Tesla was for a long time a “product company” – meaning that it focused on creating great products first. It has been quite successful at it with vehicles, like the Model S, winning almost all car awards out there. But CEO Elon Musk has recently shifted the automaker’s focus to manufacturing – saying that the factory itself is probably more important than the product it is making.
Arguably, that’s an area where Tesla still has a lot to prove since several other automakers are capable of manufacturing more vehicles in a month than Tesla has manufactured cumulatively since its inception 14 years ago.
But the shift is fairly recent and we are still not seeing the impact – though it now receives a significant stamp of approval from Tom Mueller, Chief Propulsion Technology Officer at SpaceX, Musk’s rocket company.
Tom Mueller is a rocket scientist who developed the technology that became SpaceX’s Merlin rocket engine and he has been working with Musk for the past 15 years.
He had a Skype call (embedded below) with a group of astronomists at the New York University Astronomy Society earlier this month and he made parallels between Tesla’s and SpaceX’s manufacturing efforts.
Mueller commented on Musk physic’s first principles approach to design and manufacturing products.
When they were trying to figure out how to reduce the cost of the Merlin engine, he had an interesting conversation with Musk who asked how much does he think the Model S cost to manufacture. He described the conversation:
Elon: How much do you think it cost to make a Model S?
Tom: I don’t know. About $50,000?
Elon: No. About $30,000 is the marginal cost to produce that car. How much do you think it weighs?
Tom: About 5,000 lbs?
Elon: Right, about 5,000 lbs. And how much a Merlin engine weigh?
Tom: About 1,000 lbs.
Elon: So why the heck does it cost a fraction of $1 million to make a Merlin engine? I’ll give you a factor of 5 since it is not made of aluminum and it’s not stamped. So why is it 20 times the cost?
That’s Musk’s first principle approach. The materials themselves should be the main limiting factor and everything else in the manufacturing process is fair game and could be completely reinvented.
The engineer added:
“So that’s one of the examples of Elon just really pushing – he always says we need to push to the limits of physics.”
He linked it back to Tesla’s Fremont factory:
“An example I’ll give is on the car factory. You know, a car moves through a typical factory, like a Toyota or a Chevy factory, a car is moving at you know – inches per second. It’s much less than walking speed. And his thoughts are that the machinery, the robots that are building the car should move as fast as they can. They should be moving so fast you can’t see them. That’s why you can’t have people in there because they would get crushed – people move too slow. That’s the way he thinks: “So, what are the physical limits of how fast you can make a car?”
Mueller said that Musk was looking at videos of Coca-Cola manufacturing their cans of soda when researching higher potential for manufacturing speed.
Musk said that he wants to do that with cars – have them move so fast down the line that you can barely see them.
Last year, the CEO said that a 20-fold increase in production speed would be achievable at Tesla’s Fremont factory.
Mueller continued by saying that he thinks Tesla could dominate the industry through Musk’s way of thinking about manufacturing:
“That’s just the way he thinks and nobody else thinks that way. That’s why he is going to kill the industry – because, basically, you can make ten times as many cars in the same size factory if you do it that way. And the major cost of the car is not the material in the car, it’s the factory that builds the car. So, that’s the way he thinks. He looks at it from first principles, like: “Why does a car cost so much to make?” Well, you’ve got this gigantic piece of real estate and all these employees in this gigantic building, and you can only make so many cars in this building. You need to make more cars in the same building with the same number of people. And that’s what they’re working on at Tesla.”
When GM and Toyota were operating the Fremont factory, it had a maximum output of 500,000 vehicles per year. Tesla previoulsy disclosed a similar goal, but Musk said last year that he sees a path to Tesla’s Fremont factory manufacturing up to 1 million vehicles per year.
Of course, Tesla is not the only automaker focusing on manufactruring. Other companies have made great progress in automatisation in recent years. Here’s an impressive 360-degree video of a Ford plant in China:
Though it sounds like Musk is thinking about more than an evolutionary step, but a revolutionary manufacturing project.
He often referred to it as the “alien dreadnought” – because it looks more like something from another world than a factory. Earlier this month, Musk said that the production line of the Model 3 would be the first step toward that but he said that the Model Y factory would be the first real version the “alien dreadnought”.
In order to increase automation and in turn speed of production, they are building it directly into the design of the vehicle – especially through reducing the length of wiring harness. He said that Model S has about 3 kilometers of wiring harness, which Tesla brought down to 1.5 kilometers in length for the Model 3. They aim to bring it down to just 100 meters in the Model Y with a new platform.
Here’s Mueller’s full Skype talk: