Newly leaked internal documents show that Elon Musk’s Tesla continues to face production woes, with only 14 percent of cars passing first inspection, as opposed to industry targets of 80 percent.
Business Insider recently reported on leaked internal Tesla documents which show that the company had to rework more than 4,300 of the 5,000 Model 3 vehicles that it manufactured in the first week of June, when the company announced that they had reached their self-imposed production milestone. Tesla reportedly reworked 4,300 cars during the week of June 23 with each car taking an average of 37 minutes to repair.
Car manufacturers refer to cars that exit the manufacturing process without requiring any rework as part of the production lines “first pass yield,” (FPY) this means that during the week in which Tesla claimed that they had successfully produced 5,000 Model 3 vehicles, only 700 cars could truly leave the factory. In simpler terms — only 14 percent of Model 3’s produced by Tesla that week required no additional work before being sent to customers. In the same week, Tesla CEO Elon Musk reportedly told workers to stop performing a critical brake test as the company rushed to produce cars in a tent they had erected in a field outside their production facility.
Ron Harbour, a consultant at Oliver Wyman and the founder of “The Harbour Report,” a worldwide guide to manufacturing, commented on Tesla’s first pass yield rate stating: “A competitive plant will pass 80%-plus vehicles that do not require repair. I would say the average plant is about a 65-80% range.” Harbour also stated that the amount of rework required per vehicle can affect the production plant’s overall productivity saying: “It’s a direct impact on their labor productivity if they have to add additional labor hours for repair.”
A representative of Tesla commented on their low FPY rate stating that many cars only require minor reworking: “Our goal is to produce a perfect car for every customer. In order to ensure the highest quality, we review every vehicle for even the smallest refinement before it leaves the factory. Dedicated inspection teams track every car throughout every shop in the assembly line, and every vehicle is then subjected to an additional quality-control process towards the end of the line. And all of this happens before a vehicle leaves the factory and is delivered to a customer.” The Tesla representative also claimed that the number of labor hours per Model 3 vehicle produced had decreased by approximately 30 percent since last quarter.