Friday, July 13, 2018

"‘The Last Bet-the-Company Situation’: Q&A With Elon Musk" (TSLA)

From Bloomberg, July 13:

An in-depth conversation with Tesla’s chief executive on his scars from a year in hell and trying to be nicer on Twitter.
Elon Musk has been tweeting a lot over the past few months.

As Tesla Inc. lurched toward a Musk-imposed deadline to build 5,000 Model 3 electric sedans in a week, the chief executive lashed out against a wide group of people he came to see as his company’s detractors. Journalists, Wall Street analysts, short sellers, labor unions and even federal crash-safety investigators found themselves on the receiving end of his prolific Twitter output. He knows it needs to stop.

“I have made the mistaken assumption—and I will attempt to be better at this—of thinking that because somebody is on Twitter and is attacking me that it is open season,” he said in an hour-long interview with Bloomberg Businessweek for this week's cover story. “That is my mistake. I will correct it.”

Musk’s stress-fueled Twitter barrage peaked in June with 86 posts. It was a stretch he describes as the most excruciating of his life. In a way, his seemingly unfiltered Twitter output became one of the clearest outwards signs of his inner turmoil—and the pressure felt by the entire company. “It's been super-hard,” he says. “Like there is for sure some permanent mental scar tissue here.”

This was the third time Musk felt he had to risk the very existence of Tesla. “Basically, I believe Model 3 is the last bet-the-company situation,” he says. “We will still need to work hard and be vigilant and not be complacent because it is very difficult just to survive as a car company. But it will not be the same level of strain as getting to volume production of Model 3.”

Musk spoke to Bloomberg Businessweek on July 8, taking a break on Sunday from testing a miniature submarine meant to aid the rescue of children trapped in a cave in Thailand and ahead of a trip to Shanghai two days later, where he would announce plans to build a second Tesla factory. He reflected on hitting his weekly production goal of 5,000 Model 3 sedans—5,031, to be exact—as well as his mistakes and the electric automaker’s next projects. What follows is an edited transcript of the conversation.

Tell me about what the last week before reaching 5,000 was like in the factory. Paint a picture for me.
Well, I spent almost the entire time in the factory the final week, and yeah, it was essentially three months with a tiny break of like one day that I wasn't there. I was wearing the same clothes for five days. Yeah, it was really intense. And everybody else was really intense, too.

I think there was quite a good esprit de corps. People were pretty fired up. You can see it in the pictures that people posted. You can tell from looking at people's faces. But everybody was super gung ho to make the number and to make sure that they could do it. We had a lot of challenges.

Like what kind of challenges?
You don't really know that you can actually handle a given rate unless you try to do it. So we successively hit limitations in general assembly, in paint, in body, in module production, pack production, logistics. Even the flow of parts from the warehouse. We've never had that kind of flow before. At one point we would make like 100 cars without the right headlamps, and then subsequently put the right headlamps on because the right headlamps didn't arrive from the warehouse in time. They were put on after general assembly.

Why push so frantically? What did you feel was at stake?
Well, I think we had to prove that we could make 5,000 cars in a week—5,000 Model 3s and at the same time make 2,000 S and X’s, so essentially show that we could make 7,000 cars. We had to prove ourselves. The number of people who thought we would actually make it is very tiny, like vanishingly small. There was suddenly the credibility of the company, my credibility, you know, the credibility of the whole team. It was like, “Can you actually do this or not?”

There were a lot of issues that we had to address in order to do it. You know, we had to create the new general assembly line in basically less than a month—to create it and get to an excess of a 1,000-cars-a-week rate in like four weeks. We had to get the Module Zone 4 [a line of robots] transferred from Germany and installed in two weeks. Both of those things I was told were impossible.

What's the long-term plan for that new assembly line inside the tent? I think the confusing thing for most people is that you now have two apparently different processes producing the same car, one with more humans and one with more automation.
A lot of the hoped-for automation was counterproductive. It's not like we knew it would be bad, because why would we buy a ticket to hell? We don't actually want to go for hell. We just didn't realize it was a ticket to hell. We thought it would be good, but it was not good. That applies to a great deal of the automation. A whole bunch of the robots are turned off, and it was reverted to a manual station because the robots kept faulting out. When the robot faults out—like the vision system can't figure out how to put the object in—then you've got to reset the system. You've got to manually seat the components. It stops the whole production line while you sort out why the robot faults out....