FRANCISCO (Reuters) - After Tesla’s Model S sedans and Model X
SUVs roll off the company’s Fremont, California assembly line, the
electric vehicles usually make another stop - for repairs, nine
current and former employees have told Reuters.
luxury cars regularly require fixes before they can leave the
factory, according to the workers. Quality checks have routinely
revealed defects in more than 90 percent of Model S and Model X
vehicles inspected after assembly, these individuals said, citing
figures from Tesla’s internal tracking system as recently as
October. Some of these people told Reuters of seeing problems as
far back as 2012.
said its quality control process is unusually rigorous, designed
to flag and correct the tiniest imperfections. It declined to
provide post-assembly defect rates to Reuters or comment on those
cited by employees.
world’s most efficient automakers, such as Toyota (7203.T),
average post-manufacturing fixes on fewer than 10 percent of their
cars, according to industry experts. Getting quality right during
initial assembly is crucial, they said, because repairs waste time
Tesla “so much goes into rework after the car is done ... that’s
where their money is being spent,” a former Tesla supervisor said.
Silicon Valley automaker said the majority of its post-assembly
defects are minor and resolved in a matter of minutes.
has enthralled consumers with sleek designs, clean technology and
legendary acceleration on its pricey cars. A Consumer Reports
survey found 91 percent of Tesla owners would buy again.
the magazine and market researcher J.D. Power have dinged the
company on quality, citing troubles such as faulty door handles
and body panel gaps. Bernstein analyst A.M. (Toni) Sacconaghi, Jr.
test-drove one of the company’s new Model 3 sedans earlier this
month, writing that the fit and finish were “relatively poor.”
Tesla owners have complained on web forums of annoying rattles,
buggy software and poor seals that allow rainwater to seep into
the interior or trunk.
industry experts say the company’s survival now depends on its
ability to crank out high-quality cars in volume as it begins to
build its first mass-market car, the Model 3, which starts at
has never turned an annual profit and is burning through $1
billion a quarter. That is unsustainable without fresh cash or a
big increase in sales to mainstream customers who may prove less
forgiving of potential defects.
never doubted Tesla’s ability to make exciting products with top
specifications, but there’s a difference between unveiling
something and then actually making it perfectly in large volume.
Tesla has not perfected the latter yet,” Morningstar analyst David
Whiston wrote earlier this month.
Chief Executive Elon Musk has vowed the company would become “the
best manufacturer on Earth,” helped by a new, highly automated
assembly line and a simpler design for the Model 3. However,
production woes have slowed deliveries of the much-anticipated
are normal with any new launch. But chronic defects with Tesla’s
established Models S and X show a company still struggling to
master basic manufacturing, workers said.
as “kickbacks” within Tesla, these vehicles have glitches as minor
as dents and scratches to more complex troubles such as
malfunctioning seats. Easy fixes are made swiftly on the factory
floor, workers said.
cases head to one of Tesla’s outdoor parking lots to await repair.
The backlog in one of those two lots, dubbed the “yard,” has
exceeded 2,000 vehicles at times, workers told Reuters.
denied to Reuters that such “repair lots” exist.
PHOTO: Model S side panels await installation at Tesla's
factory in Fremont, California, June 22, 2012. REUTERS/Noah
interviewed nine current and former Tesla employees, including a
former senior manager, with experience in assembly, quality
control and repairs on Model S and Model X. All requested
anonymity because the company required them to sign non-disclosure
agreements. Four of the people were fired for cause, including two
last month as part of a mass dismissal of hundreds of workers for
what Tesla said was poor performance. Sacked workers who spoke
with Reuters denied they were poor performers.
with knowledge of Tesla’s internal quality data shared those
figures with Reuters. The news agency was unable to confirm the
included “doors not closing, material trim, missing parts, all
kinds of stuff. Loose objects, water leaks, you name it,” another
former supervisor said. “We’ve been building a Model S since 2012.
How do we still have water leaks?”
shares were down 3.4 percent to $306.60 in afternoon trading on
FAST, FIX LATER
disputed workers’ portrayal of the automaker as struggling to
produce defect-free vehicles. A spokesperson described a rigorous
process that requires all cars to pass more than 500 inspections
and tests. Any reworking of cars after assembly reflects the
company’s commitment to quality, the spokesperson said.
goal is to produce perfect cars for every customer,” Tesla said in
a statement. “Therefore, we review every vehicle for even the
smallest refinement. Most customers would never notice the work
that is done post production, but we care about even a fraction of
a millimeter body gap difference or a slight paint gloss texture.
We then feed these improvements back to production in a pursuit of
who worked on Model S and Model X described pressure to keep the
assembly line moving, even when problems emerged. Some told of
batches of cars being sent through with parts missing -
windshields in one case, bumpers in another - because there were
none on hand. The understanding, they said, was that these and
other flaws would be fixed later.
inspectors would sometimes find more defects than those reported
by workers in the internal tracking system when a car came off the
line. “We’d see two issues, that’s pretty good. But then we’d dig
in and there would be like 15 or 20,” one person said.
persistently tricky area was alignment, where body parts had to be
“muscled,” in the words of the senior manager, to a certain degree
of flushness. Not every team follows the same rule book, workers
said, resulting in gaps of different size.
denied that its quality control is inconsistent and said its
“extensive” process for locating and fixing errors was “very
workers traced the challenges to Musk’s determination to launch
vehicles faster than the industry norm by shortening the design
process, skipping some pre-production testing, then making
improvements on the fly. Such improvisation leads to high repair
rates, employees said.
a March report called “Beyond the Hype,” J.D. Power found creaks,
scratches and poor door alignment on new Model S and Model X
vehicles, issues it blamed on the company’s lack of manufacturing
experience. The overall quality of Tesla vehicles, it concluded,
was “not competitive” within the luxury segment, lacking
“precision and attention to detail.”
sloppiness is a rarity in luxury brands such as Mercedes-Benz (DAIGn.DE)
and BMW (BMWG.DE),
said Kathleen Rizk, director of global automotive consulting at
companies have been manufacturing forever,” she said. “They have
said its high customer satisfaction proves it is building the
“safest and best-performing cars available today.”
By Alexandria Sage; Editing by Peter Henderson and Marla