Is it possible that we have put too much faith in the genius of Elon Musk? The man who professes to hold the roadmap to privatizing trips to outer space does not seem to have figured out ground transportation, according to several reports. Tesla’s balance sheets and recent revelations about its reliance upon manufacturing methods that are outdated, to put it mildly, call into question the viability of not only Tesla, but Elon Musk’s credibility as a leader in the tech sector.
Tesla owners tend to be somewhat cult-ish when it comes to their belief that Tesla’s lithium-ion battery powered vehicles are the future of the automotive sector. Much of this belief stems from faith in the vision and reliability of the company’s founder. However, as demand for Tesla’s models S, X, and 3 steadily grew, complaints about persistent, widespread flaws in Tesla vehicles emerged. One Model S owner took to YouTube to voice a litany of fundamental flaws in the vehicle, ranging from a steering wheel that was not oriented properly to misaligned trim on the car’s siding, and several more. Any single one of these issues are ones that should have been caught before the car left the lot, yet for the newer models of Tesla vehicles, such issues upon delivery seem to be the rule, not the exception.
The cars are marketed as luxury vehicles, yet are notorious for creaking and rattling, especially when driven at highway speeds. The Model X, Tesla’s first crossover SUV, was plagued with quality control issues since its release in September 2015. The $138,000 vehicle was appealing in part because of its ritzy features, including Lamborghini-like ‘falcon’ doors. But when those doors cease functioning after only two days of use, money hardly seems well-spent. As Consumer Reports details, the X’s quality issues were widespread and significant.
How could this be?
Due to its reliance upon battery power, Tesla is perhaps the single most subsidized car manufacturer in United States history, thanks to an administration hell-bent on going ‘green’, whatever the costs or lack of results. Even with a $7,500 tax credit per vehicle in place to promote the production and proliferation of supposedly sustainable electric vehicles, Musk and Tesla have continually failed to deliver on their deadlines. The Model 3, a sedan sold for $35,000, offered a more affordable version of the Tesla product, but that affordability has apparently come at the cost of modern means of production.
Much of the government-mandated tax credits were thought to be going toward producing the processes of mass production, but apparently the money has either not been spent wisely, honestly, or is simply not enough to account for the cost and difficulty of mass-producing Tesla’s line of battery-powered vehicles. In early October, it was reported that Tesla’s inability to fulfill completion of 1,500 pre-ordered Model 3s was due to lagging production. A “bottleneck”, as they referred to it. Even with unparalleled taxpayer subsidies masking the production costs of an already expensive line of vehicles, it has been reported that Tesla’s manufacturing processes seem to be derived from the mid-20th century.
'While the car’s production began in early July, the advanced assembly line Tesla has boasted of building still wasn’t fully ready as of a few weeks ago, the people said. Tesla’s factory workers had been piecing together parts of the cars in a special area while the company feverishly worked to finish the machinery designed to produce Model 3’s at a rate of thousands a week, the people said.
Automotive experts say it is unusual to be building large parts of a car by hand during production. “That’s not how mass production vehicles are made,” said Dennis Virag, a manufacturing consultant who has worked in the automotive industry for 40 years. “That’s horse-and-carriage type manufacturing. That’s not today’s automotive world.”’ (Wall Street Journal)
A statement issued by Tesla blamed the Wall Street Journal for smearing the company on a consistent basis. But, the facts say that something is not right within Tesla’s business model and/or operating processes. They reported that in the third quarter of the fiscal year, they were averaging three cars produced per day. That is not what one would call mass production. And, the financials show that Tesla is hemorrhaging cash at a rate of approximately $600 million per quarter, with little progress to show for it. The impending withdrawal of subsidies for electric carmakers put Tesla’s future in serious doubt. The cost of the vehicles, themselves exposed as consistently flawed and near-impossible to manufacture at scale, will surely spike without its tax credits, and members of Tesla manufacturing leadership are already jumping ship.
With far more established vehicle manufacturers such as Volkswagen and BMW announcing the rollout of more affordable, higher-quality “Tesla killers” in the near future, one can only wonder what the future of Tesla looks like. Without a government willing to prop up its unproven means of production and unreliable final products, will Elon Musk’s baby be able to compete with car-making giants who have far more established footholds, means of production, and consumer confidence?