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Power Transportation Businesses Technology

Tesla Employees Say Gigafactory Problems Are Worse Than Known (cnbc.com) 184

An anonymous reader quotes a report from CNBC: Tesla's problems with battery production at the company's Gigafactory in Sparks, Nevada, are worse than the company has acknowledged and could cause further delays and quality issues for the new Model 3, according to a number of current and former Tesla employees. These problems include Tesla needing to make some of the batteries by hand and borrowing scores of employees from one of its suppliers to help with this manual assembly, said these people. Tesla's future as a mass-market carmaker hinges on automated production of the Model 3, which more than 400,000 people have already reserved, paying $1,000 refundable fees to do so. The company has already delayed production, citing problems at the Gigafactory. On Nov. 1, 2017, CEO Elon Musk assured investors in an earnings call that Tesla was making strides to correct its manufacturing issues and get the Model 3 out. But more than a month later, in mid-December, Tesla was still making its Model 3 batteries partly by hand, according to current engineers and ex-Tesla employees who worked at the Gigafactory in recent months. They say Tesla had to "borrow" scores of employees from Panasonic, which is a partner in the Gigafactory and supplies lithium-ion battery cells, to help with this manual assembly. Tesla is still not close to mass producing batteries for the basic $35,000 model of this electric sedan, sources say.
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Tesla Employees Say Gigafactory Problems Are Worse Than Known

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  • by Hognoxious ( 631665 ) on Saturday January 27, 2018 @09:09AM (#56014279) Homepage Journal

    It's a 10^9 factory, but they were expecting 2^30?

  • by pablo_max ( 626328 ) on Saturday January 27, 2018 @09:17AM (#56014293)

    How is that different than every other company in the world? I have worked with and for at a lot of places over the years and one thing is universal, most of the people have no idea at all what they are doing.
    It is amazing to me that some companies are even able to put products on the market at all. I am not talking only about the small guys either.
    I was once testing a wireless product for one of the largest companies in Europe for global radio certification (FCC/ISED/CE and many others). Once I got the devices I told them.. hey, thanks a lot for sending these samples, but it would be great if you could send them with a SMA connector so we could test the radios as well.
    What is a SMA connector, was the response. After explaining it a couple of days went by and they called me up and explained that the guy who knows how to do that quit the company so it would be better if we changed the design for them to make it work.
    Of course this kind of shit happens ever every company every single day. These are not things which people know about it.
    So, you can say that 100% of companies are shittier than people on the outside know about.

    • Re: (Score:3, Insightful)

      by tomtomtom ( 580791 )
      It's different because most companies realise this and try to underpromise and overdeliver publicly. Tesla has a track record of doing the opposite. And the stakes are also a lot higher than usual - the company's survival could depend on this single product.
      • Re: (Score:2, Insightful)

        So, Tesla is different from IBM, Microsoft, nuclear power plant builders, defense contractors, food chains with their polished ads, etc. etc. when it comes to promises vs. deliveries? I guess I haven't noticed that...
      • by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Saturday January 27, 2018 @10:06AM (#56014433) Homepage Journal

        It's different because most companies realise this and try to underpromise and overdeliver publicly.

        It's different because Tesla is operating on hype. Every other car company teases designs, but they only make actual claims about performance and scheduling when they are absolutely sure they can meet them. Tesla can lose money and the stock goes up, traditional automakers have to turn a profit just to keep it flat. But Tesla will die just as soon as the buzz does. If all the unpaid Tesla promoters like Rei stopped doing the work they're doing on behalf of Tesla, the company would fold up like a cheap magazine, because Wall Street would stop rewarding them for losing money.

        • >> It's different because most companies realise this and try to underpromise and overdeliver publicly.

          > It's different because Tesla is operating on hype

          Oh my. I'd agree that most companies realize this, but I've dealt with many startups and some very large companies that are operating on hype. They're not good long term customers, or partners, but they're certainly not rare.

        • by Anonymous Coward

          The difference is that Tesla always delivers, just slower than anticipated. All companies miss their deadlines. Most companies deliver over hyped products. Tesla always delivers what it promises. Reviews are consistently positive on their products. That's the difference

          • by Solandri ( 704621 ) on Saturday January 27, 2018 @03:43PM (#56015865)
            Tesla is deliberately delaying the Model 3. CARB (California Air Resources Board) created a ZEV mandate [ca.gov]. A certain percentage of each car company's sales have to be ZEV - zero emissions vehicles. Right now that's almost entirely EVs (Toyota has a hydrogen fuel cell vehicle on the market). The percentage increases each year - the details are a bit complex [ucsusa.org] but bottom line it's about 2% for 2018. If an automaker fails to reach the required percentage, they have to buy ZEV credits from an automaker which exceeded it. If they fail that too, they are banned from selling cars in California and the approx dozen states which automatically adopt CARB's guidelines. That's about 1/3 of the U.S. by population.

            Since Tesla produces only EVs, they always have excess ZEV credits. Part of their finances is selling those ZEV credits. But the closer the other automakers come to meeting their ZEV requirement in a year, the lower the price for ZEV credits. So if Tesla produces too many EVs in a year in which other car companies sold enough of their own EVs, they get little to nothing for their ZEV credits, and they have to bear a larger fraction of the Tesla 3 production cost themselves.

            You can tell how well EVs are selling by how good the discounts are at the end of the year. 2015, sales were really poor (relative to the ZEV mandate that year) and there were incredible discounts on EVs (in California - the only state where CARB counts sales/leases). Dec 2015 I almost picked up a 3-year lease on an e-Golf for $79/mo, no money down (there was also a $49/mo with $1500 down offer, but that's more money overall). The EV deals in late 2017 were close to nonexistent, which is a pretty good indicator that the automakers were hitting their ZEV mandate percentages. That means there wasn't much of a market for ZEV credits in 2017, which meant Tesla had to delay Model 3 production to try to push some of those credits into 2018. And that's exactly what they did.

            The problem for Tesla is that they set the pre-order price of their EVs based on assumptions for how much they'll receive for selling the ZEV credits. If the other automakers consistently hit their ZEV percentage every year (or come close to it), Tesla is in a world of trouble - all those Tesla 3 pre-orders could have been "sold" for less than what it cost to manufacture because they'd assumed selling the ZEV credit would've made up the difference. So paradoxically, the better EVs sell, the worse off Tesla is financially.
        • by Socguy ( 933973 ) on Saturday January 27, 2018 @11:49AM (#56014709)
          Meh. A handful of fired employees saying bad things about their former employer... A bunch of short sellers on Wall Street currently in line to lose BILLIONS after shorting Tesla stock for months only to see the stock shoot up... not surprised at all to see a hatchet job like this.
          • Most automakers run on new models, not merely hype. Studies have clearly shown that consumers prefer to buy the latest thing, even if it's not necessarily the best. Of course, automotive technology moves rapidly enough that the latest thing often is better, so there is that. Tesla is running on the promise of delivering things, not on actually delivering things. Maybe they'll get production up soon and change that, but the fact is that only a tiny minority of Tesla fans actually have a Tesla at this point.

        • Automakers not hyping things up is actually new to the industry. One they learned from Honda & Toyota. It wasn't until "car salesman" became worse than "snake oil salesman" that they started toning down. And it took 10 years of being beat the shit out of by Japanese car makers that they really became humble.

          When Ford made their first few years worth of mass assembled cars, they were sold with missing windows, door locks, horns, etc. They just told the buyer to bring it back later for repair. Again it to

      • It's different because most companies realise this and try to underpromise and overdeliver publicly.

        Wow, you've never read a corporate statement that wasn't tweeted by a CEO. Maybe you should actually read a company's quarterly report at some point and you'll realise that there's not a single company out there that underpromises anything.

    • by swb ( 14022 ) on Saturday January 27, 2018 @09:35AM (#56014349)

      I think it's getting worse. We seem to have a growth in the amount of complexity of things individually and an increasing number of them, combined with a corresponding lack of investment in training.

      As one kind of an example, an IT department 15 years ago had simpler networks, servers and software to manage. Now each of those things is much more complex than it used to be but the number of people managing it is the same and they probably don't know any more details than they did when it was simpler. High level management (virtualization, etc) may have made managing larger breadth easier, but I think the individual complexity has been addressed at all and lots of it is essentially not understood.

      • by nnull ( 1148259 )

        "I think it's getting worse. We seem to have a growth in the amount of complexity of things individually and an increasing number of them, combined with a corresponding lack of investment in training."

        It sure is getting worse. Every employee I get has serious lack of training in everything. A lot of companies have thrown training out the door because of "costs", but not realizing that it's making our labor pool worse overall and increasing costs overall upon everyone. I train my employees, but I'm just a

        • by swb ( 14022 )

          So much skill development is just kind of dumped on employees who its assumed will just pick it up on their own. Some of that is OK, but there's a point (reached quickly) where it's just not practical or effective -- the technology is too complex to simulate/emulate without expensive hardware, too often there's little practical knowledge gained without practical production situations and workloads, way too much "certification" which just winds up being an exercise in memorizing a vendor's marketing buzzwor

    • I came to the same startling conclusion after talking to a "PhD" mechanical engineer at a medium sized contract manufacturer and discovering they couldn't explain the technical side how a hammer works.
    • Another "funny" story, my company got asked by a Japanese manufacturer wether we can deliver a pinyin entry method for a device to be released in Taiwan. I replied that we could, but, surely, they'd want bopomofo/zhuyin instead, since that is what people use in Taiwan. They went ahead and ordered a pinyin instead. Somewhere late in the process, they told us that they sent a sample to their Taiwan office and it was asked for it to be switched to bopomofo/zhuyin because they don't use pinyin in Taiwan...

    • by JBMcB ( 73720 )

      GM built it's own battery factory. Practically nobody knows about it. They make all of their own battery packs for their hybrid and pure EV vehicles. It came on-line on time and roughly at capacity.

      GM hasn't run a large-scale battery operation like this but it managed to figure it out. Building the factory in an area already saturated with large factory operations probably helped out a bit. Building a factory in the middle of the desert, where the nearest, largest factory builds slot machines, probably is a

      • by dgatwood ( 11270 )

        Building the factory in an area already saturated with large factory operations probably helped out a bit. Building a factory in the middle of the desert, where the nearest, largest factory builds slot machines, probably is a hindrance.

        The location of Tesla's factory actually makes a lot of sense. It's an area with relatively low cost of living, which means they can pay workers less. It is not too far from their manufacturing plant (in Fremont), so transportation is minimized. That manufacturing plant in

    • by nnull ( 1148259 )

      "What is a SMA connector, was the response. After explaining it a couple of days went by and they called me up and explained that the guy who knows how to do that quit the company so it would be better if we changed the design for them to make it work."

      That's because a lot of companies basically ride on the back of one person that they abuse to hell. Usually, it's the only person there that can keep said company alive. From the owners to all the management depending on this one person. I know, because I s

  • by Anonymous Coward on Saturday January 27, 2018 @09:35AM (#56014347)

    I think maybe the worst part of Tesla is that nobody knows how to make a lot of vehicles efficiently and be profitable. Critics have said all along that Tesla needed someone in manufacturing that knew how to build cars. Instead Musk rejected this ideal and went it alone and it shows. Obviously critics said the real test for Tesla would be how it handle's the Model 3 production schedule. Its very clear from reports that they bit off more then they could chew.

    • by K. S. Kyosuke ( 729550 ) on Saturday January 27, 2018 @09:43AM (#56014379)
      And how would employing more people who know how to build cars in particular help overcome problems with building a battery factory? I mean, besides their generic manufacturing experience.
      • I mean, besides their generic manufacturing experience.

        That alone would be quite an improvement compared to the present situation.

      • Wasn't Panasonic invited to the gigafactory party to provide the manufacturing expertise that Tesla lacks? I'm not sure Panasonic knows much about cars, but when it comes to making batteries, this is not their first rodeo.

        • Presumably, since Tesla was building its own battery packs but Panasonic was providing the cells, the responsibilities are still similar, both parties contributed what they were good at.
      • They can't make cars either. The few Model 3s coming off the line look like they've been assembled with sledge hammers, and the Model X is the least reliable car on the market. Their cars are riddled with problems that buyers accept because they're fanboys. Why even promise you're going to sell cars when you don't even know if you can make the batteries?

  • ...as long as Gigafactory batteries are not composed *of* Panasonic employees.

  • Building the first factory is the hardest part about building factories. Once you've built it, you can build 200 more just like it in a fraction of the time.

    In the meantime a worker complains about not being replaced by a machine?

    • by drinkypoo ( 153816 ) <martin.espinoza@gmail.com> on Saturday January 27, 2018 @10:08AM (#56014439) Homepage Journal

      Building the first factory is the hardest part about building factories. Once you've built it, you can build 200 more just like it in a fraction of the time.

      Except nobody builds lots of factories all the same. Automakers for example build different factories with different lines to produce different vehicles. The building is not the interesting part, the production line is. And the production lines are different for each vehicle. Also, by the time you've got the first factory completed, new techniques have been developed, and new equipment has hit the market. Maybe you've been just welding all your cars together, and now you're starting to use structural adhesives. Now you're going to change the line again.

      • Except nobody builds lots of factories all the same.

        Battery makers do.

        • Except nobody builds lots of factories all the same.

          Battery makers do.

          Cell makers do, maybe. MAYBE. That's assuming that manufacturing techniques haven't improved since the last time they built a factory. But people making actual batteries are going to be making new and different production lines just like automakers are — when we're talking about EV batteries. The battery packs are changing rapidly enough that they will require different assembly techniques. And new battery chemistries are coming faster than ever before, now. Some chemistries are baked, some aren't. S

      • Except nobody builds lots of factories all the same. Automakers for example build different factories with different lines to produce different vehicles.

        Actually plenty of people do. Especially since we're not talking about Automakers here but rather makers of generic lithium battery cells, anticipated as being the most sought after product in the coming years.

    • by Khyber ( 864651 )

      "Once you've built it, you can build 200 more just like it in a fraction of the time."

      I can tell you've never done a plant opening or shut down, let alone worked in any sort of actual construction. None of what you said is even remotely true.

      Go take your ass to Galveston and do a few plant openings. Let's see that 'fraction of the time' you're talking about.

      Protip: We won't see it ever.

    • by PPH ( 736903 )

      From the point of view of the batteries alone, manufacturing 18650s should be a solved problem. Particularly with Panasonic in the loop.

  • by aaarrrgggh ( 9205 ) on Saturday January 27, 2018 @10:17AM (#56014465)

    Those things are already well known; apparently they didn’t hit their stride until the end of December, where they were at a rate of 1000 model 3’s per week in the last three days. Timing now seems designed to hit the stock before earnings.

    Also, the base $35k model is a random reference... of course the lowest margin version will be last.

    Based on the fact that I have seen a few model 3’s on the road this past week (first ones for me), I am guessing production is consistent now and possibly accelerating beyond 1,000/week.

    • I agree, I'm pretty sure things are accelerating pretty rapidly.

      I took delivery of my model 3 last week. When I was taking delivery in Bellevue I met a couple employees who were flown in from Texas to help out with the increased load. (They are moving from West to East in deliveries.)

      There were at least 5 or 6 other Model 3s in the delivery area waiting for pickup.

      I have 2 friends who have also gotten their notifications to do configuration of their orders. (It took about 2.5 weeks from when I got the not

  • by QuietLagoon ( 813062 ) on Saturday January 27, 2018 @10:20AM (#56014471)
    Companies always have internal problems that are not known outside the company. Companies also have management in place to address and resolve those problems. In a start-up situation, it is one problem after the other, sometimes many at once. If it weren't Tesla, it'd be a non-issue.
  • Automation engineering is a science. The time Tesa 'estimated' was woefully wrong, but those saying it's impossible or that Tesa will never make this viable may well be eating their own words soon.
    • by PPH ( 736903 )

      Perhaps Tesla should have selected (or produced) a battery design more amenable to automation and close packing in battery banks with serious cooling requirements. Too many design teams just toss their work over the wall to manufacturing and QA, expecting them to solve problems that never should have arisen in the first place.

  • by Qbertino ( 265505 ) <moiraNO@SPAMmodparlor.com> on Saturday January 27, 2018 @11:37AM (#56014675)

    I wouldn't be surprised if this weren't some hidden PR bullshit being spread by the competition. Do you remember the blatant lies about the first tests on the model s that were quickly debunked by the data provided by the test models? This has very much the same smell. There are reports of paid goons renting Teslas and deliberately mistreating them to put them out of service. This article is along these lines IMHO.

    I'd trust Tesla and Musk more than I'd trust any news outlet, that's for sure.

  • by sootman ( 158191 ) on Saturday January 27, 2018 @12:29PM (#56014865) Homepage Journal

    I think a bigger story would be "Company is pushing the envelope and nothing goes wrong at all."

    • things going wrong with new processes should be expected. The problem here is Tesla make promises and statements assuming nothing will go wrong. They seem to have missed some basic PR and project management classes.
  • Tesla was still making its Model 3 batteries partly by hand

    I guess the robots aren't taking over, are they? You'd almost think that success at one specific repetitive task doesn't transfer to success at a completely different repetitive task.

  • I follow quite a few finance people on twitter and at least once a week I see a breakdown of how Tesla are totally doing things entirely wrong, particularly in regards to money management.

    I can tell you that every time the stock price goes near 300 Elon will tweet something or have a conference announcing something and it quickly recovers, this seems to happen over and over.

    Iâ(TM)m certainly not going to attribute the issues to malice, perhaps inexperience. Honestly it would be good if Tesla is succes

  • This is what was happening in November, but the issues have since been resolved.

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