Tesla's journey through "production hell" with its Model 3 electric vehicle is a cautionary sign for the company's solar panel factory in Buffalo.
Tesla's hiccups and delays with its Model 3 show that opening a massive factory isn't easy.
Add in the ambitious deadlines that CEO Elon Musk is notorious for setting – and missing – and there's a good chance that the loose timetables that Tesla has spelled out for its 1.2 million-square-foot Buffalo plant may prove optimistic. Tesla wants to start production of its solar roof by the end of the year and reach full production by 2019.
To be sure, there are plenty of differences between a factory that makes electric vehicles and one that makes solar panels and solar roofing tiles. An electric vehicle is vastly more complex, with more than 10,000 unique parts.
But there also are similarities. Musk believes in automation and the notion that smarter, more sophisticated machines can drive down production costs. Since the Buffalo factory was first announced, plans to make the production process more automated have allowed Tesla to reduce the number of planned manufacturing workers to around 500.
And both are groundbreaking products starting from scratch.
Tesla thinks its Model 3 sedan, selling for $35,000 and up, will put the company on the leading edge of an electric vehicle market that is expected to see a flood of new models from mainstream automakers in the coming years.
Likewise, its solar roof is a first-of-its-kind product made in the Buffalo factory. But it is still being tested and has never been manufactured on a large scale.
Tesla's bumpy road to Model 3 projection may be a good guide to setting realistic expectations for the next year or two in Buffalo.
Tesla said it only delivered 222 of its Model 3 sedans during the third quarter because its Nevada gigafactory had trouble making the battery modules that go into the electric vehicle. Musk blamed an unidentified systems integration subcontractor that, he said, "dropped the ball."
"We did not realize the degree to which the ball was dropped until quite recently," Musk told investors earlier this month.
The problem forced Tesla to step in and rewrite all the software and redo many of the mechanical and electrical elements in that part of the production process, said Musk, who did the company's investor conference call from Nevada.
"I move myself to wherever the biggest problem is in Tesla," said Musk, who told analysts he had been helping to diagnose robot calibration issues at 2 a.m. on a Sunday. "I really believe that one should lead from the front lines, and that's why I'm here."
The battery plant bottleneck also illustrated another obstacle to a rapid ramp in production: Tesla can only move as fast as its slowest supplier. That's a constraint the company also will face in Buffalo since part of its pledge to the state is to build a local network of suppliers and service providers that will create 1,440 jobs, nearly as many as Tesla itself promises to bring to the solar panel factory.
"We will move as fast as the least competent and least lucky elements of that mixture," he said.
That's why Musk calls the ramp-up stage "production hell." And he invoked the nine levels of hell in Dante's Inferno — with nine being the worst — to describe to investors just how hot it was.
"I was really depressed about three or four weeks ago, when I realized that we were kind of in Level 9. Then we got to Level 8. Now I can see sort of a clear path to sunshine," Musk said. "So I feel pretty optimistic right now. If you talked to me three weeks ago, I would have been quite pessimistic. I was sort of quite down in the dumps."
"Now, it's pretty obvious what we need to do," Musk said of the Model 3 production. "It's just a matter of work to get there, working seven days a week to do it."