As Tesla Struggles, Its Rivals Make Far More With Less

Ford Motor Co. investors, unlike the Tesla Inc. faithful, don’t pay much attention to production numbers. If they did, they’d be particularly pleased with the factory in Louisville, which has recently been cranking out about 1,100 Ford Escape SUVs every day, more than any other model from a single North American plant.

Tesla’s ongoing struggle to meet its own production targets comes into stark relief when one takes a glance around the rest of the auto industry. The numbers that Tesla is stretching for, upon which the fate of the company hang and Chief Executive Officer Elon Musk is personally cheerleading his workers to hit, are relatively modest. Despite all the sturm and drang, the bar is low.

According to monthly production reports compiled by Bloomberg Intelligence, current Model 3 production is roughly on pace with the Dodge Journey crossover, a drab workhorse of rental car stables. Ford is making far more of its Transit vans, and customers don’t have to languish on a waiting list for one of those. On a ranking of vehicle models produced at a single North America facility, Tesla’s coveted Model 3 would finish about 70th.

Back of the Pack

North American plants are making about 70 models more quickly than the Tesla Model 3.

Source: Bloomberg Intelligence

* last week of March

“The market is realizing maybe GM and Ford aren’t a bunch of idiots,” said Bloomberg Intelligence analyst Kevin Tynan. “Maybe this stuff is really hard.” Ford, he noted, is particularly good at making cars because it’s been doing so—by laboring over which worker stands where—for 115 years.

Tesla is also paying a lot of people to be so inefficient. The most productive assembly plant in North America at the moment, Nissan Motor Co.’s factory in Smyrna, Tenn., has about 8,000 workers turning out roughly 1,700 vehicles per day—that’s about 5 workers per vehicle.  Honda Motor Co.’s plant in Alliston, Ont., gets even more bang for its buck: almost 1,200 vehicles a day from 4,200 workers—roughly 3.5 people per car.

Using about 10,000 workers in the last week of March, Tesla cranked out 2,020 Model 3s at its Freemont, Calif., plant. That’s 289 vehicles per day, or 35 employees for every Model 3 coming off the line.

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Making a car, of course, requires a lot more than warm bodies. Managing supply chains and workflow is even more critical. The Bayerische Motoren Werke AG complex in Spartanburg, S.C., works with 235 different suppliers, and four out of five cars it screws together receive some level of specified customization. Tesla’s new machine, in comparison, comes in just three trims.

Achieving such precision takes time and practice. Automakers usually go through a preproduction process that can take up to nine months. During this time, engineers calibrate the massive sentient robots’ arms to get the body panels fitting tightly and figure out the minutia that make the difference between an assembly line running smoothly and stopping frequently. Every detail is studied from where the fenders should be stacked to how many bolts should be piled in a rolling tray that accompanies a vehicle down the assembly line.

In its haste to produce the Model 3, Tesla skipped this page of the traditional automaker’s playbook. Given the rush, the company’s production stumbles are understandable to those familiar with making cars. Investors and lenders, of course, may have less sympathy (and patience).

“Making cars is actually a horrible business,” Tynan said. “It’s hard, it’s expensive, it’s slow, and there’s not much margin there. It’s really an incredible undertaking.”

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