Tesla Model 3 Production Reportedly Held Back by Gigafactory Delays

Long before the new Tesla Model 3 began rolling off the assembly line, CEO Elon Musk made it clear that producing its first mass-market vehicle would be a challenge. He even went so far as to say that the first stage would be “production hell.” But while Musk also claimed production would ramp up rapidly, by the end of 2017, Model 3s were still being built at a much lower rate than previously promised. If the latest report is accurate, that’s at least partly because the Gigafactory that we previously toured is having problems meeting battery demand. However, Tesla firmly refutes many of the claims made in the story.

CNBC reports that according to several current and former Tesla employees, battery production issues were significantly worse than had been previously reported. Those problems allegedly included both building some of the batteries by hand and borrowing workers from Panasonic to help out. At the end of Q3, Tesla put some of the blame for lower-than-expected Model 3 production on the Gigafactory but didn’t elaborate on what was specifically causing the delays. If CNBC‘s sources are correct, while the Model 3 factory continues to ramp up production, it will be a while before Tesla can build batteries quickly enough to meet demand.

As the CNBC report explains, humans are well-suited for performing certain automotive-battery-production tasks such as assembling the “clamshell” outer structure that holds the battery pack together. But making sure the lithium-ion cells are perfectly aligned requires the kind of precision that typically favors machines over human hands. One current Gigafactory engineer reportedly told CNBC that at one point, employees were “slapping [the batteries] together as fast as they possibly could,” and that their mistakes resulted in a lot of waste.

CNBC’s sources say that eventually, machine speed increased to the point that Tesla didn’t need to keep Panasonic employees on site anymore and that hand production has generally been phased out. But while that’s a move in the right direction, another engineer said the automated assembly lines still can’t run at full speed. “There’s no redundancy, so when one thing goes wrong, everything shuts down,” the source said. “And what’s really concerning are the quality issues.”

The quality control department is also reportedly made up of inexperienced temp-to-hire workers that were hired through a staffing agency. Several of CNBC‘s sources say these employees miss flaws during inspections, and allege that some Model 3 batteries could short out or even catch on fire as a result.

But while CNBC‘s report sounds pretty bad, a Tesla spokesperson told Motor Trend that the article is misleading. “To be absolutely clear, we are on track with the previous projections for achieving increased Model 3 production rates that we provided earlier this month. As has been well documented, until we reach full production, by definition some elements of the production process will be more manual. This is something Elon and JB discussed extensively on our Q3 earnings call, and it has no impact on the quality or safety of the batteries we’re producing.”

They also said that it shouldn’t necessarily be concerning that some Gigafactory employees do not have backgrounds in engineering or manufacturing due to the training they receive before they start. “New hires on the module line receive extensive training, including safety training, and learn about the importance of proper cell-to-cell spacing so they can identify such issues in the production process. More broadly, battery production – and the module line in particular – is overseen by our top engineering talent, and many of Tesla’s most senior leadership.”

The spokesperson rejected the idea that Tesla would use flawed batteries that pose a fire risk, as well, saying, “the implication that Tesla would ever deliver a car with a hazardous battery is absolutely inaccurate.” They went on, saying, “As with Model S and Model X, which have well demonstrated safety records, we maintain a rigorous approach to quality and process control for the Model 3 battery. Even more importantly, to our knowledge, there has not been a single safety concern in the field related to Model 3 batteries at any point over the six months of Model 3 production.”

Tesla’s response raises several good points, but with so few Model 3s on the road, it will probably be a while before we’re able to see how accurate CNBC‘s sources’ claims were. If a pattern of battery issues emerges among early Model 3s, it will be harder for Tesla to deny claims that it made mistakes in production. If not, early Model 3 owners will be able to drive their cars a little more confidently.

Source: CNBC, Tesla

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