Ludicrous: The Unvarnished Story of Tesla Motors

by Edward Niedermeyer

Companies developing autonomous vehicles that had vastly more sophisticated sensor and compute systems than Tesla’s were saying that Level 5 was a fantasy . . . while Tesla continued to collect payments for a Level 5 system.

only Tesla continued on as if nothing had changed until October 2018 when it made Full Self Driving an “off menu option,” without any further explanation.

If you didn’t, the brazenness of Tesla’s ploy to collect money for a feature it couldn’t possibly deliver on raised huge questions about what else the company was bluffing about and what it was really worth .

Tesla’s manufacturing team had been preparing for that challenge, so when Musk publicly committed them to a far more ambitious plan, it hit morale hard. “Impossible is one thing,” one former Tesla manufacturing executive told me, echoing what others had said. “We were used to impossible. This was something else completely.”

But managers who had cheerfully battled through a million manufacturing challenges for Tesla were starting to become increasingly disillusioned with Musk’s inexplicable manufacturing fixations.

The problem was that there was no way to tell Musk no, regardless of whether his latest demands made any kind of sense or not.

The Toyota Production System that the entire auto industry follows (as do most other forms of manufacturing) emphasizes the reduction of all forms of waste as a core guiding value. As a result, car factories move at a deliberate speed that standardizes work processes, allows workers to spot defects, and gives suppliers time to coordinate just-in-time parts delivery, reducing wasteful scrap and parts inventories. Neither time nor factory floor space limits profit margins to a meaningful extent in any modern factory, making them baffling values to optimize for. Moreover, industrial tooling is incredibly expensive, meaning any plan to replace a mass-market car’s entire production system every year or two was a recipe for profound capital inefficiency.

Shifting from a “garage hacker” startup mentality toward the kind of culture Tesla would need to execute Musk’s Model 3 plan could take years—indeed, it had taken the Detroit automakers nearly half a century to reach the point where their quality could compete with Toyota’s.

Musk’s manic deadlines meant that “manufacturing engineers were pressuring us to work on a design that was not yet approved,” according to Tom.

“That black Model 3, that first production one—that Elon said was the first production one? That was a crock of shit,” one former employee told me.

Announcing the start of production before a design is finalized would be unthinkable in the auto industry, but thanks to Tesla’s forgiving customers and constant iteration it seems to have done just that.

Problems ranged from faulty parts to poor integration, with symptoms including faulty charge ports, dome lights delivered with the wrong connection port, misaligned “frunk” (front trunk) trays, and wiring harnesses that had to be recut to fit into cars. But perhaps most troubling were the problems with the one thing Tesla was supposed to be better at than anyone: the battery packs.

When a robot changed paint color, the system would spray excess pigment into a hopper. Paint built up in this hopper, causing paint to back up and leak onto the spray arm. At the same time, overspray caked on the straps that grounded cars during the electrostatic spray sequence, causing sparks to jump off the car and start fires on the paint that had backed onto the spray arm. Fire would then travel up the arm until it hit the mist of paint, turning the sprayer into a flamethrower. “Literally it’s a torch fucking flying around, the paint spraying, the paint’s on fire, scorching the car,” one former paint shop employee remembers.

Though his dedication was popular with fans who imagined him personally solving the company’s problems, employees are nearly unanimous that his presence added more stress than it relieved.

Quality problems showed up from the very beginning, with owners of early cars reporting service bulletins for problems with cracking suspension ball joints, a “battery breather,” front window regulators, touchscreen replacement, and the high voltage controller. Other quality issues that had plagued Tesla’s previous cars showed up as well, including poor panel alignment, inconsistent and poorly placed seals, mismatched and blemished paint, spontaneously cracking glass, and drive unit failures.

By the time the company hit the five-thousand-per-week production goal, its service centers were overwhelmed.

The fundamental tragedy of Tesla’s situation a year after it started Model 3 production was how familiar it was. The company had been here before with every car it had ever made: enjoying all the theoretical demand in the world, but being unable to deliver cars on time, at high quality, and at the promised entry price.

The main difference was that Musk’s hubristic timeline and out-of-touch manufacturing vision had led to this crisis, whereas with the Model S, Tesla was more legitimately struggling with its first real production challenge.

Again and again, automotive innovations quickly shift from competitive advantage to industry-standard equipment.

defines sustaining innovations as “innovations that make a product or service perform better in ways that customers in the mainstream market already value,” which indeed describes the evolution of the auto industry.

Though Tesla is widely portrayed as a “disruptive innovator,” its major innovations are in fact of the sustaining variety.

To truly lead this disruption, Tesla would have to walk away from core brand values—performance, styling, prestige—and reinvent the company around low-cost, highly reliable, shareable pods with an emphasis on its weakest points: interior comfort and durability. The one area where Tesla has had undeniable success, namely creating electric cars with performance and styling that appeals to existing customers, proves that its innovations are sustaining rather than disruptive.

Certainly his bet on electric cars was bigger than anything Musk had attempted up to that point, and it made affordable electric vehicles more widely available than Tesla ever has.

strong demand for Tesla’s status-conferring premium EVs does not translate into strong demand for more modest pure electric transportation appliances.

Saving the planet is great if you look cool in the process, but it becomes a lot less appealing when it means driving a pokey hatchback with modest range.

Whenever premium brands move downmarket, initial demand for their new products is almost always strong because consumers imagine that the new product will be fundamentally the same as the brand’s high-end products.

the same intense cost pressures that made the Leaf what it is will necessarily apply to any other affordable EV. Especially with electric cars, which concentrate a huge percentage of overall vehicle cost in a battery, affordable models demand major compromises in every other aspect of the design, materials, and features.

The lesson of the Model 3, then, is not that Tesla has been able to translate its success at designing and selling high-end cars into the mass market, but that its high-end vehicles were incredibly successful at establishing a desirable brand.

this double down on affordable electric cars is a bet that more global markets will be opened by lowering the cost of EVs with Leaf-like range rather than increasing the range of vehicles at the Leaf’s once-revolutionary $30,000 price point.

Though Tesla played a vital role in driving awareness and excitement to electric mobility, the momentum it created seems to be leaving it behind.

Like Citroën, Tesla created ultra-inspiring products that allowed the masses to glimpse the future . . . while simultaneously unleashing innovation that would ultimately leave it behind.

it does illustrate an important point: the innovator is often a transitional figure. Once the impact of its vision is understood, it often falls to less fanciful and risk-tolerant players to translate the vision into more accessible and prosaic forms.

But when it found itself mired in “production hell,” its answer was to double down on even flashier but farther off prototypes. It was as if Tesla was becoming a parody of itself.

The gargantuan semitruck embodied the company’s lack of focus, branching out into a product class that had nothing to do with the vehicles Tesla made or the markets it served.

Tesla’s board seemed to be overlooking the most fundamental truth of the modern car business: Growth in the good times is only as good as the ability to survive the bad times.

Musk was leading Tesla as if it were a startup looking for a seed round and not a 35,000 employee automaker with hundreds of thousands of deposits for an affordable electric car that was falling ever further behind schedule.

With all of his companies struggling to deliver on colossal promises, Musk’s long and escalating pattern of defamatory attacks on critics increasingly made him seem less like an altruistic visionary and more like a thin-skinned, egotistical hype man lashing out at encroaching accountability.

Musk would be barred from serving as Tesla’s chairman for three years, both he and Tesla would pay $20 million each in fines, two new independent directors would be added to Tesla’s board, and a committee would be established to supervise Musk’s communications with investors and the public.

The Model 3’s massive preorders had goaded Musk into the wildly ambitious manufacturing plans that created “production hell.” Now it seemed that the same preorders had led him to overestimate ongoing demand.

In spite of his reputation as a far-sighted futurist visionary, Musk seemed to be running Tesla on a week-by-week basis and impulsively announcing decisions that had to be promptly walked back once their full implications were understood.

Tesla runs into one of the auto industry’s brutally tough challenges and Musk coming up with a rescue that looks heroic to his fans and desperate to his critics.

Once upon a time, consumers would have to do extensive research to make sure that they bought a car that was appealing, affordable, and reliable. Now that all cars are competitively benchmarked to the point of homogeneity, the hardest task car buyers face is not avoiding a lemon but picking a car that stands out from the crowd.

It’s not clear what tests Tesla subjected its screens to when qualifying them for use in their cars, but we do know that the Innolux G170J1-LE1 they use in Model S and X is an industrial screen whose initial specs were not up to basic “automotive grade” standards. Located under a large glass roof, and with multiple processors and a heater core packed behind it in the dash, Tesla put the G170J1-LE1 in a thermal sandwich it wasn’t designed for.

Sure enough, Tesla owners have reported problems with their seventeen-inch displays that strongly suggest chronic thermal overload.

On one hand, the steady flow of new features and software updates seems like such an obvious improvement of cars. Yet on the other, this can also make cars as unstable and finicky as smartphones,

But the reason automakers choose to use proven technology and automotive-grade components, and then spend years validating them before selling to customers, is that cars are fundamentally safety-critical systems.

The inherent danger of driving is also why other automakers haven’t fully eliminated buttons and knobs to make their cars look more like smartphones. Unlike a phone, the ability to operate a car’s controls without looking at them can be a matter of life and death.

for most automakers those advantages aren’t worth the risk of an interface that requires drivers to take their eyes off the road.

Making cars more like smartphones is one of those ideas that sounds appealing in theory, but it keeps running into the same inconvenient reality: cars are not smartphones.

But there’s also a significant difference between technology for the sake of technology and technology that is applied to real problems. Is Tesla really solving a problem, or is the entire company like the giant screen in its cars: a shiny object that’s perfectly designed to tap into the hopes and anxieties of our particular historical moment and not much else?