Tesla Model 3 production has officially been stopped as the company struggles to ramp up production of their new sedan.
While the company is doing the best that they can with Tesla Model 3 production, they are struggling to meet the significant demand for their cars. While demand has at least somewhat slowed down for the company’s high-end models, the idea of a more affordable Tesla car is appealing to many – to a point where the company is having trouble getting their production up to a point where it can provide enough cars to suit the needs of the market.
According to a Tesla representative on Monday, “these periods are used to improve automation and systematically address bottlenecks in order to increase production rates,” so it seems as if this pause will be short and intended to make Tesla Model 3 production even more efficient when the manufacturing process resumes.
According to Buzzfeed, the outlet which first broke the news, the Tesla Model 3 production will be paused for a period of four to five days – a small break, but one that employees are expected to use vacation days or to stay home without pay to cover. It’s a controversial decision that many have already criticized with regards to the way Tesla is handling payment during this pause, but the break in Tesla Model 3 production appears necessary in order to reach the company’s goal of manufacturing 2500 vehicles per week by the end of the second quarter.
One of the main issues that has held the company back from reaching this goal are some problems with their roboticized assembly line. While robotics may make for a more efficient process overall, there are issues that are bound to crop up – as with any technology – and this small break in Tesla Model 3 production should serve to give the company the time they need to address these manufacturing problems and return to hit the ground running in the coming weeks.
Back on Friday, Musk admitted that he had actually over-relied on automation in the Tesla Model 3 production. This is surprising coming from the CEO who had insisted that his company could excel where other companies had failed, bragging about creating an “Alien Dreadnought” in the company’s Fremont factory by 2018.
In a recent tweet, Musk acknowledged that “Yes, excessive automation at Tesla was a mistake…To be precise, my mistake. Humans are underrated.”
News from Musk also suggests that Tesla will be profitable and have a positive cash flow in the third and fourth quarters with no need to raise additional money – an important milestone for an incredibly successful company that had still had to rely on investors in order to get the capital they need to get their operations off the ground and ramp them up to a grand scale.
However, it’s important to note that Musk’s optimism about Tesla being profitable later this year should be taken with a grain of salt. Multiple industry analysts have pointed out that one of the contingencies that would lead to this result is the adequate ramp-up of Tesla Model 3 production – an issue that the company has not managed to yet address and which this pause is intended to help fix.
Tesla shares had dipped on Monday, falling 3 percent likely due to Musk’s tweet about the over-reliance on automation. Also potentially contributing to this downfall was a report that alleged Tesla didn’t count some worker injuries, a report which the company vehemently denies, as well as a lawsuit that suggests Musk may have misled investors about the scope of Tesla Model 3 production.
While Musk may certainly be right in his anticipation that the Tesla Model 3 production will ramp back up and Tesla will become a profitable company with a positive cash flow, he has also admitted himself that the company made a misstep when it came to setting up their production line. Robots can do a lot that humans can do – and often times better and more efficiently – but at this point, there’s still no perfect substitute for the human element. Until technology advances to a point that it can adequately replace the critical thinking of humanity, companies like Tesla may learn the hard way that eliminating the majority of human interaction on their production line is a mistake.
While the halt in Tesla Model 3 production comes as a surprise to many, it’s actually not unusual in the automotive industry. By taking this extra time to revisit any issues and address bottlenecks, the slowed production may more than pay off as the future ramp-up continues unimpeded.
