Tesla's big issue is battery production, but this robot thing didn't help. Tesla's affordable Model 3 has been trapped in development hell for what seems like ages now, and in an interview with CBS's Gayle King, CEO Elon Musk offered a little more insight into how the production process has fallen short. While escorting King through the company's Fremont, California-based factory, Musk conceded that Tesla might've been too many robots involved in its car production process and that the company would benefit from having more humans on the line. And when King opined out loud that in some cases, said robots probably slowed down production , Musk responded with a terse "yes, they did." Musk didn't get to elaborate on the complexities of his factory setup, but he did point out one particular failure: the facility at one point used a "crazy, complex network of conveyor belts, and it was not working so [Tesla] got rid of the whole thing." That Musk would've chosen to rely on a highly automated facility is little surprise. During a shareholder meeting in 2016, he excitedly noted that he thinks of the factory itself as a product with the potential for tremendous breakthroughs. "We realized that the true problem, the true difficulty, and where the greatest potential is – is building the machine that makes the machine," Musk said. "In other words, it's building the factory." Musk's plan to craft the machine that builds machines only picked up steam when Tesla acquired Perbix, an automated manufacturing company that Tesla had long-running business ties with. While the move allowed Tesla to being more component production in-house, it might have caused still more problems -- Tesla temporarily suspended Model 3 production for a week in February in part to "improve automation. " It seems clear that Musk hasn't yet struck the right balance between machines and the roughly 10,000 human workers at the Fremont factory. Just to be clear though, a surfeit of robots isn't the only reason Tesla has consistently fallen short of its production goals. On the company's most recent earnings call, Musk candidly pointed out that issues with battery module production at the company's Gigafactory in Nevada was the "limiting factor" in Model 3 output. "We were probably a little overconfident, a little complacent, in thinking this is something we understand," he said at the time. "We put a lot of attention on other things and just got too comfortable with our ability to do battery modules, because we've been doing that since the start of the company."
In a rare mea culpa for the mercurial billionaire, Tesla CEO Elon Musk acknowledged that the company has been too reliant on robots for production. Yes, excessive automation at Tesla was a mistake. To be precise, my mistake. Humans are underrated. Excessive automation at Tesla was a mistake, Musk wrote, responding to a Wall Street Journal reporters tweet. Humans are underrated. He also talked about this with CBS News Gayle King, adding we had this crazy, complex network of conveyor belts ….And it was not working, so we got rid of that whole thing. Tesla has faced mounting public pressure amid a production slowdown for its Model 3, its lower-priced car. The company recently revealed that it missed its target to produce 2,500 cars a week, disappointing investors. The uncertainty has resulted in a volatile stock. A month ago shares were trading at $340 and then slid to $252. Things have started to recover now that Musk says the company will be profitable and cash flow positive in the third quarter. This was also revealed in a tweet that Musk wrote to The Economist on Friday. 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. Theres no need to raise money, he added. Shares closed Friday at $300.34. The company has a market cap of $50.7 billion. By comparison, Ford Motors has a market cap of $45 billion.