has left.

you prefer your current GM/etc overlords? god forbid someone tries to make something in the U.S. still, even if they have a learning curve -_-

and FYI i'll never fucking drive an electric car... want a gas guzzling beast. don't invest in Tesla either. not even American. but every time I hear people here complain about Made in China, Made in Mexico, no one invents or builds anything in the U.S. anymore -- and yet when Musk does it, he's criticized because he takes subsididies?

i mean... good luck starting a new automobile company in the U.S. WITHOUT liberal subsididies o.0 

Stuck on Zero's picture

Could be they switched from resistance welding to friction welding.

auricle's picture

It's all done by robots, just plug in the steel welding program. 

jcaz's picture

Pretty simple, really-  the engineers that could fix this problem have long since departed, and now he has a bunch of $15/hr assemblers trying to figure out how to melt steel.   Autonomous driving?  Who cares when your car can't back out of the garage?

It's not the big problems that sink a company- it's the little problems.

Musk is arrogant about basic processess- for all the fluffy dreams,  it's the people in the trenches who ultimately make the car go.   Welding steel is hard and dirty-  Musk doesn't want to get dirty.

Article is dead-right about welding steel, tho-  if they don't know what they're doing, the welds in those cars will be temporary-  the metal will fatigue and the car will turn into a 1969 Nova in a couple years.

Makes me wonder WTF Tesla is selling here, tho-  steel in place of aluminum?   Isn't the ENTIRE point of this company to expand the boundries of manufacturing?   Slapping some self-driving software on a 1990 Geo doesn't feel right.....

Moe Hamhead's picture

The engineers that left are going to night school, ...learning how to speak German!

glenlloyd's picture

Could be that we don't like EV's and wouldn't drive one if that's all there was to drive.

Further, the only reason that his business model is even remotely possible is because the government subsidizes production with incentives. Remember, if you can, that incentives warp the pricing structure of the thing they're trying to incentivize and they're a huge waste of tax payer money.

If these things are any good they'd be able to stand on their own two feet and not be propped up with govt money.

Elon can fuck off.

fx's picture

The thing is, even wit all the government subsidies, with all the money scammed from gullible investors and even with all the government's attempts to force people into buying EVs, Tesla still cannot stand on its own feet.

fx's picture

Musk is NO entrepreneur and he is NO capitalist. He is a greedy, selfish crook that shamelessly copies other people's ideas without ever giving them due credit. He is a scam artist and snake oil salesman that takes corrupt politicians (looking at you, Cuomo, among others) and delusional "investors" for a big wild ride. When all is said and done, Tesla will be bk, investors will have lost a gazillion $ and Musk will walk away as multi-billionaire and pursue the next scam, e.g. boring tunnels, hyperloop ninsense, colonzing mars, arranging intercontinental flights for humans in rockets, neuralink or any other idiotic venture that sounds fancy enough to rip people off again.

not dead yet's picture

In the early 1900's most of the car companies, and there were lots of them, were only in business for a year or two and closed up shop. Pundits claim it was due to losing money. Not. The vast majority of those companies were huge money makers as the rich buyers shelled out the bucks to get their hands on the latest toy. Even back then parts were readily available so these companies were set up as short term enterprises to make a quick buck then liquidate. Musk is given undeserved credit for many things and is an innovator in one respect. He can sell in demand toys to rich boys with fat wallets and underprice his wares and lose huge money in the process.

The US was the number one manufacturer in the world until surpassed by China in 2010. We are a soid #2. It's ignorant people conning other ignorant people that the US doesn't manufacture anything. Any dumb as that thinks we don't manufacture anything needs to get away from their keyboard and hit the road. Seeing is believing. Over 12 million people are employed in manufacturing in the US and there are over a quarter million manufacturers. As far as the auto industry there are around 50 assembly plants in the US.

If you need a subsidy, a handout, to be in business you shouldn't be in business. Tax breaks against future taxes to locate a plant locally, which most  manufacturers get, is not a subsidy but an investment that puts tax paying locals to work and creates lots of other tax paying jobs in the community. Musk was awarded over a billion in tax breaks for locating his battery factory in Nevada. He must not be planning on making any money for a long time, besides being desperate, because he is selling some of those tax breaks, even though he isn't paying any taxes, like he did to casino outfit MGM Grand. It's legal too.


Nameshavebeenchangedtoprotecttheinnocent's picture

Ummm No. All of those early car companies closed because they were indeed losing money. Nobody is going to go thru the massive hassle & expense of setting up a car factory, just to liquidate a couple years later.

Some of them may have made money at first, but then quickly went into the red as cars commoditized and especially into the teens as Henry Ford drove down costs with his assembly lines.

It's the same reason many of the early computer companies are now long gone.

Kidbuck's picture

Capitalists don't steal my fucking money to subsidize their businesses. Thieves with friends in Congress do.

KimAsa's picture

Elon Musk's personal net worth is $40 billion. I believe the portion of that cash belongs to US lax payers and should be given back, and another portion belongs to investors.

I don't care if it's a welding problem or some other problem, he can't seem to meet production quotas - that is the problem.

Tesla's earnings are based completely on carbon credits and not actual sales - that is not capitalism. Not even close. It's corporate welfare.

aurum4040's picture

I call bullshit on this. Not that i believe tesla isnt going to have serious competition and additional debt problems. But come on. Spot welding ignorance? Thats one hell of an extrapolation from one video of a relatively simple task. I just dont buy it. Goal seeked analysis. 

Oliver Klozoff's picture

"Spot welding ignorance?"


I remember a conversation I once had with a fellow that went to SK to fix a problem with the producer of cars his company was marketing, they were literally falling apart. This was an established SK company.

Turns out the plant manager figured he could save money by not performing 100% of the welds on the daytime shift because the electricity cost more during the day.

evokanivo's picture

i hope this is a fucking joke. that takes the cake for sure.

Oblio's Arrow's picture

guy gets in a terrible accident and has to have a leg amputated. doctor removes wrong leg, has to go back and remove the other one. legless files law suit. it was determined he didn't have a leg to stand on.

So Close's picture

Can land a rocket booster back at the pad but can't figure this one out?  Doubt it.

yarpos's picture

Clearly,  I mean its almost the same skill set isnt it?

fx's picture

Musk has three core competencies: extracting money from taxpayers and delusional "investors", bullshitting people 24/7 and stealing ideas and concepts from other people.

He has done tons of engineering blunders and burns through other people's money without any hesitation. Yeah, but landing rockets on a pad or on mars...

Give me a break! This guy is one of the biggest crooks alive.

buttmusk's picture

time for musk to fire off a few more rockets or give us production estimates for cars on mars in 2050

Blue Steel 309's picture

They are massaging the wrong kind of beer into the steel?

holdbuysell's picture

Have they crash tested this seemingly bespoke 'made-by-hand' vehicle?

Who bought Model 3's so far?

jmack's picture

  you are missing it tyler:



“We have done great good in the world. That leadership has had its costs, but we have become incomparably powerful and wealthy as we did,” McCain said.


  not often that one of these brain diseased fucks self indicts.


SoDamnMad's picture

I KNOW you wanted to put this line in.

“We live in a land made of ideals, not blood and soil,” McCain said. “We have a moral obligation to continue in our just cause, and we would bring more than shame on ourselves if we don’t. We will not thrive in a world where our leadership and ideals are absent. We wouldn’t deserve to.”

Let it Go's picture

The article above indicates Musk needs to come up with a new scheme to take are minds off of this. Elon Musk's enormous success at PayPal moved Musk into the spotlight making him an icon never far from generating headlines. We can always count on Elon Musk to find some new way to get on the front page of the news and razzle-dazzle us on any given day with some bold project.

 It should be noted that Musk appears Teflon coated and he has suffered little fallout from promises and deadlines unkept, failure simply does not stick but seems to run off his back. The article below delves into his many projects and the hype surrounding him as he keeps a great many balls in the air.

 Musk Continues To Dish Out The Old Razzle-Dazzle

Iskiab's picture

Not only that but there’ll be spillover from pulling out of the Paris accords. I’d expect most outside the US to prefer a European manufacturer over a US one.

not dead yet's picture

Just as Musk did NOT start Tesla he did not invent PayPal. The guys that did invent it bought a startup Musk had which brought him onboard with lots of stock. Eventually they figured the Musk startup was a POS and shut it down and eventually fired Musk while he was on vacation.

man from glad's picture

Are Model 3 owners going to start finding Coke bottles in the doors now?

Lumberjack's picture

I know these are spotwelding robots and the sparks seem about right.

However, It looks like the bots smoked some weed and were slowed up a bit. Two guys could have welded that 3 times as fast. WtF?

Blue Steel 309's picture

Executives should not have to be exposed to humans. So they need their middle managers to not exist as well.

haruspicio's picture

Another day, another Tesla bashing. Give it a rest ZH. You have no insider information about how this company will do long term.

yarpos's picture

you dont need insider information,  look at the numbers   PE ratio of negative infinity

Kidbuck's picture

Any company that needs govt subsidies to survive has already failed as a company and is only operating now and forever as a fucking thief.

massbytes's picture

They are just a bunch of whiney, little foreign trolls.  With their little pet theories and insults.  Meanwhile in the real world, Musk is helping out Puerto Rico with solar and batteries, and will announce a semi-truck before the end of the year.  Then the whining will probably go up a notch.  

Atomizer's picture

Elon Musk hasn't figured out to make a longer exention cord. This dipshit is trying to pass more taxpayer financed monetary gain to build his charging service stations. Elon, fund your own money on Route 66.

Length: 2,451 miIles 

Elon, you have no infrastructure to support your car. A liberal runabout. 

Bumpstock's picture

I remember when the Tesla Store opened up a few miles from us and I went in out of curiousity and also because my lease was going to be up in 3 months. I was really impressed, and pretty interested, but when I asked about financing, and specifically leasing I got cold feet. US Bank was doing their financing, but no one, not US Bank, Wells Fargo, Ally, etc. was willing to offer any leasing. I know oem's will sometimes "guarantee a residual"-- I have seen it happen--- to get the product out there. Taht Tesla did not do this spoke to the fact that there was such strong demand for their cars just based on hype rather than history, or to the fact that Tesla knew guaranteeing the residual value of their cars could be a very risky undertaking. This was about 3 years ago.

Anopheles's picture

Tesla did have a guaranteed buyback but they cancelled it.  They were losing billions because the used value was far lower than their estimated guaranteed price. Hi

Atomizer's picture

Elon Musk hasn't figured out to make a longer exention cord. This dipshit is trying to pass more taxpayer financed monetary gain to build his charging service stations. Elon, fund your own money on Route 66.

Length: 2,451 miIles 

Elon, you have no infrastructure to support your car. A liberal runabout. 

roddy6667's picture

Spot welding is such cutting edge technology that it is understandable that there are some glitches on the way.


Bobportlandor's picture

Glade you said it before me because I wasn't going to be so kind.


Shut the place down.

Atomizer's picture

Thankfully, Telsa didn't turn into a Fisker car that didn't self ignite into a ..

DOT Bans All Samsung Galaxy Note7 Phonesfrom Airplanes | US Department of Transportation

Those were some good hot batteries to hedge on US Stock Exchange for fraud. 

Atomizer's picture

The beauty of browser crash. I'm still here bitch! 


Atomizer's picture

Try crashing me again. So I can make you feel defeated. Worthless piece of shit that needs to join the Girl scouts and sell cookies. 

TheEndIsNear's picture

Who or what the hell are you talking to?

Atomizer's picture

I guess you're mentally challenged. Gray bar is post. Blue bar is reply. It even tells you what gray bar post that your replying to. 

Apparently, you need government assistance to help you post on Internet. 


Atomizer's picture

C'mon fuckstick. Try again. Hahahaha 

bitplayer's picture

Elon! Take me away!