Tesla is taking a major gamble regarding the production of its upcoming Model 3 sedan in skipping prototype tooling and jumping straight to permanent production tooling, says a noted auto-manufacturing expert.
"He's pushing the envelope to see how much time and cost he can take out of the process," Ron Harbour, a manufacturing consultant at Oliver Wyman, told Reuters.
Automakers normally order inexpensive prototype tooling to work out potential kinks and quality issues that may arise in parts and assembly processes.
After the "beta testing" is complete, the prototype tooling is scrapped, and permanent tools are put in place.
These permanent tools are very expensive, but Tesla is confident it can skip straight to them from hand-built cars when it comes to its much-hyped, more affordable Model 3 electric sedan.
The biggest risk this all poses is that the permanent tools are extraordinarily expensive.
Tesla Model 3 Driving on a Public Road
If Model 3 production begins and faults are discovered in tooling or the processes, it could cost millions of dollars to replace tools and fix defects, and it could even potentially halt production altogether, according to Harbour.
Tesla is hoping to produce 500,000 vehicles per year by the end of next year with the addition of the Model 3 to its vehicle portfolio.
Tesla CEO Elon Musk offered up his reasoning behind the decision, saying advanced computer simulation technology has allowed the company to skip the usual beta period.
An unnamed source also told Reuters the "soft tooling" period hurt more than helped during the Model X production process.
"Soft tooling did very little for the program and arguably hurt things," the source said.
When production begins this summer, the very first vehicles will not be headed to the general public, either.
Tesla Model 3 design prototype - reveal event - March 2016
The first batch of Model 3 will instead go to Tesla board members, company executives, and other employees.
It may be one way to potentially curb issues before sending the Model 3 out into the public, but it doesn't change the massive investment that would be required to fix a potential production hiccup.
The Harbour name is a notable one in auto-manufacturing consulting: Ron Harbour's late father, Jim Harbour, spent his entire career on auto-manufacturing processes, wrote several books on the topic, and founded a successful consultancy practice later run by his son.
When all is said and done, the public, media, and Tesla itself won't know if the risky bid will pay off until assembly lines begin humming away.
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