Auto pilot accidents keep happening. How far is Tesla going?

“Tesla is bankrupt!” Tesla founder Elon Musk ridiculed himself on his Twitter page and attached a photo of his bankruptcy cardboard house.

This is Musk's self-deprecating joke on April Fool's Day this year, and it is also a counterattack against Wall Street's short-selling forces.

Jim Chanos, a big short-seller who made a name for himself in the World of War, listed many reasons for shorting Tesla and said its stock was "worthless." John Thompson, chief investment officer at Vilas, is one of the few hedge fund managers on Wall Street who have consistently outperformed the market. He believes that "Tesla will close in the next 3-6 months." Goldman Sachs looked again in the report in early April. Air Tesla and cut the price by 36% on the current share price.

Wall Street does have plenty of reasons to short Tesla: capacity hell, orders slip, and Moody's bond downgrade. Worse than the mismanagement, Thompson also questioned Tesla’s alleged financial fraud, based on the SEC’s 85 investigation letters and two financial officers leaving. All of this is ultimately attributed to Tesla's negative cash flow, and Thompson believes that Tesla needs to raise $8 billion over the next 18 months.

In the past month, Tesla has encountered new problems almost every few days. Share prices fell by as much as 25 per cent from a peak of $257 to a maximum of $345, well above Face-book, the centre of public opinion.

On March 28, Tesla had a serious accident and federal security personnel investigated its autopilot system; On March 30, Tesla announced the recall of 123,000 vehicles due to the potential failure of the steering wheel power system in a cold environment. This is the largest recall accident in its history; In early April, after being questioned and shorted by Wall Street, Tesla's stock price plummeted at the beginning of the month.

At the time of the twin difficulties of production capacity and autopilot, Musk began to sleep in the factory again, and Doug Field, vice president of Model 3 production, was shelved; On April 11, the Fremont factory was suspended; On April 16, the U.S. government began investigating factory workers 'injuries; On April 25, Jim Keller, the person in charge of autopilot, also announced that he had left Tesla to join Intel.

In the 15 years since Tesla was founded, lack of money, lack of people, and struggle on the verge of bankruptcy have become the norm in Musk's entrepreneurial career. Tesla has long been in the top of the short list. In an interview, he said that these short-selling forces are "very hurtful." But each time, Tesla survived in desperation.

"Tesla is either dead or alive this year! After analyzing Tesla's cash flow at a meeting in the automotive industry, this was the unanimous conclusion of the car companies. Model 3's productivity climb will be the most critical battle since Tesla was founded. If Tesla breaks through the production bottlenecks and cash flow crisis, it will become a mainstream Depot; Otherwise, what awaits Musk is a real bankruptcy reorganization.

Financial crisis bottom: Tesla on the brink of bankruptcy

Tesla is tightening all financial spending. "All project expenditures in excess of $1 million that have accumulated over the next 12 months should be suspended until I get my explicit approval. Musk wrote in an internal letter in mid-April.

Qilei, managing partner of EmergeVenture, a family-focused fund for the Chinese and US auto industry, has made a deal with people in the auto industry, and Tesla is expected to consume all its cash flow in August and go into bankruptcy. reorganization. "All the people in the automotive industry I have contact with are not optimistic about Tesla, but hedge funds have the opposite attitude -- as long as Musk can get capital or reissue debt before the collapse, it will enter the security zone. "Qilei told Caijing."

According to the internal letter, Mr. Musk is clamping down on all costs: he requires the financial team to verify global project costs and cut any unjustified spending. In automobile production, contracting companies have to go through various links such as contractors, middlemen, and subcontractors. This means that many middle managers simply do nothing but produce value. He asked all managers to be familiar with their suppliers 'offers, down to every component and even workforce.

Working for Musk is never easy for employees or suppliers. He asked all contractors to have a clear and detailed offer and time to perform, and anyone who failed to meet the Tesla standard will terminate cooperation next Monday.

Under strict budgetary control, the Tesla factory began to enter the devil's production rhythm -- production 24 hours a day, 7 days a week. In addition, the Fremont factory and the Giga-factory factory will also increase their capacity at a rate of about 400 people per week.

Many entrepreneurs have lost to cash flow. The 2017 financial report shows that Tesla had $3.5 billion in cash by the end of last year, and spent about $1 billion in cash per quarter last year, mainly for large investments in the Model3 line. In the past nine quarters, Tesla has never been able to make a profit in a single quarter. The financial report shows that its total debt is $23 billion, and UBS said that $1.4 billion of its debt will expire at the end of 2018. Moody's bonds believe that Tesla urgently needs more than $2 billion in financing.

In addition to the continuous large amount of money required for the Model3 production line and the production plant, the semi-hanging truck that was released last year, the high-end sports car Model YSUV, and the Chinese factory where the negotiation process is vague, are all large sums of money for Tesla.

"If you look at risk assessment and economic returns, Space-X and Tesla are the worst projects. When you start building Tesla and Space-X, I estimate the success rate will not exceed 10 %. "Musk once said publicly.

This is not the only time Tesla has faced a financial crisis. Since he started his own business, Musk has been constantly facing problems in capital, talent, and production. The most difficult one occurred at Christmas in 2008. Musk has closed its financial department and is ready to declare bankruptcy the next day. During the financial crisis, key events such as Daimler's investments and Toyota's Fremont plant's transfers and orders all helped the new electric-car rookie make a thrilling transition to safety.

By the end of the second quarter of this year, the weekly output of Model 3 can achieve 5,000 units, which is the turning point of Tesla's cash flow crisis. With a base price of $35,000 per model 3, plus some options averaging more than $40,000 per car, it will create nearly 1 billion monthly cash flow for Tesla if it breaks through the bottleneck.

Production Hell and Repeated Jumping Tickets

"There are two things that keep me awake at night. One is that artificial intelligence will destroy the world and the other is Model 3's production hell. " said Musk.

His most recent appearance in public was in an interview with CBS. He looked Haggard because he did not sleep well. In order to increase the capacity of the Model 3, Musk once again moved his bedroom to the Fremont factory. In a small office in the corner of the factory, there is a simple whiteboard and several tables and chairs. He is very active in showing his single sofa that sleeps every day. It is a slender sofa with a wide cushion but it is difficult for adults to lie down.

"The current Model 3 problem is certainly less than when we were Model-X. At that time, it was also difficult to mass-produce. Musk slept in the factory for a month and checked every link as soon as it came out. "Tesla's former employee, Chenpeng, told Caijing. Musk himself did not forget to joke that the last time he slept in the factory because the sofa was too small, he had to sleep on the ground.

The factory's LCD display shows the production of each part. "I can see the whiteboard in real time, where there is a problem, and then personally check it in real time. Musk explained why he lived in the factory. He participated in the supervision of the entire process and solved the problems encountered in production as quickly as possible. When asked about the capacity of Model 3 this week, he almost blurted out "2071."

Model 3's production difficulties and Musk's jump tickets are no longer news. At the motel 3 launch in July last year, Musk announced that its weekly output would reach 5000 by the end of 2017, but the total number for the fourth quarter of last year was only 2500. Later, he said, weekly production could rise to 2500 vehicles in the first quarter of this year, with only about 1400 vehicles hovering after the end of the first quarter.

Tesla's production experienced a qualitative improvement under the pressure of Musk's continuous sleeping factory. “Tesla’s production exceeded 2,000 units per week!” Although the weekly output did not reach 2,500 units that should be reached after the jump, Musk announced the news and the stock price rose by over 6%. A few weeks later, he wrote confidently in the internal mail that the output will reach 6,000 vehicles per week at the end of the second quarter.

Interestingly, despite repeated reneging and even false claims that consumers have sued for capacity problems, Musk's character, which is almost public on the Internet, has also won him some favor. When Musk inadvertently "showed" his factory sofa, netizens spontaneously raised a new sofa for him. 400 people quickly raised $5,000 a day to complete the original target of $1,000.

Within a few days of the announcement of the good news, the Fremont factory production line was "closed again" and shut down for 4-5 days without any warning; An official spokesman responded that the factory shutdown was to increase automation and systematically solve production bottlenecks.

"Humans are underestimated. Musk wrote on Twitter on April 13 that he thought Tesla's excessive automation was a mistake. He was too eager to use all new technologies at once in the production of Model 3, but it proved that it needed to be taken step by step.

When Qilei visited the Tesla factory, he found that the damage rate was particularly high. There were some damaged doors everywhere in the factory. This claim was also confirmed by a Tesla employee. In Tesla battery production, hand-assembled 100 sets of batteries, usually only 80 groups are qualified, and those unqualified parts are discarded, while the quality rate of old depots is only within 1 %.

"Traditional depots have built a production line for decades. Normally, the design of each model and the calibration of production line machines take more than six months. "Qilei said. In established auto companies, 90 % of them are automated, but only manually assembled parts and quality inspections. Today, many of Tesla's components are still assembled by hand. Since many Model 3 components are still being manually debugged, each Tesla produced now has a subtle difference.

"The biggest problem with Tesla's capacity bottlenecks is that production does not keep up with design. Tesla employees revealed. Usually when doing car design, after the design is completed, the factory will be confirmed to be able to produce, but Tesla's internal rhythm is fast, the pace of work is fast, and the factory does not confirm it. This leads to many links that need to be manually modified, especially in this part of the battery package.

In addition to the assembly process of the production line affecting production capacity, another major production capacity anxiety is the battery problem. In the production of the new Model 3, the previous 18650 battery was replaced with 21,700 batteries, and the energy density of the new battery increased, which has better performance than before. However, the challenge is that since Model3 is designed to be narrower and smaller than Model-S, it needs to have a narrower battery encapsulation technology. Many packaging modifications, because the production line has not yet been completed in time, are still using manual packaging, the problem is high quality rate and low production performance.

According to a battery supplier who visited the Tesla plant, many of Tesla's production lines have been produced using robots, and there have been many innovations in the design process and the use of material processes. But factory workers work 12 hours a day. The man who is very familiar with factory management believes that Tesla has too many administrative and cultural problems.

According to American media Review, Tesla employed more than 10,000 employees at the Fremont factory. Some people were cut by machines, some were accidentally overwhelmed by forklifts, or were splattered with melted metal Burns. On April 18, California's Occupational Safety and Health Department began an investigation into the injury of Tesla factory workers.

All these problems have nothing to do with Musk's personal character. He works 100 hours a week and has been creating impossible things. Every time he encounters difficulties, he personally plays in the game and applies this high-pressure policy of pushing himself to the limit to employees. It is also reflected in the design and production of cars.

Constant autopilot accidents

On March 23, on the busiest 101 highway in Silicon Valley, a Tesla crashed into a high-speed guardrail. The first half of the car was completely unrecognizable. The owner was rushed to the hospital for treatment and died. Five hours of fire extinguishing and the terrible abandonment of Tesla's vehicles spread the accident widely.

The investigation report showed that the vehicle was in Autopilot state at the time of the incident. The accident once again caught Tesla's autopilot in the charge of killing people. Like all previous autopilot accidents, the owner of the car still left the steering wheel five seconds before the accident, ignoring the system's warning.

To be precise, Tesla's Auto-Pilot is an auxiliary driving feature that can not keep its hands off the steering wheel for too long. This is a different level of autopilot than the completely unmanned driving developed by Google.

The sense of technology and the cool shape are both Tesla's big selling points, and autopilot has become a big gimmick for many tasters to choose Tesla. But it has also forced the autopilot department to update and upgrade regularly and has become a new selling point for every new product release.

In addition to the departure of Jim Keller, the head of autopilot responsible for AI chip development, an investor close to Tesla's interior revealed that the Auto-Pilot department is the busiest and most busy department in Tesla.

"Many internal employees report directly to Musk. He is also watching this area more closely. "An investor close to Tesla's autopilot Department said. In Silicon Valley, Tesla is known for its high-intensity work, but its income is below the industry average. Tesla's employees were particularly popular in Silicon Valley when each of the major autonomous driving camps emerged because of their hands-on experience.

With Tesla's entire company's strict budget check, Auto-Pilot's wages have risen to the Silicon Valley average because of high employee mobility.

Tesla's core secret.

Like all of Tesla's management culture, which is centered on Musk, Musk's control is also manifested in its own development and asset-heavy operating model.

If Tesla were willing to outsource core projects such as battery assembly, chassis, and body, it might not face today's capacity bottlenecks, but it would not be a "Depot" that really holds the production line after the crisis.

Most new energy vehicle companies other than BYD only develop one or more major links such as "Three Electricity". The remaining links will be handed over to suppliers. This light asset model only needs to cooperate with suppliers. Combine all parts of the car. It can save costs and control cash flow, but it is difficult to control product quality and price, and is greatly affected by partners.

In 2013, it was the collapse of electric vehicles. The electric vehicles Vogo and Coda, which were created with Tesla successively, have closed down due to problems such as capital and mass production. If you want to make the biggest difference between Tesla and other electric vehicles, it adopts the heavy asset model and invests heavily in production R&D: binding battery technology to Panasonic's interests and assembling it yourself; motor and electronic control are also developed by themselves, all The first-level components are all produced by themselves, and they are also the first to introduce self-developed assisted driving functions.

"If traditional manufacturers come to do electric cars, Tesla's battery management technology is 10 years ahead of the old Depot. It has accumulated a large amount of data to analyze the loss of the battery. "It also has the world's leading motor technology," an employee told Caijing. "Good motors can increase battery efficiency by about 10 %. "

Tesla, which is completely self-operated and assembled with all core first-level components, has a huge demand for capital. The closed business model has repeatedly saved Tesla in life and death during the crisis. The former Toyota factory, which was bought by Musk for 40 million US dollars, has already produced Toyota's $50 million parts and components because it produced and assembled all the first-class parts. It has saved cash flow and accumulated practical experience.

But this pattern also poses problems. With the rise of new energy vehicles, mainstream power batteries are dominated by soft packs and square types. It is an electric vehicle battery scheme that is better than circular batteries. Tesla used Panasonic circular batteries in the early days. All the experience was in cylindrical batteries and could only form interdependent benefits with Panasonic.

"Tesla is now able to complete the production process of a car for two years. Basically, it is because it is small, so the decision is flat and executed quickly. Qilei believes that "when Tesla was a small manufacturer of large manufacturers, many things were not as simple as they are now." "

Many people interviewed by Caijing believe that Tesla's management is almost the personal will of Musk. He made Tesla. At the same time, the company's most dangerous is not just cash flow and production capacity, but "As long as Musk goes, The company will collapse. "

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