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Tesla’s ambitious Model 3 plan relies on a risky manufacturing technology

Published Apr 24th, 2017 11:06PM EDT
Tesla Model 3 production date, price
Image: Tesla

It’s crunch time for Tesla. Ever since announcing its ambitious plan to deliver hundreds of thousands of Model 3 cars faster than analysts said was possible, Tesla’s stock has been marching upwards. With the delivery date for the first Model 3 just months away, the world is still trying to work out how Tesla is going to scale up to build so many cars so fast and so cheap.

A new report from Reuters sheds some light on a manufacturing technique that Tesla is employing to cut costs and speed up delivery time. Normally, car manufacturers have a “beta” production phase, in which they will use cheap prototype tooling to build a small run of cars. Using prototype tooling allows the plant to work out any issues or bugs in the assembly line before ordering the final, more expensive tooling for the main production run.

Tesla is skipping that step, and relying on “advanced analytical techniques” (read: computer modelling) to test out the assembly line instead. In theory, that should be cheaper and faster than conventional prototyping, but it raises a number of potential problems. Tesla has already struggled to produce cars with consistent tolerances and free of errors; the Model X is becoming infamous for a number of quality-control issues. Worse, if a production-critical issue appears after the tooling has been made and the line starts running, fixing it will delay production for longer than it would in the beta stage.

Tesla is not the first company to try using computer modeling instead of prototype manufacturing. As Reuters notes, Audi previously used the technique in a factory in Mexico, resulting in a 30 percent time saving in setting up the production line.

For Tesla, the move is another big gamble for a company that’s becoming famous for not playing by the rules. If it works out, it’ll be another example of Musk revolutionizing an old and uptight industry. If it fails, don’t expect much sympathy.