Elon Musk says Tesla relied on too many robots to build the Model 3, which is partly to blame for the delays in manufacturing the crucial mass-market electric car. In an interview with CBS Good Morning, Musk agreed with Teslas critics that there was over-reliance on automation and too few human assembly line workers building the Model 3. Earlier this month, Tesla announced that it had officially missed its goal of making 2,500 Model 3 vehicles a week by the end of the first financial quarter of this year. It will start the second quarter making just 2,000 Model 3s per week, but the company says it still believes it can get to a rate of 5,000 Model 3s per week at the midway point of 2018. Previously, Tesla has blamed bottlenecks in the production of the Model 3s batteries at the companys Gigafactory for the delays. But in a wide-ranging (and largely positive) interview with CBSs Gayle King, Musk also admits it was Teslas over-reliance on robots in the production. Musk then said the company needs more people working in the factory and that automation slowed the Model 3 production process. He alluded to a crazy, complex network of conveyor belts the company had previously used and said the company eliminated it after it became clear it wasnt working. Its a fairly stunning admission from the man who previously likened his companys massive factory to an alien dreadnought thanks to the complex assemblage of advanced robotic arms building its line of electric cars. In an earnings call with investors last year, Musk spoke about the production speeds facilitated by Teslas robots. Its remarkable how much can be done by just beating up robots ... adding additional robots at choke points and just making lines go really, really fast, he said. Speed is the ultimate weapon. Last year, Tesla acquired Perbix, a private machining firm that makes automated equipment for factories, allowing the carmaker to bring the production of more parts in-house. Tesla described the deal as a step further in its long-stated ambition to build the machine that makes the machine. In fact, Musk was so confident that Tesla had gotten right the mix of robots and humans that its giant Gigafactory would become the companys ultimate product. The competitive strength of Tesla long-term is not going to be the car, its going to be the factory, he said last February. Were going to productize the factory. Musk is also one of the foremost voices urging caution in the development of robotics and artificial intelligence. He has called for governments to regulate AI to prevent the technology from threatening human existence, and has warned for a coming AI apocalypse. Also in the interview, Musk said the Model 3s technical complexities were additionally to blame for the companys ongoing production hell. We got complacent about some of the things we felt were our core technology, we put too much new technology into the Model 3 all at once, Musk said. A spokesperson for Tesla declined to clarify Musks comments. While aesthetically more minimal than the Model S or X, the Model 3 uses 2170 lithium-ion battery cells, which are more complex than the industry-standard 18650 battery cells used in the Model S and X. Musk previously confirmed that Teslas Gigafactory 1 in Nevada was the source for the production bottlenecks slowing Model 3 deliveries. Panasonic, Teslas battery cell manufacturing partner at the factory, has also confirmed this. To be sure, Musk has used the too much technology excuse before. In 2016, he owned up to the problems with production of the Model X, telling an audience of Tesla shareholders, This [Model X] program has been challenging. I particularly need to fault myself for a fair bit of hubris for putting too much technology all at once into a product. The Model 3, he said, would not have as much technology as the Model S and X. Now Musk said he has taken over production of the Model 3, sleeping at Teslas Fremont factory in an effort to keep tabs on the vehicles rollout. In the interview, he shows King the conference room where he sleeps. A pillow and sleeping bag can be seen in the shot. King calls the couch not even [...] comfortable.
Tesla is one of the more interesting companies for Wall Street that had an interesting couple of months this year — and it seems even tweets from Elon Musk, who said that the company will be profitable in the back half of the year, may be enough to swing its stock. The Tesla and SpaceX founder sent a tweet very early this morning that the company would be profitable and cash-flow positive in the third and fourth quarter this year. Tesla is known for setting ambitious targets and forecasts, especially as it looks to ramp up Model 3 production to around 2,500 vehicles per week. Musk said he took direct control of Model 3 production earlier this month in a note to employees, also sent out at around 3 a.m. pacific time. Teslas shares were up slightly, gaining around 2% in trading today. The Economist used to be boring, but smart with a wicked dry wit. Now its just boring (sigh). Tesla will be profitable & cash flow+ in Q3 & Q4, so obv no need to raise money. Tesla saw a small bump in its stock throughout the day. While it could be for a variety of reasons, Musks data point may have offered a small amount of clarity (and optimism) around whether the company will be able to eventually turn a profit. The tweet was fired off as a response to a story by The Economist that said the company may have to raise additional capital at some point, according to banking firm Jeffries. (It was also quite snarky.) On Teslas last call to discuss the companys quarterly results with Wall Street analysts, Musk said that the company would begin generating positive quarterly operating income on a sustained basis, and said he was cautiously optimistic that the company would be GAAP profitable. Musk said the company wanted to hit a production target of 5,000 Model 3 vehicles per week at some point in 2018, though did not give a specific time frame. The tweet, while fired off as a response to a story by The Economist, appears to offer another small data point as to when it might happen. Earlier this month, Tesla fell back behind Ford in terms of its market cap as some pressure has hit the stock. Tesla has had to address a fatal crash involving its autopilot, in addition to a voluntary recall of 123,000 Model S vehicles. There is some skepticism around whether Tesla will hit its production targets from Wall Street (making cars is hard, it seems).