Production deadline at Tesla

Even as Tesla inc. struggles to iron out its model 3 manufacturing bugs, the California electric vehicle maker announced an eyebrow-raising production deadline. Tesla plans to begin production of its model y crossover in early 2020, managing director Elon musk said in a cantankerous earnings call last week.

Timeline by Elon is quite unexpected

It typically takes 30 to 36 months from factory groundbreaking to vehicles rolling off the production queue, autopacific analyst Dave Sullivan told automotive news." Elon is over-promising and surely will be under-delivering," Sullivan said. "i thought the model 3 launch would bring out a more humble side of musk."

In September 2015, Volvo broke earth on its first wagon plant in the US, near Charleston, S.C. about 31 months later; it still hasn't started commercial production on the s60 saloon.

"Building cars is difficult," said Karl Brauer, executive publisher at Cox automotive. "It’s a laborious process — not just the assembly of the cars, but the logistics of production."

Regardless of Musk's promises, the model y production timeline will be dictated in large parting by the supply chain. "Tesla is dealing with the same supply base that the rest of the automakers are dealing with," Sullivan said. "If other automakers could do it faster, they would."

Musk will break the old production system

It hasn't always worked out. Tesla abandoned century-old auto manufacturing processes for a highly automated production system to build its make-or-break model 3. That hasn't panned out, leading to build quality problems and production slowdowns. Model 3 productions hit 2,270 vehicles per week in April, below the 5,000 that musk noted would bring the company to cash-flow positive.

Musk acknowledged an overdependence on automation. "Yes, excessive automation at Tesla was a mistake," Musk tweeted last month. "Humans are underrated."

What makes the early 2020 timeline even more of a stretch is that Tesla is yet to identify a site for the model y plant. Musk dismissed a media report that the new crossover would be built at Tesla's Fremont, calif, plant, noting the factory is "jammed to the gills" and "mad packed."

A site decision could come "maybe next quarter, but not later than fourth quarter," musk said on the earnings call, in which he dismissed certain financial analysts' questions as "boring" and "dull."

To meet the early 2020 production deadline, Tesla likely would have to buy a plant rather than build one. The automaker could have several options to shop, given the changes roiling the auto industry.

"We see a constant shift in vehicle production plans; saloon production is dropping left and right," Brauer said. "There could be a plant that a current automaker uses to produce sedans and they don't want takeaway through the trouble to transition it to SUVs."

But Tesla's timeframe is likely to extend

"If a plant was handed to you tomorrow, ready takeaway, it would take you a year to staff it and then to build out the supply chain," Brauer said.

Musk’s optimistic model y target, Sullivan said, is about whetting investor appetite.

"He wants more investment and has to show momentum”, Sullivan said.

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