If you’ve ever ridden in a Tesla vehicle featuring the company’s white vegan leather seats, you were surely impressed. They’re as soft as a cloud. They’re as white as Conan O’Brien’s grandma (I assume). Beyond the smooth surface, they’re so cushy you feel like you just sat on the marshmallow man. And on a cold day, they’ll toast your buns quicker than a looney roadrunner can climb a mountain.
(The black ones are great too, by the way. But the white ones are on another level.)
Some people don’t care about seats. To those people, I say — get woke! Seats are half the experience of riding in a car. Pay attention to what you’re going to be sitting on for years of your life before you plop down a cool $40,000 on a boring vehicle. (You also might want to reconsider spending tens of thousands of dollars on a boring vehicle and go with a fun one instead, but that’s another story.)
I knew a few things about Tesla’s seats before going on a Tesla seat factory tour last month. I knew I loved them, I knew there were black and white options, and I knew they were vegan. I learned soooooo much more at Tesla’s one-of-a-kind and “second-to-none” seat factory that I’m sure I’ll be revisiting this topic repeatedly.
CleanTechnica‘s tour of the production facility started with a stroll through the cafeteria, and while that might seem off topic, it actually gets to the heart of the matter. All of this work is about helping humanity. The cafeteria was packed with people. Tesla employs so many different types of people, and an impressively high proportion of them are smiling and enthusiastic. They seem to ooze positive energy, which shows they are happy to be doing their part to help humanity, to help society, to help all types of breathing life in our small marble. This is something that struck me in every Tesla facility.
Sure, there must be people who don’t like heading to work on Monday, but one of the most striking takeaways from the half-day tour was that all of the noise, negativity, and sense of “crisis” around Tesla dissipates when you go inside Tesla doors and walls. It’s a stark contrast to what you see in the press. It gives you hope to witness that. No matter what goes on outside and how others try to shape the story, it’s cool to see that Tesla is a positive, optimistic, uplifting, inspiring place. I did indeed look around for any disgruntled workers, but I didn’t see anyone who fit that bill.
I understand some people think I’m going to bring an insincere bias into this, but I honestly don’t think that’s the case. I’m trying to understand the story as completely and accurately as possible in order to pass that on to whoever wants to learn, whoever reads CleanTechnica. If there are concerns, I want to know it — and we publish about those when they come up. But what I find repeatedly with Tesla is: the more you dig, the more inspiration and hope there is. That is such a contrast to what most of the media publishes about Tesla. Because we don’t follow the drumbeat of the mainstream media, CleanTechnica ends up looking to some readers like it’s far outside the norm, and presumably biased. Never mind that we end up being right on many topics that major media outlets get so wrong. Our perspective is that, for various reasons, there is extreme bias against what Tesla has been achieving, what it has been producing, and what it is. Therefore, we have to put ourselves out there to try to tell the true story in the midst of a giant smog of nonsense — even sometimes having to wipe that smog off our sleeves to get our own understanding in line with reality. But that’s just a tangent to preemptively respond to paid or unpaid trolls who don’t like the stories we are presenting. (You sometimes have to go meta in these things.) Let’s get back to the seats.
When Kyle Field, Chanan Bos, and I rolled up to the seat factory, I thought it would be an interesting and useful tour since many consumers do care a great deal about the seats of a car. However, I didn’t initially expect any mind-blowing discoveries. And let’s be honest — the heavens didn’t open up and unicorns didn’t rain down when we strolled inside the factory. But we learned a few fascinating facts.
First of all, automakers are generally not seat producers. Actually, I think no other notable auto manufacturers produce their own seats. There are apparently four main automobile seat producers globally.
If you’re like me, where you see the small number of four, you think, “Wow, that’s semi-monopoly level.” It’s not that hard for the heads of a few seat companies to have dinner and make sure they don’t have a race to the bottom with pricing. Conspiracy theories aside, though, that’s just not a very competitive marketplace, and Tesla CEO Elon Musk tends to be a fan of cutting through such markets in order to dramatically lower costs and accelerate innovation. I’m not sure if that was the core purpose of in-housing the seat production, and I didn’t talk about that at length with the seat engineers who guided us through the factory, but I presume it was at least a semi-significant factor in the extra vertical integration.
Tesla’s highly unusual vertical integration is actually a fascinating topic. As with all significant business decisions, it comes with risks and potential rewards. We at CleanTechnica are still piecing together the broader story of Tesla’s ongoing vertical integration and how it is working, but the best starting point is a presentation I saw Marc Tarpenning give several years ago.
Tarpenning was one of the five co-founders of Tesla. His presentation was on YouTube for years but last I checked had gone missing, so I’m sorry I can’t share the exact words with you, but one of the points he highlighted was that automakers had been gradually outsourcing more and more of their work for decades. His core message was that their expertise had largely been pruned down to engines — and sticking the different pieces of the automobile together.
The most important takeaway of that was that it was very hard for automakers to shift to an electric future due to gas/diesel engine technology being:
- their core competency,
- their main area of competitiveness,
- where execs built their careers, and
- where much of the companies’ IP and capital investments had been sunk.
However, it seems to me there are broader ramifications of that outsourcing. As indicated above, seat production eventually shifted to a semi-monopolistic trio. That limits automakers’ options as far as constantly customizing seats based on their needs and owner feedback. It also doesn’t provide them much opportunity for finding cost savings — that’s in the hands of the suppliers. Tesla, on the other hand, like in other areas of its manufacturing, is obsessively looking for ways to improve capital efficiency, cut costs, improve the quality of its seats, and be at the forefront of automobile seat design.
One example of that optimization process was a somewhat hilarious and fascinating anecdote about the scrappy improvements engineers are continuously finding. There’s one part of the seat production line that now takes 33 seconds to complete. That 33 seconds was a target for months. Along the way to that target, an engineer discovered that the company could save a second or so by blow-feeding a bolt to the tool on the end of a robot’s arm rather than having the robot pick up the bolt from a rail. The engineer had the idea of shooting the bolt through a tube, which looks a bit like the large tube of a car vacuum (the kind you can find at some gas stations). Then, a little later on, the team figured out that it could improve that a bit further and cut the production time by 0.8 seconds with one small change. Instead of shooting the bolt all the way to the end, it now shoots the bolt halfway, where it rests in the tube. (Inside the tube, it actually rests on the ground in a way that looks like it got accidentally left there.) When the robot is ready, that bolt lying on the floor is more quickly (0.8 seconds more quickly) transported to the seat and another bolt is shot down into the position it was in. Lost yet? We show this better in the video tour near the top of this article.
While Elon Musk called the Model 3 production process a “game of pennies” on the last conference call with the press, one of the engineers I spoke to called it a “game of seconds.” That’s how they look at it.
It’s one thing after another like this. That portion of the line is the only such seat production process in the world using the robots it uses — the first fully automated seat cushion production line in the world.
In another area, Tesla is using cutting-edge remote laser welding technology and other scrappy solutions to optimize the production system (i.e., to reduce production time). Some of the solutions go beyond the default process. Some areas of the seat factory are highly automated while others have the important touch of humans who are thoroughly trained in the company’s seat production dojo. (Seriously.) These employees are taken care of via thoughtful ergonomic systems and scheduling patterns. (Side note: I predict that some of them will move on to become world-class massage therapists.)
The production lines are highly flexible and can quite rapidly alternate which color seats are needed. There are slight differences in seat regulations across continents as well, but Tesla is again able to shift from one seat design to another.
The crew at the factory has squeezed much higher production volumes out of the initial Model 3 seat line than initially expected. The goal was originally 5,000 a week, but they now have the comfortable capability to produce a rate of 7,000 Model 3 seats per week — and the team has proven they can do more than that in one week with the existing line. That shows how much Tesla’s scrappy engineers and production optimizations have been customizing default systems in order to improve capital efficiency. The same equipment can now be used to produce a lot more product than initially expected, which means a lot more money for the same capital investment.
There’s space in the factory to add another seat production line, which could in theory double the current capabilities. Let that sink in for a moment. That’s a 40% or greater improvement compared to what was initially expected at the factory. Imagine you have a complicated lemonade machine that you thought could produce 10,000 cups of lemonade a day but can actually now produce 14,000 cups of lemonade.
At the end of the tour, one of the guides enthusiastically — with genuine excitement and joy in his eyes and voice — said the seat production facility was second to none across the world. He was certain about it, and super happy at what they had achieved. I thanked him and others for their service to society. After all, the goal of Tesla is not to simply create marshmallow seats for humans to sit on, and it’s not to make money for money’s sake. Tesla has a mission beyond that, which is infused in the workforce from top to bottom (surely not every employee, but definitely many of the people we talked to). Tesla is a mission-driven company that is trying to accelerate the transition to sustainable energy, because the future of human society relies heavily on our ability to do that. Society is facing an existential crisis, and Tesla is one of those companies trying to wake up the beast of public awareness and upgrade daily technology in order to avert the worst of that crisis.
Circling back to another company policy that Kyle and I will discuss in other articles, Tesla still operates in some startup-like ways. Elon encourages engineers to take risks if there’s a moderate (~60%) chance of success and improvement. This enables — or stimulates — the scrappy solutions employees find throughout the system. It stimulates the kind of changes that lead to a 60% improvement in the production capacity of a line. It is the kind of thing that leads to retiring CFO Deepak Ahuja emphasizing on at least two Tesla conference calls that Tesla is extremely capital efficient, more so than any other automaker he has worked for. I noticed him light up on two conference calls in recent years while trying to explain that, while trying to explain in just a couple of lines what numerous engineers are doing every day under Elon’s guidance to try to make Tesla not just a gold medalist, but the absolute best at what it does. The goal may not be perfection, but it’s to get as close to perfection as possible as quickly as possible.
I’ll end this piece by coming back to the seats themselves, and what I think were the two things that led to Tesla’s unexpected leadership position in yet another portion of the 21st century automobile. First of all, Tesla got into the seat business with the Model X. The company was facing unusual challenges due to the unique design of the X. Suppliers couldn’t provide what Tesla wanted. So, Tesla brought this portion of the process in-house. In the end, the challenge of the Model X (which many people think — mistakenly in my opinion — was too unique and experimental) led to Tesla being a world-class seat producer.
The company is no longer tied to the mercy of one of the world’s “Big 4.” It can design seats to meet the custom needs and opportunities presented by Tesla buyers and the electric powertrain. Tesla can make sure to have multiple options for the supplies that go into the seats, and can work with those suppliers to also make their work more sustainable. The company doesn’t have to worry that a seat shipment won’t arrive and will crush some production plans, as happened much deeper in the past at Tesla (and has also happened with other automakers).
Yes, there’s a cost to this vertical integration. There’s a capital cost to the production lines, and an operational cost to pay the factory workers and designers. However, it’s the kind of thing many Tesla investors like to see. This is a company looking for every opportunity to innovate in order to make customers happier and in order to reduce the prices of compelling zero-emissions vehicles.
The final note in this story is about how vegan leather seats entered Tesla’s evolution. I think there were two annual shareholder meetings where vegan investor activists got the chance to stand up and request — super politely of course — that Tesla take on a leadership role in the production of vegan vehicles. They pushed to remove leather from every part of Tesla’s cars, from the seats to the steering wheels. In the last meeting in which those activists were given the mic, the lady speaking emphasized that studies had found vegan faux leather was objectively a better option that could be softer, more durable, more stain resistant, and more preferred by customers (vegan or not). Elon said he’d look into it — or someone on the team would. Eventually, that led to the amazing “cloud seats” many Tesla drivers and passengers are enjoying today.
The black vegan leather seats are great too, mind you, but just aren’t quite as soft. Apparently, that faux leather comes from a different supplier and uses a different chemistry that results in slightly different qualities. To be frank, some people may not even notice a difference beyond the color, but I’m not one of those people. That said, the color of seats I’d choose would depend on the color of the exterior paint more than anything else. 😛
Tesla, like many companies, is a fan of consumer feedback. Elon gets on Twitter at times to brainstorm new product ideas and improvements to existing products. Hundreds or thousands of others are working behind the scenes to collect such feedback and funnel it to the right engineers, designers, and executives. It seems that vegans are not discriminated against.
The next time you drive your Tesla or ride in a Tesla Shuttle, I hope you’ll think of this article about Tesla’s seat production facility and be happy to understand a bit more about what went into your bum supporter.
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