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Published on May 26th, 2016 | by James Ayre

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Some Auto Industry Suppliers Push Back Against Tesla’s Aggressive Model 3 Production Plans

May 26th, 2016 by  


A number of automotive industry supplier execs were recently quoted by Reuters as saying that Tesla’s new Model 3 production timeline — 100,000 Model 3s in 2017 and 400,000 in 2018 — would be hard to achieve and “potentially costly.”

Tesla Model 3 greyTo reiterate an oft-stated point here though, the Model 3 has reportedly been designed from the beginning to be simple to manufacture — ease of manufacture apparently being one of the guiding principles during the development period. So, conventional industry expectations may not hold true in this case. And previous experiences during the launches of the highly complex Model X and Model S may not be particularly relevant.

Musk has previously revealed that Tesla expects suppliers to be ready for Model 3 production in July 2017. While these goals may be “unrealistic” for some, according to Musk, the idea is that aggressive deadlines are a necessity for a rapid ramp up. Suppliers that can’t meet deadlines will reportedly be dropped — with in-house production covering for potential supplier problems. Musk made a very important comment on that point, noting that to avoid issues with (possibly) late suppliers, the company would be working to ensure the capability of producing most components internally.

“It’s very important for us to have the ability to produce almost any part on the car at will because it alleviates risk with suppliers,” Musk commented.

Reuters provides more:

One complication is that Tesla has not finalized the Model 3 design and specifications, said automaking consultants and supply executives who asked not to be identified because Tesla prohibits them from disclosing contract details. Musk has said the Model 3 design and engineering would be complete in June, 13 months ahead of the planned production startup. Under ideal conditions, automakers have launched new assembly lines in 18 months, but they typically take two to three years after the first tooling and supply contracts are signed, several manufacturing consultants said.

Fiat Chrysler Automobiles, for example, is converting a Sterling Heights, Michigan sedan plant to make 300,000 Ram 1500 pickups a year, a 50% increase in capacity.

“FCA already has the talent and the money, and the underlying machinery is already installed in the plant,” said one longtime supply sales executive. “They’re aiming to be up and running in 2018, so they have two years — and suppliers are wondering if they’ll make that deadline.”

Automaking consultant Ron Harbour of Oliver Wyman said increasing production at the Fremont plant to 500,000 vehicles in 2018 would require more stamping, welding and assembly machinery that “could take up to 18 months to order and install.”

Other suppliers and consultants were quoted as mentioning: currently high demand for machinery and tooling (surge in product launches approaching); the fact that the Gigafactory isn’t yet complete; and materials shortages (aluminum, lithium, etc); as reasons that the goals were “implausible.”

Notably, many of these quoted sources are based out of Detroit, so it’s a bit hard to tell how much credence to give them. Ulterior motives are of course everywhere in the world.

Notably, Tesla CEO Elon Musk recently commented that he thought there was currently substantial room for innovation in the manufacturing process itself — rather than simply in product design.

It’ll be interesting to see if the company can pull its new production timeline off — if so, it’ll serve as yet another example of how decrepit and ossified the auto industry has seemingly become.

Interestingly, a Detroit-based auto-manufacturing consultant by the name of Frank Faga was quoted as saying: “I’d be really surprised if he can launch production by next July. But this is a guy who says he’s going to Mars. Who am I to say he can’t do this?”

Photo by Kyle Field | CleanTechnica


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About the Author

James Ayre's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy.



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