Tesla Motors, the youngest publicly traded US automaker – an automotive darling among investors and fans – has found a simple truth: producing automobiles is no easy feat.
The automaker’s stock lost in value big times after the California-based company announced its quarterly loss had gone up from the previous fiscal exercise and also lowered its full year sales target. The difficulties mostly have to do with the approaching delivery launch of the much-hyped and long-anticipated Model X sport utility. This is to be expected from Tesla’s cult-like celebrity technology company status – but the woes are actually part of everyday life if we take as an example any traditional automaker. Just as chief executive officer Elon Musk described the situation, Tesla is now riding out of the infancy phase and will have to manage production issues when delivering more than one vehicle off the same assembly line in Fremont, California. “Simply put, in a choice between a great product or hitting quarterly numbers, we will take the former,” Musk commented.
And if any automaker would be asked, the reply would be straightforward: anyone can deliver just one product in large quantities. But take the needed flexibility to produce more products, with demand being widely variable, straight off the same assembly line and you have the most complex puzzle. Let’s just remember how Fiat Chrysler Automobiles had to postpone the sales launch of its highly popular jeep Cherokee by around half a year after it found some hidden problems with its new 9-speed automatic transmission.