Automation and the Factory Floor

In April 2018 Elon Musk wrote that "excessive automation at Tesla was a mistake" (widely reported; the remark is usually dated 13 April). He was explaining why Tesla was nine months into production of the Model 3 and still far short of the rate it had promised. The car had been unveiled on 31 March 2016 and had drawn about 325,000 reservations, each with a deposit of about $1,000, in its first week (reported). Tesla designed the programme for about 500,000 cars a year and planned to build them on a highly automated line that Musk called the "alien dreadnought", a factory in which robots would do most of the work and people would be few. Production began in July 2017 with a target of 5,000 cars a week by the end of the year.

The automation did not work as designed. The battery-module lines in Nevada and the body and final-assembly lines in Fremont, the former NUMMI plant (Chapter 13), proved too complex to bring up to rate, and quality problems and rework were widely reported. Tesla's answer was to do in weeks what it had planned to avoid. It removed robots, added people, ran extra shifts, and in May and June 2018 built a third general-assembly line, GA4, under a large tent in the Fremont car park. It reached 5,000 cars a week in the last week of June 2018, six months late, and posted net income in the third and fourth quarters of 2018 (company). Deliveries rose from about 103,000 in 2017 to about 245,000 in 2018 (company, reported). The cost was a cash burn through the first half of 2018 that left analysts debating whether Tesla would need new equity, on top of a high-yield bond of about $1.8 billion sold in August 2017 (reported).

What Tesla learned showed in its next plants. At Giga Shanghai in 2019 it copied a process it had already debugged in Fremont (Chapter 16). Its later process changes attacked the design rather than automating the old process: large single-piece aluminium castings from 2020, which replaced about 70 parts in one rear structure, and the "unboxed" assembly method presented at its Investor Day on 1 March 2023, in which a car is built in separate sections that are painted and fitted in parallel and joined late, for which Tesla claimed up to about 50% lower manufacturing cost and about 40% less factory floor than the Model 3 and Model Y (company claim). The first Cybercab built that way was reported on 17 February 2026 at Giga Texas.