Jul 26, 2020 - Economy

Elon Musk's car-making agony is over

Shaking hand with robot

Illustration: Sarah Grillo/Axios

Two years ago, Elon Musk was lamenting that Tesla was mired in "production hell." Now, he's singing a different tune.

"I just want to be clear, at Tesla, we love manufacturing. It's awesome, and I really think more smart people should be working on manufacturing."

Why it matters: Musk's about-face comes as Tesla is stomping on the accelerator to meet global demand for its electric vehicles, adding production capacity on three continents.

"Just think about the next 12 to 18 months. We'll have three new factories in place. ... There's so much to be excited about," Musk told investors on Wednesday's earnings call.

Flashback: Musk once vowed Tesla's super-automated factories would resemble an "alien dreadnought."

  • He even bragged to industry analysts in early 2018 that Tesla would school Toyota on lean manufacturing, but later admitted to overreaching on factory automation and production targets for its Model 3.

Now, Tesla's manufacturing seems to be on track — and getting better.

  • The company managed to produce more than 82,000 vehicles in the second quarter, despite a six-week shutdown of its Fremont, California, factory due to the coronavirus.
  • Tesla rapidly ramped up production of Model 3 in China, where it learned lessons about how to redesign the underpinnings of the Model Y to make it even easier to manufacture at its next plant, in Germany.
  • "We're getting way better at making cars," Musk said, and lauding manufacturing engineering as an exciting profession with a bad rap.

Yes, but: Tesla is still dogged by quality problems, and its cars lag behind other U.S. auto brands in J.D. Power's 2020 Initial Quality Survey of issues reported in the first three months of ownership.

  • Common problems include paint imperfections and poorly fitting body panels, according to J.D. Power.

The bottom line: Tesla's long-term competitive advantage won't be its cars, but its efficient manufacturing techniques, says Musk.

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