How to build a car in a loss, how deep is the "production hell" of Tesla Model 3

In the early hours of this morning, Tesla announced the first quarter of the fiscal year of 2018. In general, Tesla was not as bad as the analysts said before.

After the upgrade of Model3 in mid-April, it reached a maximum of 2,270 vehicles per week. Tesla’s cash balance is $2.7 billion, and its 2018 capital expenditure forecast is down from $3.4 billion to $3 billion. Tesla expects to achieve profitability in the second half of 2018, and cash flow will turn from negative to positive.

Bloomberg estimates Tesla Model 3 weekly production

Tesla's total revenue for the first quarter was $3.409 billion, up from $2.696 billion in the same period last year and higher than analysts' estimates.

However, Tesla's gross profit for the first quarter was $457 million, down from $668 million in the same period last year, and its net loss reached $785 million, nearly double the loss of $397 million in the same period last year.

In addition to the above data, another analyst is concerned about the data is the predetermined amount of Model3. By the end of the first quarter of 2018, Model3's net bookings (including previously scheduled but not yet delivered) exceeded 450,000. At present, Tesla has launched Model3 in no more than 20 concept stores around the world. In the second quarter, Tesla will increase the number of Model3 outputs.

Model3 seems to attract too much attention. Tesla said that ModelS and ModelX are scheduled to be higher in the first quarter of 2018 than in the third and fourth quarters of 2017. In the first quarter of 2018, Tesla delivered a total of 24,728 ModelS and ModelX.

Compared to last year's data, Tesla Model3's current weekly production has been very good, and even gradually escaped the signs of "production hell." At present, Tesla has reached more than 2,000 vehicles per week.

Tesla Model3 delivery in 2017, picture from Bloomberg

However, ElonMusk promised too many times for the production of Model3, but it couldn't be cashed every time. This greatly defeated the confidence of the supporters and made the opponents happy.

What is causing the output of Model3 to never reach the target? How many layers are there in the so-called “production hell”? This has to start with Tesla's battery.

Manually assembled battery

Tesla's battery is a 18650 cylindrical battery, and each Tesla has thousands of cylindrical batteries. These batteries are first neatly arranged into individual battery packs before they are assembled. In the battery pack, each row of cells is adjacent to the coolant line. The battery packs also form a battery pack, and each battery pack has a separate battery management system. The panels at the bottom of the Tesla electric car consist of these battery packs.

After the Tesla battery pack is disassembled

In January of this year, foreign media was exposed, and the battery pack of Tesla Model3 was actually assembled by hand. According to some of Tesla's in-service engineers and former employees, Tesla also borrowed some employees from Panasonic to complete the manual assembly. These employees mainly complete the arrangement of the batteries, the wrapping and fixing of the cooling pipes, and the external fixing of the entire battery pack during the assembly process. Due to the complicated structure of the battery pack, the workers are faced with extremely high production pressure, and the scrap rate of the entire production line is high.

This is mentioned in today's earnings report. ElonMusk himself has admitted that the production of Model 3 is related to the production of batteries. In the fourth quarter of 2017, he said, “It’s a bit ironic. The battery pack should be part of what we do best, but we’re a bit overconfident and overestimated the ability to produce battery packs.”

However, according to the new wisdom, at the end of January, the proportion of manual assembly is getting less and less. In February, there were media reports that Tesla will design and build a new automation system for production in Germany Battery. The system will reach Tesla's Gigabit plant producing batteries in March of this year, but assembly is expected to take a long time. Tesla said in today's financial report that the new automated production module can greatly reduce the cost of production, Tesla's team in Germany is currently focusing on expanding the module's production capacity.

Tesla also said in the financial report that after deploying several semi-automatic production lines, the battery production bottleneck has been solved.

In addition, according to the new wisdom, there are media reports recently, the Tesla Gigatron plant began construction expansion, and announced thespecial image of the construction.

Tesla's Giga factory is the base for the production of Tesla electric vehicle batteries. So far, the construction of the factory has only completed 30%. Tesla plans to complete the construction of the Giga plant by 2020 and achieve a capacity of 150GWh per year.

From the current Model3 production data, battery production has been raised. In the future, with the expansion of the Giga factory, the production of batteries will no longer be the reason for the production of Tesla electric vehicles.

Automation needs to be used

However, the battery is only part of the Model3 production.

There are four major processes in the car production process: stamping, welding, painting, and final assembly. The first three processes, the degree of automation is now very high, the efficiency and accuracy of the machine is higher than the manual. However, the final assembly process is difficult to fully automate, because this process involves all the parts of the car in various sizes and shapes. The current industrial robots cannot achieve the flexibility and precision of human employees, and the efficiency is greatly reduced. .

However, I want to change everything Tesla, always want to go ahead and build a fully automated car production plant. Until recently, ElonMusk realized that full automation was a pit and it was easy to use.

In mid-April, in an interview with CBS, ElonMusk said that Model3's output could not be lifted because they were overconfident about some of their core technologies and used too much technology in Model3. The technology here, 80% refers to the final assembly.

During the interview, ElonMusk showed the reporter the production process of Tesla and said that a super complex conveyor network was dismantled. This conveyor network should be the assembly line. During the visit, the reporter said that the machine here is really too much, and ElonMusk also nodded and agreed.

Even with the dismantling of the highly automated assembly line, Tesla still has difficulties to solve. During the interview, ElonMusk told reporters that the hardest part is to install the engine and battery into the car.

On April 17, ElonMusk sent an e-mail to all employees indicating that in the next week, it will reach 3,000 to 4,000 units of weekly production, and in the next three to five days, the Giga factory and Fremont factory will be comprehensive upgrade. ElonMusk also said that there will be an upgrade at the end of May, and by the end of June, it will be able to achieve the goal of producing 6,000 Model3 per week.

The goal of achieving a weekly output of around 5,000 units in two months is once again emphasized in today’s earnings report. After so many pigeons, whether Musk can fulfill the promise is really hard to say.

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