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Tesla has always struggled to build cars. Now this critical foundation is really hurting his business



  • Tesla has always struggled to meet the automotive industry standards for its manufacturing processes;
  • Because the company devotes so much time to something that the rest of the automotive industry has almost perfected, there is less time to deal with the more complex aspects of its business. [19659002] With the rise of Tesla, this failure has become more of a hindrance to his business.
  • Visit the Business Insider homepage for more stories.

For years, it has been the largest puzzle in the automotive industry. Tesla's share price, consumer attention and media profile have grown along with vehicle sales ̵

1; and although the company has gone from selling several thousand vehicles to nearly 250,000 in 2018, it continues to hamper the basics of production. They coined the term "hellish production."

This was confusing for industry veterans. Car makers had spent decades refining a "lean" production model, and by the time Tesla began to increase production significantly, the electric car manufacturer had to be in an ideal position to implement this system with a minimum training curve.

Still, the opposite happened. Last year, the actual Tesla plant in California failed so thoroughly when assembling a Model 3 sedan that the company threw an additional line into its parking lot; cozy under a huge tent, it looked like something from the early days of car manufacturing.

I thought it was actually an innovative solution to a nasty problem, a nimble, "good enough" patch and enabled Tesla to keep Model 3 on the road. But that didn't make it any less puzzling.

Read more: Here's how Tesla cars stand up to the best of the competition from the world's top manufacturers

In fact, for much of the last five For years, attention has been focused on Tesla nuts and bolts. I cannot exaggerate how strange this is. In the traditional automotive industry, cars that are announced for production just … appear a year later. Literally no one spends time obsessing over the ability of Ford or GM or Toyota to actually create cars. Rather, they worry that Big Auto may be overdrawn and over-driven and forced to cut prices to move excess inventory.

Car drivers can focus on the important things – not on making cars

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GM


The benefit that the acquired competence gives to car drivers is significant. They are free to run their business, free from the hassle of armor and wheels that are attached on a schedule. This is important because the business is both dynamic and requires considerable up-front plans and investments.

You can't sit around wondering if your million-dollar robot is welding the body panels properly, or that the number 7046 / 33B has a wiring harness, was ordered in the right quantities, and has a valid installation protocol.

Tesla CEO Elon Musk contemplates such trifles, as long as he sometimes throws a sleeping bag in his factory. As a result, he lacks the time to think about other important areas of his business, ranging from service to financing (anyway, he lacks time, given that he also manages SpaceX).

The problem was compounded by the increase in Tesla's production and sales. The short form of the story is that even when Tesla invents the basics of manufacturing, it adds complexity to other parts of its business and shows no signs of taking a breath for consolidation; on the contrary, it is preparing to turn on the switch of a new factory in China.

Tesla also has a lot more problems downstream than the big, traditional car companies. Big boys design and design, manufacture and market vehicles; they also maintain financial weapons to attract their automobile profits into less capital-intensive financial profits. Tesla does all this (minus, oddly, financing), but since Tesla does not use franchise dealers, it equally handles sales and service, and maintains a very fast-paced infrastructure, its Supercharger network (Ford, by contrast, does not works with gas stations).

Down is Tesla's Biggest Challenge

  Tesla Store

Tesla Store.
AP


This downstream adjustment has been subjected to serious checks with the rise of Tesla and is often cracked. Tesla fixes it on the go, I think to a large extent the company is in almost constant fire mode with everything that is not the all-consuming side of car assembly in an enterprise. Tesla has received a pass from its loyal owners, but this capital will be spent at some future time.

Tesla would not have had to deal with this if he had made two important decisions in the beginning:

  • First, the company had to follow best practices in the automotive industry when it started building cars in five-digit numbers. Production would have been much smoother by now if it had. All of this would mean using some version of the Toyota production system instead of designing a consistently sophisticated vehicle in a Model X SUV and trying to automate too much of the Model 3 assembly.
  • Second, Tesla should partner with or create a franchise distribution network or create your own. By itself, it fits in with the Silicon Valley book, but it would be a better idea to imitate Honda, whose first dealer franchise was created in the 1960s (not too far from Tesla's current headquarters).

At this point, Tesla has been in existence for a decade and a half. If these deficiencies were to be corrected, they would be. So from now on, expect more of the same.


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