Tesla’s earnings report on Wednesday revealed more than just projections and profits, it shed light on an emerging truth: People don't understand how hard it is to manufacture something. Specifically, something innovative.
The discussion was sparked when the electric carmaker lowered the 2014 delivery forecast of its Model S sedans from 35,000 to 33,000. In response to analyst speculation of a possible decline in demand, CEO Elon Musk addressed critics:
“People don’t appreciate how hard it is to manufacture something. It’s very hard. There are 70,000 unique parts in a car, and Model S is a complicated car.”
The rebuttal brings up a rather overlooked reality—that innovation takes time, and more importantly, is worth waiting for. The company that outsold Porsche, Fiat, Buick, Jaguar, and Land Rover in California has outscored every other car in tests conducted by Consumer Reports because of one reason: thoughtful perfectionism.
For example, the carmaker is working on customizing its Model S for regional markets, such as modifying the back seat for additional comfort because many of its target customers in China don’t drive—they have chauffeurs.
How’s that for thoughtful perfectionism?
In a story we covered earlier this year, Tesla sent out an over-the-air update that actually changed the car’s suspension, giving more clearance at high speeds. They did the same for detecting charging problems—if unusual spikes were identified, the car would cut the current by 25 percent to avoid overheating.
In doing so, the company prevented a recall of 29,222 cars. Compare that to the record number of industry recalls so far this year (more than 56 million). As global car production has increased over the years (along with intricacies in design), so has the number of recalls year over year. Yes, manufacturing is hard. But innovative manufacturing is even harder. And as Tesla likes to remind investors—its focus on quality comes ahead of short-term success.
The Standard Process
Introducing a new car model generally takes three to five years from inception to assembly. To give you an idea of the complexity behind car manufacturing, the graphic below summarizes what a typical car goes through to make it from factory to show floor.
The Tesla Process
Tesla however, is a bit different. The development of an electric car relies on innovative solar and aeronautical engineering, along with advanced satellite and radar technology. And that’s just the tip of the iceberg. For a behind the scenes look at the company’s intricate manufacturing process, check out the video below.
Worth the Wait
In July of this year, Tesla shut down its factory in Fremont, California to improve its assembly line operation. As a result, the company pushed out 2,000 fewer cars than expected—the catalyst for the criticism it received earlier this week. But in doing so, they’ve set a system in place to support their aggressive goals moving forward, without compromising quality.
As industry professionals, our duty doesn’t lie solely on getting the job done; delivering products on time and within budget. Rather, it hinges upon creating products with integrity that truly delight customers, while setting the right expectations through communication and education. There’s a reason why companies like Tesla and Apple can have product delays without stifling demand—because the end product is indeed worth the wait.
For more on this year’s record number of auto recalls, stay tuned for next week’s post.
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