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.
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?