Elon Musk has set an aggressive new target for production of the Model 3, and it will operate its Fremont, California factory 24 hours a day in order to meet the goal, according to an internal email obtained by Jalopnik.
Musk now says Tesla needs to make 6,000 Model 3s per week by the end of June, an increase of the company’s previous target of 5,000 per week. The reason for the new target, he says, is that 5,000 Model 3s per week leaves the company with “no margin for error” across the company’s manufacturing process and supply chain. “Actual production will move as fast as the least lucky and least well-executed part of the entire Tesla production/supply chain system,” he writes.
To accomplish these production numbers, Musk says Tesla is first stopping work at the Gigafactory today, and tomorrow at Fremont, for three to five days. The company will use this time to perform a “comprehensive set of upgrades” that will allow it to get to production rates of 3,000 to 4,000 per week in May.
Tesla will also hire “400 people per week for several weeks” at both the Fremont facility and the Gigafactory in Nevada. The extra bodies will help the company add an extra shift of work for “general assembly, body and paint,” allowing it to produce Model 3s around the clock. “Please refer anyone you know who you think meets the Tesla bar for talent, drive and trust,” Musk says. A spokesperson for Tesla declined to comment.
Tesla will need to scramble to reach a rate of 6,000 Model 3s per week, Akshay Anand, executive analyst at Kelley Blue Book, tells The Verge. “A fast pace, however, is the enemy of quality, and Telsa needs to plan for quality first, volume second,” he says. “For many consumers, this will be a first touch point with Tesla, so the company needs to ensure the touch point is a positive one.”
Musk draws a number of hard lines in the sand in the email for his employees, contractors, and suppliers. In one section, titled “Precision,” he writes that Tesla “will keep going until the Model 3 build precision is a factor of ten better than any other car in the world. I am not kidding.” If parts suppliers buck at this, he says, Tesla should move on from them. “I understand that this will be considered an unreasonable request by some,” he writes. “That’s ok, there are lots of other car companies with much lower standards. They just can’t work with Tesla.”
In another section, labeled “Profit,” Musk says the company is clamping down on company expenditures. “I have asked the Tesla finance team to comb through every expense worldwide, no matter how small, and cut everything that doesn’t have a strong value justification,” he writes, before likening the contractors Tesla uses to Russian nesting dolls.
Open-ended contracts create “an incentive to turn molehills into mountains, as they never want to end the money train,” he adds. “There is a very wide range of contractor performance, from excellent to worse than a drunken sloth.” He says the week ahead will be contractors’ last chance to “demonstrate excellence” or their contracts will be ended.
Musk also tells employees to trim unnecessary meetings, skip the “chain of command” when it comes to communication, and to “pick common sense as [their] guide” instead of following company rules that seem ridiculous.
The new targets and ultimatums dished out today by Musk come at a precarious time for Tesla. The company recently missed its own goal of producing 2,500 Model 3s per week at the end of the first quarter — a goal that had already been lowered and delayed from the fall. It faces renewed scrutiny over the safety of Autopilot after a driver recently died while using the semi-autonomous feature. And this week, Reveal and The Center for Investigative Reporting published an investigation into Tesla’s workplace safety practices at its Fremont factory — the third such investigative piece in the last year, following similar reports from BuzzFeed and The Guardian.
Update April 17th, 6:25PM ET: Added comment from Akshay Anand.