In June 2018, Bloomberg published an article describing Tesla’s latest controversial measure – producing Model 3 cars in a tent covering the area of two football fields, constructed in the parking lot of their existing Fremont, California production facility. (The tent is visible in the title image of this post, behind the Model 3s in the foreground.)
The commentary by some industry experts is resoundingly negative on this move, with one analyst saying that the quality of the cars produced in the tent is likely to be shockingly bad.
“Words fail me. It’s insanity,”
Max Warburton, Sanford C. Bernstein & Company
Bricks and mortar
The term “bricks and mortar” has come to describe retailers who occupy physical locations to sell their wares. The term suggests the opposite of the nimble, low cost approach of online retailers who are unshackled to physical locations.
Constructing a new production line in a tent does smack of desperation as the electric car company struggles to meet production rate promises made by Elon Musk, the company’s CEO.
My interpretation is more generous – I think this is a brilliant way to introduce flexibility into the production of Tesla cars. By using a temporary structure, Tesla is straddling the gap between slow and heavy bricks and mortar and the weightless maneuverability of online startups.
Building a new production facility is costly and time consuming. Take for example the production plant Toyota is building in Guanajuato, Mexico at a projected cost of $1 billion. The plant was announced in 2015 and has yet to open.
(This example is interesting because Toyota now finds itself the subject of protectionist rhetoric from President Donald Trump – a factor few would have predicted in 2015. No company can avoid the unexpected, but the faster the company can alter its course the better.)
Bricks and mortar are the antithesis of flexible, and Tesla can enjoy enormous flexibility in its new tent assembly plant. Need more room? Shift the walls? Need a door? Cut one in. Need to move? All that’s left behind is the parking lot.
A key component of Design Thinking is iteration – the ability to learn from what you produce and then produce something better. Tesla started out with grand visions for “the machine that builds the machine”, focusing not just on a better car but a better car plant, with intentions for radically new levels of automation. This turned out to cause more problems than it solved and Tesla has since scaled back automation.
Now rather than shut down their existing line and revamping it, they have built a temporary structure in which to house a new line that reflects their new production methods.
Tesla is in a unique position in the automotive world. Electric cars don’t eat into its business – electric cars are its business. And it has enough demand to sell every car it can make.
Meeting that demand is requiring Tesla to produce a new car and a new line to build it. This is a very demanding piece of work and deserves the moniker Musk gave it – production hell.
To do this, the company has both had to be enormous in its productive capacity and quick to adapt to setbacks. These two abilities are often viewed as opposites. Elephants don’t dance. By rushing production into a tent, Tesla is prioritizing flexibility.
I find this exciting because so many organizations are resigned to inflexible processes and say that Design Thinking’s call for frequent iteration simply doesn’t apply to their industry.
“We believe in rapid evolution. It’s like, find a way or make a way. If conventional thinking makes your mission impossible, then unconventional thinking is necessary.”