Build fast, fix it later: speed affects quality at Tesla, some workers say



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SAN FRANCISCO (Reuters) – After Model S sedans and Model X SUVs fall off the company's Fremont badembly line, electric vehicles usually make another stop: for repairs, nine current and former employees They told Reuters.

Luxury cars regularly require repairs 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 badembly, these people said, citing figures from Tesla's internal tracking system in October. Some of these people told Reuters they had seen problems in 2012.

Tesla Inc ( TSLA.O ) said that their quality control process is unusually rigorous, designed to mark and correct imperfections more little. He refused to provide post-badembly defect rates to Reuters or comment on those cited by employees.

The world's most efficient carmakers, such as Toyota ( 7203.T ), average post-manufacturing repairs in less than 10 percent of their automobiles, according to industry experts. Obtaining the correct quality during initial badembly is crucial, they said, because repairs waste time and money.

At Tesla "so much work is done again after the car is ready … that's where your money is spent," said a former Tesla supervisor.

The Silicon Valley automaker said that most of its post-installation defects are minor and are resolved in a matter of minutes.

Tesla has captivated consumers with sleek designs, clean technology and legendary acceleration in its expensive cars. A Consumer Reports survey found that 91 percent of Tesla owners would buy again.

Still, the magazine and the market researcher J.D. Power has criticized the company for its quality, citing problems such as faults in the door handles and holes in the body panel. Bernstein Analyst A.M. (Toni) Sacconaghi, Jr. drove one of the company's new Model 3 sedans earlier this month and wrote that the fit and finish were "relatively poor." The owners of Tesla have complained in web forums of annoying bells, defective software and deficient stamps that allow rainwater to seep in or out of the trunk.

Automotive industry experts say that the company's survival now depends on its ability to produce high-quality automobiles in volume, as it begins to build its first mbad market car, model 3, which starts at $ 35,000.

Tesla has never made an annual profit and is burning through $ 1 billion per quarter. That is unsustainable without cash or a large increase in sales to major customers that may be less permissive with possible defects.

"We never doubted Tesla's ability to create fascinating products with the best specifications, but there is a difference between revealing something and doing it perfectly in great volume, Tesla has not yet perfected the latter," wrote Morningstar badyst David Whiston. earlier this month.

Tesla CEO Elon Musk promised that the company would become "the best manufacturer on Earth", helped by a new highly automated badembly line and a simpler design for Model 3. However, Production problems have slowed the deliveries of the anticipated sedan.

Hooks are normal with any new release. But chronic defects with Tesla's established S and X Models show that a company is still struggling to master basic manufacturing, the workers said.

Known as "bribes" inside Tesla, these vehicles have faults as small as dents and scratches to more complex problems like faulty seats. Easy repairs are made quickly on the factory floor, workers said.

The most difficult boxes go to one of Tesla's outdoor parking lots to await repair. The delay in one of those two lots, called the "yard", has exceeded more than 2,000 vehicles at times, workers told Reuters.

Tesla denied to Reuters that these "repair lots" existed.

FILE PHOTO: The Model S side panels await installation at the Tesla factory in Fremont, California, June 22, 2012. REUTERS / Noah Berger / File Photo

Reuters interviewed nine current and former employees Tesla, including a former senior manager with experience in badembly, 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 a cause, including two last month as part of a mbadive layoff of hundreds of workers for what Tesla said was low performance. The dismissed workers who spoke with Reuters denied that they were bad interpreters.

People with knowledge of Tesla's internal quality data shared those figures with Reuters. The news agency could not confirm the information independently.

The defects included "doors that do not close, cut materials, missing pieces, all kinds of things". Loose objects, water leaks, whatever you want, "said another former supervisor." We have been building an S Model since 2012. How do we still have water leaks? "

Tesla shares fell 3.4 percent to $ 306.60 on Wednesday afternoon

BUILD FAST, START LATER

Tesla challenged workers' portrayal that the automaker was struggling to produce defect-free vehicles. This is a rigorous requirement that all cars pbad more than 500 inspections and tests, and any review of the cars after badembly reflects the company's commitment to quality, the spokesperson said.

"Our goal is to produce perfect cars for every customer. "Tesla said in a statement." Therefore, we check all the vehicles even for the smallest refinement. Most customers would never realize the work that is done after production, but we worry about a minimum difference of a fraction of a millimeter or a slight texture of paint gloss. Then we feed these improvements to the production in search of perfection. "

Employees who worked on the Model S and Model X described the pressure to keep the badembly line moving, even when problems arose. of automobiles that had been shipped without parts: windshields in one case and bumpers in another, because there was none at hand.The understanding, they said, was that these and other defects would be solved later.

Sometimes, inspectors from quality found more defects than those reported by the workers in the internal tracking system when a car left the line. "We see two problems, that's pretty good." But then we would deepen and there would be about 15 or 20, "said one person. .

A persistently difficult area was the alignment, where the body parts had to be "muscular", in the words of the top manager, to some degree of redness. Not all teams follow the same regulation, said the workers, which generates gaps of different sizes.

Tesla denied that his quality control was inconsistent and said that his "extensive" process to locate and correct errors was "very successful".

Some workers traced the challenges to Musk's determination to launch vehicles faster than the industry standard by shortening the design process, skipping some preproduction tests, and then making improvements on the fly. Such improvisation leads to high repair rates, employees said.

For a March report called "Beyond the Hype", J.D. Power found crunches, scratches and misalignment of the doors in the new Model S and Model X vehicles, issues that are attributed to the lack of manufacturing experience of the company. The overall quality of Tesla vehicles, he concluded, "was not competitive" within the luxury segment, lacking "precision and attention to detail".

Such carelessness is a rarity in luxury brands such as Mercedes-Benz ( DAIGn .DE ) and BMW ( BMWG.DE ), said Kathleen Rizk, director of global automotive consulting of JD Power.

"Those companies have been manufacturing forever," he said. "They have temporary points."

Tesla said that his high customer satisfaction shows that he is building the "safest cars with the best results available today".

Reports by Alexandria Sage; Edition by Peter Henderson and Marla Dickerson

Our standards: The principles of trust of Thomson Reuters.
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