March 15, 2018

ELECTRIC LEMONS: Tesla employees say automaker is churning out a high volume of flawed parts requiring costly rework.

Tesla’s future as a mass-market carmaker hinges on efficient, automated production of the Model 3, which more than 400,000 people have already reserved, paying $1,000 refundable fees to do so. Musk said in July 2017 that Tesla would probably be making 20,000 Model 3s per month by December.

The company then later downgraded those expectations. It currently says it will make 2,500 per week by the end of this month and 5,000 per week by the end of June.

One current Tesla engineer estimated that 40 percent of the parts made or received at its Fremont factory require rework. The need for reviews of parts coming off the line, and rework, has contributed to Model 3 delays, the engineer said.

Another current employee from Tesla’s Fremont factory said the company’s defect rate is so high that it’s hard to hit production targets. Inability to hit the numbers is in turn hurting employee morale.

Not good — especially given that established automakers with centuries of cumulative experience in mass manufacturing are getting serious about electric vehicles.

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