Tesla Encounters the Material World

By Lambert Strether of Corrente.

Cars are made of stuff. Software is made of bytes. While I don’t say that Silicon Valley squillionaire Tesla boss Elon Musk has stuff and bytes confused in his mind, it is true that the unexpected materiality of the automobile is causinge his company problems, and may be enough to sink it. Further, broadening focus from Tesla to the industry, the tendency of electric vehicles (EVs) to dematerialize — by catching on fire — will pose problems for (publicly funded) local governments that nobody seems to be thinking about. I’ll show the first by looking at Tesla’s attempt to automate the final assembly process; and the second by looking at a recent Tesla battery fire.

Automating Final Assembly at Tesla

Elon Musk has a master plan:

In 2006 Tesla CEO Elon Musk published a ‘top secret masterplan’ on Tesla’s website. It was low on detail but the groundbreaking electric car company has stuck to it. Tesla, it said, was going to ‘[1]create a low volume sports car, [2]use that money to develop a medium volume car at a lower price and [3]use that money to create an affordable, high volume car’.

In Silicon Valley terms, Musk was going to create a manufacturing process that scaled, a process where the only requirement to solve capacity problems is a frictionless capital injection for bandwidth or servers (as opposed to, say, hiring and training workers). But now we see that Tesla’s process not scaling; that’s why Tesla keeps not making Musk’s projections. A report from Bernstein analysts Max Warburton and Toni Sacconaghi (noted at NC here, and then at Business Insider (“The Robots Are Killing Tesla“) explains why. Musk hoped to achieve the third phase of his master plan (“high volume”) through hyper-automation, including automating final assembly. It’s not working. Quoting Warburton and Sacconaghi (via Twitter):

We’ve noted Elon Musk’s claims about reinventing auto production with interest. He’s talked about manufacturing being “a competitive advantage,” about “the machine that builds the machine,” [Wired] and about “manufacturing as the product.” He has said “…you can’t have people in the production line itself, otherwise you drop to people speed. So there will be no people in the production process itself. People will maintain the machines, upgrade them, and deal with the anomolies.” These are bold claims. They have been accompanied by Tesla’s huge capital investments in the last two years… We’ve noticed reports of hundreds of multi-axis Kuka robots being purchases for Fremont (467 reported in just one batch — we believe the total is far greater). We’ve watched as Tesla bought outright a German automation design company (Grohmann) to help it with its task.

[A]s Tesla has struggled to ramp Model 4 — and as the company has sought to optimistically discuss its assembly line design — we’ve rather belatedly figured out what’s going on. The reason Tesla spent all this money, the reason it bought Grohmann, and the reason it can’t build Model 3’s are all linked. Tesla has tried to hyper-automate Model 3 production. And like every historic attempt at high automation in the industry, it’s struggling.

In fact, Tesla’s automation attempt is not only struggling; Warburton and Sacconaghi predict it will fail. Here is why:

[Tesla] has also tried to automate final assembly…. Tesla’s approach to automation rings alarm bells. If we look at the history of the auto industry, we can see that attempts to automate final assembly haven’t worked. Many OEMs have tried it in the past — such as Fiat, VW, and GM. They have all failed, often spectacularly. Anyone familiar with automobile assembly knows this…. .

[A]utomation is expensive — and usually proves far less effective, highly inflexible, and creates quality problems further down the line.

  • In welding, mistakes and inconsistences go unrecognized — but the machine powers on and builds cars with the wrong geometry or bad spot welds in key locations. These are only found later — when for instance the windscreen is inserted, or a door re-attached. Have you wondered why Tesla doors don’t align, or hoods don’t fit, or windscreens are prone to cracking? Now you have your answer.
  • In final assembly, robots can apply torque consistently — but they don’t detect and account for threads that aren’t straight, bolts that don’t quite fit, fasteners that don’t align, or seals that have a defect. Humans are really good at this. Have you wondered why Teslas have wind noise problems, squeaks and rattles, and bits of trim that fall off? Now you have your answer.

It’s the materiality — the bad welds, crooked bolts, misaligned fasteners, defective seals — that hyper-automantion cannot handle. Warburton concludes: “[A]utomation in final assembly doesn’t work.” High-tech manufacturing expert Roger Bohn agrees:

Fundamentally, Tesla has a product design and production process that are “not manufacturable.” That is, the product tolerances are considerably tighter than the process variation. The result is that they produce lots of junk that must be scrapped or reworked. They can partially reduce process variation by stopping more often to adjust machines, but this causes downtime and creates “bottlenecks.”

All this means that Tesla can’t remove people from the production line. That means that Tesla can’t make Musk’s projections. What that means, we’ll see.

As a sidebar, it’s worth noting that Tesa had the same issues with its battery manufacturing plant. CNBC in January:

Tesla’s problems with battery production at the company’s Gigafactory in Sparks, Nevada, are worse than the company has acknowledged… according to a number of current and former Tesla employees.

Here is a description of the materiality of the battery-making process:

What does it take to make a Model 3 battery? Each battery pack contains four modules. And each module contains seven bandoliers, or cooling tubes with a row of lithium-ion cells glued to each side. Those cells have to be precisely aligned.

Manual assembly works for some parts of battery production, like bolting down and gluing the “clamshells,” or outer structures that hold a battery pack together.

But bandoliers are tough to put together by hand. Cells can be pushed a bit too high or low, or otherwise drop out of alignment, as they’re squeezed against the glue on a cooling tube and packed into modules.

A current Gigafactory engineer recalled that in December, factory workers were manually “slapping bandoliers together as fast as they possibly could,” generating a lot of scrap in the process.

Once the machines in the factory were able to crank out bandoliers as fast or faster than the manual laborers, Tesla began sending Panasonic workers back to their employer, sources said.

Today, Tesla is winding down manual assembly as much as possible at the Gigafactory, a hopeful sign.

But one engineer who works there cautioned that the automated lines still can’t run at full capacity. “There’s no redundancy, so when one thing goes wrong, everything shuts down. And what’s really concerning are the quality issues.”

Now, I can believe that in fact battery production will scale, simply because they are orders of magnitude less complex than cars. Still, it’s telling that we have the same issues at both hyper-automated assembly lines. It’s almost like management has a gigantic blind spot, because the same problem keeps happening….

Battery Fires as an Externality

From Tesla’s doomed quest for struggles with hyper-automation, let’s turn to a recent Tesla incident that points up a difficulty for the electric vehicle industry as a whole: The death of Apple Engineer Wei Huang in his Tesla, and the subsequent battery fire. ABC News describes the incident:

Huang was traveling at freeway speeds on the split along the Highway 101 and state Highway 85 junction, lost control and struck the middle barrier causing his vehicle to catch fire, according to the CHP. A Sig-Alert was issued at 9:29 a.m., the time that the CHP was notified of the crash.

After Huang’s Tesla hit the median, it landed in the second left-most lane of southbound Highway 101 and was hit by a white Mazda and consequently struck again by a gray Audi traveling in the adjacent lane, CHP officials said.

(Most of the coverage has focused on whether Tesla’s autopilot was at fault; Tesla has blamed a damaged safety barrier for the extent of the impact.) Here is an image of the Tesla after the crash:

(One can only conclude that Tesla — and the entire EV industry — dodged a bullet, in public relations terms; there are no charred bodies strapped in the seats.)

And here is a video of the fire:

Finally, here’s a shot of the battery compartment, breached in the crash, after the fire was put out:

(In this image, you can clearly see the how Tesla constructs its “floor-mounted lithium-ion high voltage battery” out of many small individual cylindrical batteries, unlike (say) GM. Here are two Reddit threads for battery mavens, and an infographic on Tesla’s design choices.)

Now, I’m not arguing that there’s anything wrong with Tesla’s battery design (though one can’t help but wonder if quality assurance problems at Tesla’s GigaFactory were somehow involved). Instead, I’d like to focus on what the emergency crews and the firefighters had to do to put out the fire. From the Mountain View Voice:

Emergency fire crews arrived at the crash shortly after 9:30 a.m., and found that the front end of the Tesla had “substantial damage,” exposing the vehicle’s lithium ion battery and causing it to catch fire, according to Mountain View Fire Chief Juan Diaz. Electric vehicle fires are typically put out by blasting a large quantity of water — 3,000 gallons — directly on the battery to bring down the temperature of the cells, which can overheat and reach temperatures of up to 900 degrees, he said.

Diaz said the department was put in a difficult situation. Fire crews had 500 gallons of water at the scene, but getting any more would have required running 2,000 feet of thick fire hose across Highway 101, which would have been catastrophic for traffic in both directions, Diaz said. But letting the car continue to burn on a busy highway, destroying the battery, would have been a bad choice as well, he said.

“In the middle of the Highway 101 freeway, that’s not something we want to do,” he said. “And it’s not good for the environment with the byproducts of combustion.”

Fire crews used the available supply of water and contacted the manufacturer of the vehicle, Palo Alto-based Tesla, to assist in getting the battery’s temperature under control. Diaz said the engineers essentially disassembled a portion of the car battery on the spot, and that subsequent thermal imaging showed that the battery was no longer unstable.

Fire engines escorted the tow truck that removed the Tesla all the way to the impound yard out of an abundance of caution, Diaz said. Car batteries are capable of reigniting for 24 hours after cooling.

The challenging situation was made worse by the significant damage caused by collision itself. Diaz said that Tesla vehicles are built to be very safe, with features to help first responders deal with lithium ion batteries that ignite, but in this case emergency crews had no access to the battery’s disconnect wires because they were destroyed on impact[1]. This is the first time the department has dealt with this kind of problem, Diaz said, and he commended his department’s response to the dangerous situation.

(The story doesn’t mention something an observer noted: “Small explosions within the body of the #Tesla just now as technicians remove damaged batteries.”)

Catastrophic automobile accident happen all the time; I doubt very much that the crash that killed Huang is in any way unusual, even though it involved multiple vehicles. What was unusual in this case — what demand special, indeed unique handling — was the presence of an electric vehicle, which required (1) six times the amount of water normally used, (2) the presence of an engineer from the manufacturer (luckily close at hand in Palo Alto), (3) thermal imaging, and (4) a firetruck escort.

Further, if you RTFM, you will see that Tesla recommends that fire departments do even more than the Mountain View Fire Department did. From Tesla’s Model X Emergency Response Guide (PDF), page 22:

A burning or heated battery releases toxic vapors. These vapors include sulfuric acid, oxides of carbon, nickel, lithium, copper, and cobalt. Responders should protect themselves with full PPE, including self-contained breathing apparatus (SCBA), and take appropriate measures to protect civilians downwind from the incident. Use fog streams or positive-pressure ventilation fans (PPV) to direct smoke and vapors.

So, (5) breathing apparatus, and (6) fog streams, whatever they are — like a rock and roll show? — or big fans. Also, besides (7) something to cut the “first responder loop” with (page 15), (8) “insulated tools” (page 21), and (9) “a large open area” (page 21):

Always advise second responders that there is a risk of battery re-ignition. After Model X has been involved in submersion, fire, or a collision that has compromised the high voltage battery, always store the vehicle in an open area at least 50 ft (15 m) from any exposure.

Presumably, you can’t just stick a potentially flaming car in the parking lot behind the station, so you need a fenced off, lit-up “open area,” possibly guarded.

Right now, there aren’t very many crashes involving electric vehicles; there were 17 million new cars sold in 2017, of which 199,826 were EVs. Now, EVs may indeed catch on fire less often than gasoline-fueled cars, but when they do, it looks like substantially more resources from emergency responders and firefighters will be required to be on hand at all times, including equipment, training, and infrastructure[2] (besides potential medical issues for responders). So when the entire EV industry achieves scale, as it probably will — GM, after all, does know something about manufacturing — there were be considerable externalities. All this seems like rather a lot to expect of local governments, even the most beneficent.


The EV industry has two problems: First, it looks like Tesla’s hyper-automated EV manufacturing process will fail (though the GigaFactory, being less complex, may succeed). Since there are other manufacturers who have more functional views of the role humans should play on the assembly line, likely the only people affected will be investors, short or long, in what is, after all, a vanity project for Elon Musk. Second, if the Huang fire is any indication, there will be significant externalities imposed on the public, especially their local governments, as EVs become ubiquitous, which the Silicon Valley trade press ignores. In each case, the materiality of the EV in the workplace — whether at the point of its assembly with human hands, or at the point of its disassembly through fire and rescue — is a key factor to examine.


[1] Somebody should speak to Tesla’s engineers about a design for disconnecting the battery that fails when most needed.

[2] We don’t seem to know exactly why lithium-ion batteries catch on fire. MIT Technology Review, from coverage of a 2013 fire:

There is some real concern out there about the safety of lithium ion batteries, which is understandable because there have been well reported cases of lithium ion batteries catching fire. What’s unnerving about many of these fires is that they seem to happen spontaneously.

Yes, that’s unnerving indeed. More:

First, the fire illustrated once again how difficult lithium ion battery fires are to put out. Firefighters thought they had it put out, but it reignited. There are a couple of schools of thought among battery experts about why this happens.

“A couple of schools of thought.” That’s unnerving, too.

In a battery fire, the main thing that’s burning is the liquid electrolyte, which burns best when it’s exposed to air. One school of thought is that even in the absence of air there other oxidants within the battery that can create and sustain a fire. It’s thought that the battery electrodes themselves can release oxygen, fueling the fire from within. If this is the case, all firefighters can do is to work to keep the fire from spreading and wait for the reactants to burn up.

Other research suggests that this isn’t the case. Instead, what might happen is that even once the fire is put out, the cells stay very hot and keep releasing more electrolyte in the form of vapor. Once firefighters turn off the water and oxygen can once more come into contact the vapor, it can reignite.

It seems clear that we need to do more tests and learn the best ways to put out battery fires, especially as battery-powered cars proliferate.

It seems that in 2013, we don’t really have a scientific basis for telling firefighters what to do. Are there battery mavens in the readership who can bring us up to date on this point?

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.


  1. GF

    Where is the link to this statement: “the tendency of electric vehicles (EVs) to dematerialize — by catching on fire”. There are over 287,000 vehicle fires per year in the US (https://en.wikipedia.org/wiki/Plug-in_electric_vehicle_fire_incidents) – I know not a definitive source – and I could only find evidence of 4 at most per year being all-electric vehicles. Teslas also have a fire warning system that allows time for the car to brake to a stop and the passengers to egress safely.

    1. Yves Smith

      You are straw manning the post. This article is not about EVs generally. It is clearly about Tesla and how its production aspirations have not panned out in reality.

      It is also a matter of record that Tesla historically has had a WORSE record with fires than gasoline-fueled cars have. From the MIT Technology Review in 2013:

      Even so, the incidents have drawn attention to the safety of the batteries used in electric vehicles (see “Early Data Suggests Collision-Caused Fires Are More Frequent in the Tesla Model S than Conventional Cars”). They are also just the latest examples of lithium-ion battery fires in electric vehicles—we’ve seen fires with the Chevy Volt and Fisker Karma plug-in vehicles. Boeing’s 787 Dreamliner was grounded because of problems with its new lithium-ion batteries.


      1. GF


        Here are a few links. Sorry for neglecting them. Also, I wasn’t commenting on the article per say, I was commenting on Lambert’s click-baiting the article by making a statement intimating that electric vehicles catch on fire at a high rate. It has been 5 years since the MIT study and I am not aware of any Tesla fires outside horrendous accidents. How many petroleum fueled vehicle fires have there been following accidents per year would be worth investigating (I’m sure insurance companies have some data on this). 287,000 fires a year in gasoline/diesel vehicles is a real issue that is obviously much overlooked.

        From dueling MIT article – again from 2013 so improvements are likely to have occurred since then:

        “In two cases, the cars ran over large metal objects at highway speed; the third car hit a concrete wall. No one was hurt: a warning system allowed the drivers to pull the car over and get out before smoke started coming from the battery pack…”

        “The Model S owner was nonetheless able to exit the highway as instructed by the onboard alert system, bring the car to a stop and depart the vehicle without injury. A fire caused by the impact began in the front battery module – the battery pack has a total of 16 modules – but was contained to the front section of the car by internal firewalls within the pack. Vents built into the battery pack directed the flames down towards the road and away from the vehicle.”

        “The Tesla’s alert systems signaled a problem, instructing the driver to pull over immediately. The driver exited without being injured but the car’s battery packs were already on fire.”

      2. oh

        The article linked in the post as well as the one you linked to were both written by Kevin Bullis. It appears to me that this guy is carrying water for Tesla and tones down his criticism every which way he can! All Tesla fanboys unite!

    2. Lambert Strether Post author

      > Teslas also have a fire warning system that allows time for the car to brake to a stop and the passengers to egress safely.

      I’m gonna need receipts on this. The Model S owners guide mentions the word “fire” four times, in this sentence (twice):

      In the unlikely event that a fire occurs, immediately contact your local fire emergency responders.

      Link, please.

  2. paul

    Even if PT Musk’s teething troubles were ironed out you can’t engineer against a carrington event.

    It would look like the the third act of every 21st century Marvel movie, without the happy ending.

    1. Lambert Strether Post author

      Read the post. We’re not talking about “teething troubles,” but an inability to automate final assembly, for reasons stated (and at length).

  3. shinola

    A Tech Titan puts on his best cliched Mexican bandit accent & proclaims:

    “Externaliteez! We don’ care ’bout no steenking externaliteez!”

  4. John k

    EV will get better, and Tesla already gets good reviews, albeit with issues, at CR. Not long ago they rated Tesla worlds best passenger car. Plus great reviews by owners.
    Problems going from small production to big usually has serious problems. And much more difficult for newbie with newbie tech. Rolls Royce jet engines essentially went under when simply making bigger what they had been doing for decades.

    They probably should have been funding with stock. Probably need 10b.

    I really hope they make it. Solar with temp storage plus EV would solve a chunk of our biggest problem, which is not how the rich treat workers but climate change, though population is of course behind GW. But for EV to do their part people have to want to buy them, and Tesla is the only one making that version.

    1. Altandmain

      Other car companies are catching on now.

      It will happen with time even if Tesla goes under.

    2. Collapsar

      Tesla gets good reviews at CR? Maybe for new car reviews, but long term reliability is proving to be an issue. In 2015 the model S made news for getting a better-than-perfect score on CR’s new car review, but then ended up with a “not recommended” rating a few months later due to reports of problems with reliability. Tesla is currently at war with Consumer Reports over CR’s “average” reliability rating for the model 3. CR hadn’t driven a 3 yet, but the rating was based on technology used in the current Model S, which the 3 borrows much from.
      As for Tesla being the only company making an EV people want to buy: the model 3 has been outsold by the Chevy bolt for every month the 3 was available last year. In the 3’s best month, December, it was outsold by the Bolt 3,227 to 1,060.

    3. Darius

      I suspect a lot of people are so invested in the Tesla mystique they can’t admit to themselves they bought a pig in a poke and now they’re holding the bag. It may be a little while longer before they can admit that the emperor has no clothes. How’s that for stringing together cliches?

    4. Yves Smith

      Huh? A full 44% of all the cars Tesla ever made have just been recalled.

      I must also point out EVs have been around since the early 1990s. I drove one in 1994.

    5. Lambert Strether Post author

      > Tesla already gets good reviews, albeit with issues, at CR

      Tesla consistently gets mixed reviews, with bad reviews on final assembly issues (as opposed to the power train). Green Car Reports:

      The build quality of the early Model 3 we tested in late February was, in a word, appalling.

      During the test itself, two things became clear: The Model 3 works largely as intended, and the build quality was the worst we have seen on any new car from any maker over the last 10 years.

      The flaws and defects broke down into two categories: those that affected the functioning of the car or the owner’s driving experience, and those that didn’t.

      The first group included:

      • The defective touchscreen and all the follow-on effects (above)
      • Persistent creaks and groans from the console or dash
      • An intermittent loud buzz from the upper right-hand center door pillar at highway speeds on some road surfaces
      • A steering vibration (in a car with just 1,000 miles)

      Different owners have suffered blown main fuses in their Model 3 battery packs, varying and unexplained error messages that power down the car, and numerous other issues.

      Most of the reviews are pretty gentle, partly (I’m guessing) because Tesla has a large fan base, and partly because Silicon Valley “innovators” get deference in the trade press. But the built quality issues are consistent across the reviews, and in the post we explain why that is.

      1. oliverks

        You can’t forget the famous Top Gear review of the roadster that effectively killed sales of that model entirely. One might say it wasn’t glowing.

  5. False Solace

    Those who live by the sword will die by the sword. Musk and his various enterprises appear to subsist more on PR than oxygen. One day Musk tells us that AI will destroy the world, the next he wants to build an underground hyperloop between various cities, later he explains that the first batch of people he sends to Mars will likely die there (well, that does seem rather likely). The technological feasibility of Musk’s plans are never questioned by his adherents. Rather, his ideas are wafted toward the heavens on tremulous clouds of hype.

    It’s been a while since Americans dreamed big about the future. Musk’s contribution to that could be a worthwhile thing. But the big, visible failure of a hype machine is the opposite.

    According to Lambert’s post it appears that Musk bet his company’s life on high automation technology. Ironically, Musk was ensnared by the fog bank of hype surrounding the “Robots Are Coming (For Your Job, Not Mine)” crowd. He inhaled the PR about robotic automation, that it was inevitable and incipient and ready for prime time. Now he’s choking on the fumes. Automation isn’t there yet. The machines aren’t smart enough.

    We don’t even know what “smart” is, much less how to mechanize it. But an entire industry calls itself that.

    It occurs to me that Steve Jobs, despite his tremendous personal flaws, was a far superior technologist than Musk. When Apple was working on the iPhone, Jobs never hyped a product that didn’t and couldn’t exist. The iPhone was developed in strict secrecy. When Jobs presented it to the public, it did exactly what he said it did. The iPhone was an iteration on existing technology — as opposed to iterating on non-existent technology — and it was fresh, novel and useful. Tesla didn’t invent the electric car. It doesn’t have a self-driving car, either, because those don’t exist, but it sure wants us to think it will, any day now. The moment we stop believing, Tesla dies.

    1. Octopii

      The car company is having trouble. But the space company is doing very well, and is most definitely not existing solely in PR. It is executing again and again and again, lifting cargo and satellites to orbit and returning the boosters to be reused. Oh and by the way, Tesla did make electric cars cool because of the performance, styling, and mass availability.

      1. Lambert Strether Post author

        Fair enough (though SpaceX, unlike Tesla in its final assembly process, is using proven technology). I said Tesla was Musk’s vanity project, not SpaceX. So what’s your point?

        1. jonhoops

          I don’t see anyone else landing robot spacecraft and reusing them. Not exactly proven technology, at least not proven until Musk did it.

          Robots in car factories, it’s a proven technology just not to the degree he wants to do it. Perhaps Musk will fail like the previous attempts by the incumbents, or perhaps he will succeed like he did with his rockets. Jury is still out.

          1. ebbflows

            The bulwark of putting stuff into space was done by the State, Musk only attaches himself at the hip of those works and now due to ideological reasons gets funding or offsets to further such previous actions.

            Best bit is its completely anti democratic.

  6. Altandmain

    This is a bigger problem than you think
    I’ve noted this elsewhere, but it’s interesting to note that GM’s Battery design, used on the Chevy Bolt is actually less flammable.


    Because Tesla’s battery chemistry is much more flammable than GM’s and it requires more armor to deflect foreign objects.

    In this case, it would seem that Tesla’s armor has failed.

    That’s a big deal. The reason why is because electric motors and battery packs (the IP that Tesla uses is owned by Panasonic) are available everywhere. Putting together batteries is supposed to be Tesla’s core competency, it’s competitive advantage, for lack of a better term.

    If you read the analysis, GM has produced a simpler to manufacture, less flammable, and only slightly less energy dense battery pack. That’s on its first serious try too at a mainstream EV. Seeing as how Tesla is not way ahead on battery technology, what advantages does it have? Brand and marketing may be the only thing that I see.

    Another matter – Tesla vs Toyota
    Tesla is quite literally the un-Toyota.


    It is ironic that Tesla took over the factory formerly occupied by NUMMI, an icon of the Toyota Production System (TPS). In the early stages of Tesla production, Toyota sent top people to help. Yet so much of Tesla’s vision of manufacturing is completely contrary to TPS: Spend large amounts of capital to automate everything possible. Rely on hiring many engineers to make it work rather than carefully developing talent from within. Repair in quality rather than designing and building in quality. Aim for an ultrafast assembly line instead of building to the rate of customer demand (takt). Note that the idea of people continuously improving does not seem to appear in the Tesla playbook. It seems like a vision born of the machine paradigm, not Wheatley’s living system paradigm. It is also interesting that in the gigafactories “production hell,” Elon Musk developed some appreciation of the value of people in crisis management: “It has to some degree renewed my faith in humanity that the rapid evolution of progress and the ability of people to adapt rapidly is quite remarkable.”

    What Elon Musk is missing is exactly the point that has made Toyota so successful. Toyota’s living system approach is exactly what has been missing from Musk’s mechanisitic view and needs to be at the center of his vision, not as an occasional response to a crisis. Toyota is a learning organization with a long memory. In 1979, Toyota launched the Lexus LS400 with the most advanced automation in the company at its Tahara, Japan, plant, including robots in assembly doing jobs normally done by people. Sales were below expectations and the plant was underutilized. Toyota’s reflection was that the high capital costs were fixed and could not be adjusted to match demand.

    Toyota prides itself on only building to actual demand and when demand is down the company wants the flexibility to reduce costs to remain profitable. This is possible with people. While Toyota provides long-term job security for its regular team members, it uses a variable workforce of agency personnel who can be released in a sales downturn. It also plans overtime, which can be eliminated. In the Great Recession Toyota cut management pay and in some plants limited production team members to 35 paid hours a week. And Toyota can always find useful things to do with team members not needed for production, but robots simply sit idle. Since the Tahara experience, Toyota reduced automation rather than accelerated it.

    The difference is that Toyota is competent at making vehicles. Tesla … not so much, at least not at the moment, and it will have to learn from its mistakes if it is to survive.

    Another irony here. Tesla actually brushed off Toyota’s help. It’s not well known, but Toyota actually helped another high end car manufacturer that was struggling, Porsche, which adapted many of the TPS’ best practices.

    I suspect that Yves, who has worked in Japan, might be able to chime in a bit on Kaizen as well.

    The end result is obvious, if not sad.

    The luxury cars regularly require fixes 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 assembly, these individuals said, citing figures from Tesla’s internal tracking system as recently as October. Some of these people told Reuters of seeing problems as far back as 2012.

    Tesla Inc (TSLA.O) said its quality control process is unusually rigorous, designed to flag and correct the tiniest imperfections. It declined to provide post-assembly defect rates to Reuters or comment on those cited by employees.

    The world’s most efficient automakers, such as Toyota (7203.T), average post-manufacturing fixes on fewer than 10 percent of their cars, according to industry experts. Getting quality right during initial assembly is crucial, they said, because repairs waste time and money.

    Tesla now has a reputation for unreliable cars with poor fit and finish. That is entirely self inflicted. They have been shipping beta products and have made a number of pretty bad decisions.

    1. gallam

      GM did not make or design the battery pack for the Bolt. It is made and designed by LG in South Korea.

      1. Altandmain

        Will check later, but I did a fast check and you are right that LG has been doing a lot of the manufacturing. It looks like LG is the main tier 1 supplier.

        The point though is that Tesla’s core competency is supposed to be battery technology. They don’t have the technical advantage over everyone else. That is a danger. Panasonic or LG could go to another company and sell batteries for EVs.

        1. gallam

          It appears that Tesla do in fact have an advantage in the core technology of lithium ion cells (largely in their longevity I gather) although LG appear competitive.

          See this talk for an idea of what might be going on (this professor was hired on a 5 year exclusive contract supposedly):


          1. Altandmain

            How much of Tesla’s competitive advantage is actually due to Tesla though?

            The 2170 and 18650 batteries that Tesla uses are a close partnership between Tesla and Panasonic.

            Panasonic from my understanding owns the IP around the battery. Now here is the issue. Panasonic has already made a deal with Toyota.


            There is little stopping Panasonic from doing the same with other car companies.

            It should also be noted that the energy storage cells that Tesla has been selling, most notably to South Australia, are made by Samsung.

      2. John Wright

        The linked to article below is unclear about how much GM designed content there is in the Bolt battery pack, but there is some information about the pack here.


        “With the help of LG Chem, GM managed to quickly develop a long-range, appealing electric car with decent performance in an affordable price-range.”

        GM must have had strong design input into the mechanical structure, but assembling the pack might be something they would want the cell manufacturer to handle.

        BTW, we have a Bolt in the household, so we hope GM + LG did a good design job.

    2. Darius

      Musk also is hysterically ant-union. GM made peace with the UAW 80 years ago. I guess 10-percenter liberals now are “post-union,” so they and Musk are compatible.

      1. D

        Not sure that’s true, seems they just sent production offshore,, to Mexico and for some, Canada

    3. Jim Haygood

      ‘Toyota prides itself on only building to actual demand and when demand is down the company wants the flexibility to reduce costs to remain profitable.’ — lean.org

      This is about to become a vital point as the current economic expansion approaches its ninth birthday in June. Consumers are as debt-loaded as they were in 2007, even as auto sales have been goosed with sub-prime financing. Current sales volumes are not sustainable.

      Depression I during 1929-1933 wiped out dozens of marginal auto manufacturers, leaving the Big Three dominant in a shrunken field. Regulatory barriers — costly crash testing being just one example — have virtually eliminated new small-scale startups in auto manufacturing.

      Tesla’s demise in the approaching recession would rhyme with the events of ninety years ago. “A hundred dollars cash takes this Tesla Model 3 Stutz Bearcat,” as a busted stock broker’s sign read in November 1929.

      1. D

        Manufacturers sell to dealers so demand is from them, but of course dealers have demand from consumers but even that is 2nd hand

  7. paul

    You have to toff your hat to the the lachrymose billionare.

    21 million twitter followers to entertain and he still finds time to revolutionise space travel, subterranean mass transit and personal vehicles.

    I remain sceptical regarding the new life on Mars.

    “Engenigerringeez! We don’ care ’bout no steenking engenigerringeez!”

  8. none

    I believe the Tesla pack design is based partly on the knowledge that li ion cells sometimes spontaneously explode or catch on fire. The pack is made from a lot of small cells in separated compartments, so if some cells go out or burn, they shouldn’t send the whole pack up in flames. I don’t know what happens with GM which uses fewer but larger cells. I think there have been some incidents of contained battery failures (don’t know if fires were involved) in Tesla cars. The car is still functional enough to tell the driver to pull over and call Tesla’s roadside assistance.

    I wonder how often that crash attenuator has gotten hit and whether there have been previous times when the attenuator has been subsequently hit in another accident before being replaced after the first one. I’ve seen those things on the freeway before but didn’t know how they worked.

    Yeah the model 3 assembly automation story sounds like a cautionary tale.

    1. ewmayer

      “I don’t know what happens with GM”

      Did you see Altandmain’s comment above about GM’s Battery design being significantly less flammable than Tesla’s?

    2. Steve Grant

      My understanding was that the attenuator was present, but wrecked from a very recent crash when the Tesla hit it. This probably changed a survivable impact to one that was not. This also suggests there was something odd about the road layout there. These barriers might benefit from radar reflectors.

  9. Kurtismayfield

    The fire department is lucky.. if there was a large amount of Magnesium in the engine and that was on fire, it would have made it much worse. You need special flame retardant for that, otherwise the Mg fire splits the H2O and makes a Hydrogen explosion.

    No fire department should be tossing water on a modern engine until they are sure there is no Mg in the engine.

    1. oh

      Lithium metal burns when exposed to air (oxygen). Lithium metal reacts with water to form lithium hydroxide and hydrogen; same with lithium hydride. FIre departments should be very careful fighting such fires. I think one reason they use water is to cool the rest of the battery so as to try and prevent a runaway reaction.

  10. Grumpy Engineer

    The MIT article shows a fundamental misunderstanding about how battery fires work. This quote is critical: “One school of thought is that even in the absence of air there other oxidants within the battery that can create and sustain a fire. It’s thought that the battery electrodes themselves can release oxygen, fueling the fire from within. If this is the case, all firefighters can do is to work to keep the fire from spreading and wait for the reactants to burn up.

    The logic behind that statement is faulty. BATTERY FIRES DON’T REQUIRE OXYGEN!!

    Charged batteries already come with energy stored in chemical form, and if the batteries are somehow damaged in a matter that permits a short-circuit between the positive and negative cathodes, then that energy will be released in a uncontrolled manner regardless of whether or not oxygen is present. The net result is a massive and highly concentrated release of heat. This will cause nearby flammable materials that are exposed to air to promptly ignite. But even if those material are submersed in water, there can be enough heat to boil the water away, thus permitting subsequent (re-)ignition.

    Battery fires are scary. Once temperatures rise enough to break down insulators between positive and negative cathodes in various sections of the battery, it’s pretty much “game over”. You have to wait until all the stored chemical energy is fully released (and all flames extinguished) before claiming that the fire is truly out.

    And just wait until we start deploying really big batteries for grid energy storage purposes: https://www.windpowermonthly.com/article/1284038/analysis-first-wind-project-avoids-storage-30m-fire. If you read the article carefully, you’ll discover that they had THREE different fires at that site in Hawaii before finally giving up. The video is impressive to watch.

    Battery fires as an externality, indeed.

    1. Altandmain

      I’m wondering if the aluminum used in the Tesla cars could add to the fire.

      It does seem like we will need a safe way to store energy that was generated by intermittent renewable energy sources in a way that it can be safely accessible and with minimal storage efficiency losses.

      1. Grumpy Engineer

        Aluminum indeed releases heat exothermically when it is melted, vaporized, and then allowed to react with atmospheric oxygen. [Steel and copper do to, BTW, albeit with lower combustion energies.] However, it won’t generate self-sustaining flames unless a ludicrous amount of energy is initially pumped in, which even a short-circuiting 70-kWh Telsa battery cannot do. There is too little surface area and too much ability for the solid aluminum to conduct heat away. [Aluminum powder, on the other hand, can burn most impressively. Magnesium is even worse.]

        So as a general rule, the batteries themselves and other flammables (such as cloth seat covers, plastic trim, carpet, tires, etc.) are the primary hazards in EV fires. Which still adds up to an alarming amount of fire hazard. Oxidizing metal just adds a little more energy to the fire.

        As for storing energy from intermittent renewable energy sources, it can be done safely, but I fear it’s going to be much more expensive than people realize. A large battery station really ought to have each battery segment isolated mechanically and thermally in a ceramic-lined silo so that if one segment develops an internal fault and catches fire, it can burn out completely without affecting adjacent segments. This tactic clearly wasn’t used at the battery station in Hawaii where the big fire occurred. Likely to save space, cost, and time. And alas, using a silo-based isolation scheme in a car battery isn’t practical at all.

        1. Altandmain

          The good news is that the aluminum cannot add to the conflagration then and I suppose that the body panels act as a heatsink (aluminum is a pretty good conductor of heat).

          The bad news is the green future is much more difficult than is being hyped. Batteries can easily have a self sustaining fire even starved of oxygen it would seem. So even if solar and wind continue their admittedly impressive fall in price, the intermittent nature of the energy would be the big problem.

          It will be a make or break matter. Can it be done in a reliable way that is cost effective? Perhaps we need to look at alternatives to battery storage then. For an entire nation to be dependent on renewable energy, we would need many orders of magnitude more storage than we have.

          From a variety standpoint, the collision of battery powered EVs is going to be a lot worse than gasoline for the near future, unless something else can store the energy. Perhaps a flywheel? The issue I see is how to contain the batteries so that it is only locally a fire and does not ignite the entire battery pack. What would happen in a car pile on with EVs? What about the Tesla trucks that they are showing? Those would have an even larger battery pack.

          Sadly we don’t have room temperature superconductors….

  11. gallam

    I’m sorry to say that I think this is the worst article that I have ever read on Naked Capitalism.

    It makes the perfect an enemy of the good. There was a battery fire in the accident involving the Model X, and Autopilot was active at the time of the accident. This simple fact says absolutely nothing about how dangerous electric cars are versus eg petrol powered cars, diesel cars or horses. My cursory examination of the statistics suggests that there were a large number of petrol-powered vehicle fires on the same day in the USA. Perhaps other readers could chime in with a few detailed stats. There may be greater costs involved in a battery fire than a petrol fire, but I doubt it when you count the value of a human life in the total expected costs of an accident in a Tesla versus its competitors.

    In relation to the excessive automation “issue”, this appears to me to be a choice by the management and in a way could be described as the ultimate expression of Kaizen. Removing people from a production process is clearly the end goal of all efforts at automation. Good luck to Tesla with this endeavour and I hope that they succeed. The market in the end will decide how important the supposed lack of quality is. As it stands in the USA the Tesla Model S is simply wiping the floor with all of its competitors (BMW 7 Series, Mercedes S Class and Audi A8). Perhaps the author could offer us an explanation for why this is.

    1. Lambert Strether Post author

      > I’m sorry to say that I think this is the worst article that I have ever read on Naked Capitalism.

      Thank you for sharing your views — after all, an intense reaction is better than no reaction — but I’d feel better if you showed evidence that you had actually read the piece.

      > There was a battery fire in the accident involving the Model X, and Autopilot was active at the time of the accident. This simple fact says absolutely nothing about how dangerous electric cars are versus eg petrol powered cars, diesel cars or horses

      Very true. I placed the word “externality” in the headline for a reason; the issue isn’t whether EVs are more dangerous; the issue is the cost to be born by government in terms of the more complex requirements posed by battery fires when EV usage has scaled. Given the minuscule percentage of EVs actually on the road, I’m not sure we put a dollar figure to the cost, but if I think of what that equipment would cost my small town, I worry.

      > In relation to the excessive automation “issue”, this appears to me to be a choice by the management

      It certainly is. It’s not clear to me why you would put issue in source quotes. The people raising it are experienced in the industry and make cogent points. Your “hope” for Tesla’s success is beside the point.

      Finally, you urge that Tesla is selling well. It may well be that build quality is irrelevant (though why, if it is, it figures in reviews is open to question; note that build quality issues affect the touch screen as well, which affects the functioning of the vehicle, and so is not cosmetic). I agree that Elon Musk is a terrific marketer who has built a cult following. What that has to do with Tesla’s seeming inability to automate the final assembly, or the significant externalities from EV batteries, I am unable to determine. But I won’t say this is the worst comment I’ve ever read; for one thing, it’s not true; and it would be churlish.

      NOTE Here are the sales figures for the Model S and its competitors from 2016 (the most recent I can find on a quick search):

      Whether Tesla is “wiping the floor with” vs. Mercedes is one for the judges, I suppose.

      1. ebbflows

        Tesla Model S vs. Benz S class, phew that’s not even a reasonable comparison. Not to mention what market are we talking about.

        1. ebbflows

          Just to clarify the Model S is not even in the S class bracket, its like an old Mustang vs a top shelf European make in its day. Hell its like a dogbox house compared to something that will last more than a single generation because financialization has devolved housing into a white good worth the warranty e.g. RE flipping.

      2. ebbflows

        Then there is this:

        Out of the 30 names which applied for autonomous vehicle testing permits in April 2017, 11 were not established auto makers or suppliers. The most recent eight permits to the contrary were issued to non-auto technology-type firms.

        What are the implications of this?

        Well, the first is that non-auto players may have a slightly larger incentive to bring autonomous electric vehicles to market quickly.

        But the second, simply put, is this:

        Some of the tech firms listed above have well established business models focused on content or data (e.g. paid search) and thus could potentially offer a shared, automated, electric transport service at a loss just to get access to the vast quantities of data and consumer time. If Tesla gets to a point where it is offering its vehicles and/or mobility services in a region of the country or in a metropolitan area at a competitive price, there may be other very large firms that could offer a similar service at an even lower price due to the significant value those companies could extract from the vehicle and passenger data. Once again, time will tell if there is room for coexistence. But we believe today’s auto firms, in their current form at least, will have a difficult time competing along such lines.

        Which implies tech corporations are mostly being inspired to reinvent the wheel and other existing technology just so as to better capture your data from you.

        Of course, it won’t just be Tesla who will have a difficult time competing with manufacturers prepared to flood the market at cost for the sake of luring people like guinea pigs into data collections machines, it will also be traditional automakers.

        The difference with traditional automakers is… they at least will have their legacy muscle car reputation to draw on and might still appear appealing to those who don’t want to be data tracked everywhere and feel value in owning their cars completely.


        Behavioral economics singularity with M – M bolt on crapfest and some people think its about the product, we are the product. Hence why so many technoglibertarian utopian gadgets are sold at a loss, it has no correlation with past historical norms, due to the income streams the data represents.

        1. cnchal


          Joseph Coughlin, director of the AgeLab at the Massachusetts Institute of Technology in Cambridge, predicts that companies will have a powerful incentive to do so. “The most valuable thing coming from AV technology is trapped attention,” he says. “If I’m Amazon and I have your undivided attention for an hour, I will figure out a way to eliminate motion sickness and remove all the other obstacles to enjoying the ride so that I can sell you things.”

        2. oh

          Every “product” that Google has brought out has been to snoop on the users (the real product) and sell the data. Gmail, Google maps, Youtube (which they bought), Nest, Google’s and other Android phones, Google fiber…….and many more. Amazon, Facebook, Linkedin, and all the free apps are the same. We have to start closing the door on these companies.

      3. gallam

        “Very true. I placed the word “externality” in the headline for a reason; the issue isn’t whether EVs are more dangerous; the issue is the cost to be born by government in terms of the more complex requirements posed by battery fires when EV usage has scaled. Given the minuscule percentage of EVs actually on the road, I’m not sure we put a dollar figure to the cost, but if I think of what that equipment would cost my small town, I worry.”

        All cars have externalities associated with their use. I have heard a lot of lame objections to the electric car, but the possibility that your local fire department may have to use different equipement and more water when there is a major accident takes the biscuit. Clearly we all have to travel, so simply pointing out that electric cars carry externalities is vacuous. The issue is whether or not electric cars carry greater externalities than other modes of transport. If you worry about the fire department’s equipement bill, you are going to have a heart attack if you happen to pay a visit to one of the many regions around the world being impacted by climate change. Now that is an externality that you can really get your teeth into.

        “Finally, you urge that Tesla is selling well.”

        I’m not urging anything. They are a startup manufacturer outselling businesses that have been operating (in some cases) for well over a century, and they are doing this in the most expensive market niche. You kindly produce the sales figures which demonstrates this and everyone reading this article already knows it.

        “It may well be that build quality is irrelevant (though why, if it is, it figures in reviews is open to question; note that build quality issues affect the touch screen as well, which affects the functioning of the vehicle, and so is not cosmetic). I agree that Elon Musk is a terrific marketer who has built a cult following.”

        I could if I wished buy a Tesla. Build quality is not irrelevant to me, nor to the other people who are considering such. By and large people deciding to spend $100k on a car are not stupid or ignorant, or susceptible to “cult” marketing hype. I again invite you to ponder on the reasons why the Tesla Model S is selling so well.

        By the way, I happen to know a few senior executives at Mercedes and BMW. My description of the Tesla Model S “wiping the floor” with their products is not a word for word transcription of their opinions, but it certainly captures the gist of them.

        1. jsn

          “By and large people deciding to spend $100k on a car are not stupid or ignorant, or susceptible to “cult” marketing hype.”

          That pretty much says what remains to be said.

          1. bob

            Tone police.

            “How dare you!”

            “Do you know who I (we) am?”

            “it certainly captures the gist”


        2. ebbflows

          “By and large people deciding to spend $100k on a car are not stupid or ignorant, or susceptible to “cult” marketing hype.”

          Curious how marketing targets wealth via Veblen Goods.

  12. VietnamVet

    An extraordinary amount of money and intellect are consciously being spent to remove humans from manufacturing and transportation rather than increasing safety and efficiency. The intensity is frightening. The Tesla was brought to the dealer to fix the autopilot that swiveled the car seven to 10 times toward the same exact barrier. Rather than turning autopilot off, the Apple Engineer, I surmise, wanted to find and fix the bug. But, instead he died in Silicon Valley’s quest for a dystopian future without labor. A world without a purpose in life for human beings.

    1. Darius

      That’s a particularly American obsession. I’m visiting Tokyo, where the street trees are meticulously pruned. That takes labor. In the US, the only attention a street tree gets is when it dies and is cut down.

      1. JTMcPhee

        Don’t forget all the dogs and drunks that pee on said trees, helping them “just die.” And the stamping feet that compact the root spaces. And the effects of all that other human effluvium that lands on the canopy and infiltrates the soil.

  13. The Rev Kev

    I won’t say much about the lithium ion batteries except to say that if they spontaneously ignite from time to time, then it is because they have been pushed into production before they understood the science of how they work. I went looking for the video clip of that Tesla fire and found another one from Germany a few months ago (https://www.youtube.com/watch?v=YzfxZMXRG38). Maybe Tesla just hates Fire Departments which is why one of their cars crashed into a big red fire truck because the car couldn’t “see” it.
    It seems to be a dream of Silicon Valley to get rid of all workers and replace them with robots guided by AIs. Elon’s factory is just the latest attempt at pushing this agenda forward and he had as much luck as an IBM engineer becoming a farmer. This is not something that you can just keeping throwing engineers at and expect that problem to be solved. You wonder if he has even heard of W. Edwards Deming or even the Japanese concept of kaizan. Humans are where they are because they adapt. Machines don’t
    Maybe a quote here might help. The science fiction writer Robert A. Heinlein once wrote: “A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.”
    And may I add also for robot car assembly machines?

    1. oh

      When Edward Deming pioneered quality control techniques most American companies showed little interest. The Japanese on the other hand adopted his techniques. They worship Deming.

  14. Pavel

    Well at 3:02PM on April 1st, @ElonMusk thought it would be fun for TSLA sharefholders if he made an April Fool’s joke on Twitter:

    Tesla Goes Bankrupt Palo Alto, California, April 1, 2018 — Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt. So bankrupt, you can’t believe it.

    As you can imagine the joke is getting mixed reviews.

  15. Larry

    The stories about how Tesla tried to push robotics and automation to unheard of levels in the industry is particularly damning. It explains their inability to hit targets project years out after consuming gobs of capital in an industry that is really mature. Maybe it also explains the rats fleeing the ship, errr, the high level executives seeking greener pastures (and potentially cashing in their options).


    I was finally able to convince a college friend to retrieve his $1000 dollar down payment on a Model 3. Said friend is a programmer who this winter said he can’t wait until Tesla is doing all the driving for us because people are so bad at driving. So he was firmly in the eating out of Elon’s palm camp. For him to come around and claim back is money is something else. Granted, it’s just one person, but I have to think other deposit holders are taking similar action, or at least thinking about it with the recent news.

      1. Larry

        I don’t believe they ever break out changes in the deposit holder count. I would assume most of this cash has been consumed, given that the deposits are not in escrow and do not bear the line holder any interest. For my friend, I kept stressing those two points and said he was better off putting his money into an interest bearing account of some sort and then using the money to buy the Model 3 when it became available to purchase.

    1. PlutoniumKun

      Unfortunately, flow batteries mostly lack the energy density required for vehicles – they are much more suitable for constant flow uses (grid storage). They also need to be discharged regularly, so you couldn’t let a car sit outside charged for a week or so if you didn’t need it.

      As so often happens in technology, less than ideal technologies (gasoline engines, VHS, water cooled nuclear reactors, 26″ mountain bike wheels etc) often ‘win’ races to become the standard not because they are best, but because they were chosen first by major purchasers and so built up manufacturing scales before better technologies could get a foothold. The key advantage of lithium batteries – a very high power to weight ratio – has led to them ‘winning’ the race for all development money, when arguably there are more fruitful routes in the long run.

      1. bronco

        What do you mean VHS? Compared to beta? Because I think as far as data storage VHS beats DVD by lightyears at least if you actually want to watch the movie a few years later

        1. Altandmain

          VHS was inferior to Betamax. It was an old format war and the inferior standard won.

          1. bronco

            i know I mean even though VHS is worse that betamax its still better than the dvd format that replaced it

  16. pat b

    I’m not a Tesla FanBoy….I’m not a Elon FanBoy….

    I suspect the Tesla team will nail down the automation of the batteries, motors and the skateboard.

    That will be a big part of the cost, and it’s why the majors are looking at EVs.
    An EV has 8 moving parts in the primary drive line, vs 2000 in a gas engine. That’s 25X less operations.
    The batteries will likely be the same thing.
    Then that gets welded onto the skateboard.

    Thats’ all the expensive stuff. Even if they dial down the automated line for body work, that’s not the expensive part.

    As for the battery, battery tech is moving so fast, it becomes hard to say…

    1. Lambert Strether Post author

      > I suspect the Tesla team will nail down the automation of the batteries, motors and the skateboard.

      Leaving the final assembly automation issue unsolved. So we agree!

      1. pat b

        “Even if they dial down the automated line for body work, that’s not the expensive part.”

        All the high value stuff is in the skateboard, which is tractable to automation.

        The body line isn’t the big cost, it’s why GM has Assembly plants everywhere but very few Axle,Transmission, engine, cockpit plants.

    2. PlutoniumKun

      I think the evidence suggests that Tesla will suffer the fate of many pioneer companies. They make the mistakes first, allowing bigger and more patient companies to sweep up the pieces. I’m no fan of the major car companies, but they’ve given themselves time to assess EV alternatives and are working hard with specialist battery companies around the world. When they go big-time into EV’s (as they will certainly do), then they’ll produce better, cheaper cars than Tesla.

      My guess is that under the guise of a ‘merger’, the Tesla brand will be bought up by a VW or Fiat/Chrysler, and quietly absorbed into their bigger, more efficient supply chains. Renault/Nissan and BMW have been investing heavily for years in EV’s, so will likely be able to produce better cars soon without needing Teslas name.

      Having said all that, for all the bashing Musk gets on these pages, I think Tesla have been very important in advancing EV’s much faster than if the big car companies were left to their devices. We can only hope that nobody famous gets incinerated in a battery fire quickly to allow the gas guzzler fans to say ‘I told you so’.

      1. Lambert Strether Post author

        I’m not a gas guzzler fan either, but I’m also not a fan of Silicon Valley’s cheerful willingness to hand me the bill for its externalities (AirBnB is another very obvious example, here). And I’m not sure that “faster” is better. I know that first mover advantage is great for firms (at least the tournament winners), but surely that’s not the only possible perspective? (I’m also not at all confident that capital allocation, society-wide, is anything like sane. Uber is the current example, but we can go all the way back to the housing crisis, with all those styrofoam pediments and crap shacks. I tend to throw Elon’s robots into the same bucket, though it seems he’s driven by hubris, and not fraud.)

        1. PlutoniumKun

          Yes, I think I used the wrong term with ‘first mover’ advantage (or disadvantage), as there are many interpretations of what that actually means. The reason I’m not as down on Musk as most of the other Silicon Valley ‘entrepreneurs’ is that at least he has tried to build real things (and has often succeeded). Of course, his usual SV blindspots means his company is both doomed, and ultimately damaging – as you rightly say, so much of what he does is all about free-riding on the externalities (although every single car company has always done that).

          But I’ve been following EV car technology for decades – and it was constantly blighted by active sabotage by the car and fossil fuel majors. Given that the car majors would never move by themselves, it was always clear that progress would only be made if governments forced them (unlikely), or an outside player scared them into acting. For all his faults, Musk has been that outside player (aided of course by VW’s malign stupidity over diesel).

          I think that Musks main tech failure has actually been that he was not radical enough. He focused entirely on getting more power into a fairly conventional car. A genuine car revolution would be to get away from metal vehicles and produce simpler, lighter composite vehicles which need much less battery power, with a leasing/renting model rather than outright purchases. Ironically enough, its the likes of Google and Uber who are looking at that side of technology, although of course they are blinded by the self-driving bezzle. I believe that Steve Jobs was very interested in that idea, but after his death Apple instead invested in a more conventional car design, which of course has now quietly been shelved.

          1. Lambert Strether Post author

            > I think that Musks main tech failure has actually been that he was not radical enough. He focused entirely on getting more power into a fairly conventional car.

            That’s a good point (and maybe if Musk had had a Xerox PARC to draw on, he would have been Steve Jobs).

            This reminds me of a very old Phillip K. Dick novel, an alternative world from our own where a different primate species was dominant, and they had a taboo about taking oil or minerals out of the earth. So they built steam-powered airplanes, with flapping wings, out of wood… Maybe not such a bad outcome, all things considered?

      2. Larry

        I don’t know that Elon really shook the major automotive makers. Consider that the fuel sipping Prius has been with us for two decades, with improvements in fuel consumption and options (plug in hybrid) continuing apace. Chevy has successfully marketed the Volt for quite some time as well. I had a colleague who drove his Volt only in Electric mode because he had one of those average communtes of 34 miles round trip. Or what of China, which is largely a closed market to Tesla, but is driving a huge shift to electric vehicles by government decree?

        Musk showed that electric vehicles could be marketed to a small group of well heeled individuals as long as they had performance and conspicuously displayed their environmental warrior bona fides. Nice that his companies can perpetuate the myth that environmental crisis can be delayed/stopped through personal consumption.

        But being a technology futurist seems to damage the company quite a bit. Autopilot is starting to have some major backlash while at the same time seeming not that far ahead of other manufacturers. While having fewer complicated parts (transmission etc), he has seemingly built a more complicated manufacturing process than any experienced automaker would find successful.

    3. Altandmain

      Given the poor reliability of existing Tesla vehicles, having a lot fewer moving parts has not translated into a more reliable vehicle this far.

      Looking at the Tesla blogs of Model S and X owners, it is common to go through several electric motors before the warranty expires.

      If what you have implied what correct, then Tesla should be putting Toyota to shame in terms of reliability. The opposite is happening.

      While electric cars are theoretically more reliable, it has not translated into real world advantages for Tesla.

  17. PlutoniumKun

    Just a point of clarification – the article seems to imply that most car fires are from accidents. I can’t find precise figures, but so far as I am aware the vast majority of car fires are non-accident related (at least post Ford Pinto). They are usually caused by fuel/lubricant leaks, either from contact with hot parts or from the electrics (lets not forget that all cars have batteries, not just EV’s). I don’t really know if Teslas claim of much less fire risk is based on ‘all causes/all age’ cars, or just on simulations of accidents.

    Something like 20% of all fires requiring a fire service call out involve cars. Car fires are incredibly common, and proportionately very environmentally damaging. I very much doubt that even in the worst case scenario EV’s would make this worse.

    1. Lambert Strether Post author

      > Something like 20% of all fires requiring a fire service call out involve cars. Car fires are incredibly common, and proportionately very environmentally damaging. I very much doubt that even in the worst case scenario EV’s would make this worse.

      I think they can, because a battery fire is worse than a gasoline fire in many ways. Look what the firefighters had to do! The steps are right in the post.

      1. Grumpy Engineer

        Battery fires are indeed worse, as they are much more difficult to extinguish. If you can get enough foam or powder on top of a gasoline fire and cut off the oxygen, it goes out. There is a small chance of re-ignition from nearby hot metal, but a little bit of extra water will generally take care of that.

        Battery fires are a whole different ballgame. Overheated batteries can continue dumping energy into the fire regardless of the state of water or foam or powder or oxygen on top. And if it gets hot enough to affect the entire battery pack, you’re generally looking a massive energy release that will completely destroy the vehicle. Much like we see in the photos above. And the fire department has to wait around for hours until they are 100% confident that all of stored energy in the batteries has been safely isolated or was released in the fire.

        I’ve see a gasoline fire in the engine compartment of a car. It was much like PlutoniumKun described: a leaking fuel line dripping gasoline onto a hot exhaust manifold. The flames shot a few feet high, and we put it out with a hand-held class ABC fire extinguisher in less than two minutes. We didn’t have to stand there for hours afterward, worrying that a subsequent fault might re-ignite the fire and cause the entire gas tank to light up. That’s essentially the concern with battery fires.

        1. marku52

          LI batteries are preferred because they are hi energy density. Hi energy density materials tend to be dangerous, its their nature. Gasoline, dynamite, Lithium Ion….

          What makes batteries worse, as GE points out, is the capability in failure for possibly the entire “tank” of energy to be released in the event. Any internal short will do that.

          If you want some excitement in your life, put a wrench across the terminals of a regular car battery. Now imagine the results if that battery was 100 times more powerful.

  18. tryfon

    The article makes two main points:
    1. The cost of dealing with chemical battery fires might be too big, much larger than the one we are currently facing. Even though it is a thought provoking argument it fails to convince. For it to be convincing it should have included at least some numbers and projections with some plausible premises which it doesn’t, failing the expectations the reader has for this blog. Apart from that, it is also not fair, as for it to be fair it should at least mention how the expected advances in driving automation and self-protection systems will affect the costs of dealing with accidents, both due to nature and volume. Never mind the expected advances in battery technology and super-capacitors.
    2. The second argument is that Tesla will fail to achieve full production automation and therefore fail to meet production volume and quality goals. This is much more interesting for me and it is a valid point, good enough documented by the author. Personally though, I will prefer to bet that Tesla will make it and become for another time a successful pioneer. Musk has proven time and again that when he estimates that a certain technology is mature enough to become a viable product he eventually delivers. The fact that Tesla doesn’t have the history, tradition and know-how of big car manufacturers can also be an advantage, but the author chooses to focus exclusively on the down side.

  19. Ignacio

    More suitable for a post on Uber than TESLA:

    Fleet of automated electric taxis could deliver environmental and energy benefits

    It seems this article is based on a model that rules out safety issues with automated cars. It also seems that most benefits come from sharing vehicles. I am sympathetic to the idea of sharing EVs in large cities, nevertheless automating is quite a difficult challenge.

    Electric motorbikes are being used in Madrid to gain access to metro stations from remote places…

    I don’t know but there are so many posibilities for urban transport, and may be they are all needed to serve complex commuting necessities.

    More on the subject:

    I think it is too early to call for particular externalities on fire extintion when EVs involved unless it is foreseen that Tesla becomes dominant. So far, most companies are reluctant to follow Teslas’ strategy of giant lithium batteries for several reasons.

  20. Yves Smith

    I apologize to jsn. I had to rip out a comment by a reader D, who is a troll we’ve banned. Banned is banned, which means any comments that manage to get through are expunged.

    Sadly, the way our software work is if anyone has replied to a comment, we have to rip that comment out too (first) in order to trash the offending comment. If we don’t do it that way, all the comments below that will not nest.

    So that mean the helpful comment by jsn also had to go. Very sorry.

    1. blennylips

      Having built many a software straightjacket myself, I sympathize with your problem.

      How about replacing the offending text with Lorem Ipsum to leave the nested structure intact?

      “Neque porro quisquam est qui dolorem ipsum quia dolor sit amet, consectetur, adipisci velit…”
      “There is no one who loves pain itself, who seeks after it and wants to have it, simply because it is pain…”

    2. jsn

      Thank you Yves! You may or may not have noticed the Pat Lang over at SST has ended comments due to a troll deluge. I deeply appreciate everything everyone at NC does to sustain this great information source and reality check!

  21. JE

    As a researcher into sensing technologies and specifically bio-inspired tactile sensing, I’d like to amplify the points of Lambert’s article on the difficulties of automating final assembly. The human combination of visual and tactile (not to mention audio) feedback when handling and assembling cannot be overstated in its impressive capabilities. Think about the last time you disassembled a portion of your car interior to fix something and the kinds of snap fasteners you had to carefully disengage. There were a lot (to minimize resonances on a flimsy plastic part and thus noise) and they were fairly fragile (cheap) and a few required harsh language to coerce. At some point the differences in design philosophies between biologic and robotic systems are too different to create analogous capabilities. Tactile feedback is one example. Our sense of touch is too amazing for robots to duplicate in any but the crudest way, at least today. Robots have great vision systems, but the fusion of the two give humans an edge that as noted, leads to incredible advantages. Overall, the capabilities of automation have grown by leaps and bounds but is still hampered by a need for a certain amount of structure to the task. Each unstructured aspect that must be accommodated (wire position, adhesive flow, part orientation, tolerance of position, insertion force, warp, etc) increases the complexity of the automation task and some require sensor feedback and adaptive programming to accommodate. Some of this can be accommodated through part design, instead of designing a radio bezel for hand installation, rethink for robots, make cosmetic changes that highlight this (turn a bug into a feature!) or otherwise change the way a car is designed to reflect the way it will ultimately be put together. A learning process all around. As automation capabilities grow, learning on design for automation will too, and eventually I am certain that a car can be designed and a manufacturing process developed together to make a car capable of being assembled by automation. Will that be accomplished by Tesla? It’s not looking good, but it’s been and will continue to be interesting.

  22. uxxx

    Re: externality

    If any non-trivial Tesla crash requires hazmat team on call, and the car is a tinderbox/firetrap, and costs a fortune to repair, it will show up in insurance.

    Say an F150 crashes into a Tesla. Truck’s fault. Doesn’t matter – the same 2 or 3 insurance companies have to pick up the bill either way. Obvious example: both the F150 and the Tesla are insured by Geico — in that case, from the insurance P&L point of view, it doesn’t really matter who’s fault it is. The actuaries will figure out which cars are “risky” real fast.

    Right now there are on the order of 100k (?) teslas on the road, so the rate of catastrophic accidents is low. When there are millions out there, the routine accident numbers become statistically significant and insurance implications will be un-ignorable.

    Re: manufacturing

    I’m an engineer FWIW, and I happen to think Tesla is well equipped to sort out the technical issues. Fixing the robotics is the relatively easy part- getting the supply chains and project management to operate smoothly is the hard part of running a car company. They’ll find a way to crank out the volume of cars they need. They’ll be late and burn more money, but don’t count them out – as long as they make their sales volumes and grow the top line, the bond market will lend them more.

    Their angle on the business is about brand image – as long as that stays strong, they can spare the extra cost of doing it their way. The vehicle is a fashion statement / status symbol after all – utilitarian buyers can go drive the Chevy or Nissan.

    1. Yves Smith

      Regarding your comment about Tesla being “well equipped to sort out the technical issues,” I don’t see how you come to that conclusion. You seem to be falling into a common fallacy: “In theory, there is no difference between theory and practice. In practice, there is.”

      Tesla is ideologically committed to hyper-automated production. Companies with orders of magnitude more individual and collective experience in manufacturing have failed at that, as Lambert pointed out. There is no indication that Tesla has or is prepared to abandon that as a priority. Until it does that, Tesla will make no large gains in its production quality or its efficiencies.

      1. uxxx

        “Companies with orders of magnitude more individual and collective experience in manufacturing have failed at that”

        They went over time and over budget, had to scale back their ambitions, and failed to turn a profit on the operation. I don’t think profitability is a short term imperative for Tesla.

        “There is no indication that Tesla has or is prepared to abandon that as a priority.” What makes you so sure of that? Business is business – If a small percentage of their automation fails to work they’re not just going to give up on the whole thing, they’ll plug the leaks with humans – like any other operator. Maybe slow down the line a tiny bit from the max rate that robotics can do. Their current production rate goals (5000/week) are compatible with conventional production if need be, they just want to do it the Elon Musk way.

        Also, the videos we see of body fabrication and final assembly and are just a small part of the labor – most of which by far is in the subassemblies. (e.g., video of a dash assembly being popped in – that thing has hundreds of parts. same for drivetrains, suspension, batteries, seats, doors, trim, wiring, HVAC, under-the-hood guts, etc). Those probably come from south of the border anyway, with very substantial human labor. Maybe the sub’s are cobbled together in-house until the multi-tier suppliers come through- That’s probably the bottleneck as much as the robots.

        What’ll happen is the automation guys programming the robots will tell the designers to tweak the design of the subassemblies, to make the final assembly process flow nicely. Then the supply network gets hit with lead times to get that change through, and during that interim period there is chaos while subassembly stock is reworked, or temporary patches are put into the assembly line with a mix of old and new parts. This is all routine when ramping up production of anything non-trivial. The Japanese companies, after years of this, have gotten *really* good at project-managing these types of issues. Tesla not yet, obviously. But they’ll learn (like GM did), as long as the capital keeps flowing.

        1. Lambert Strether Post author

          I wish this “ramping up” talking point would go away. The point of the critique from Bernstein and others is that highly automated production will fail, and they point to history. Presumably if there were a secret sauce* for highly automated final assembly it would already have been found. “Ramping up” assumes precisely what can’t be proved. The argument: Tesla final assembly can no more “ramp up” than an airplane can “take off” with only one wing.

          * Other than Tesla’s fan bois accepting shitty build quality; if that becomes the new normal, that’s the secret sauce.

  23. Jim Haygood

    TSLA is down another 6.5% in late Monday morning trade, as Musk’s “we’re bankrupt” April Fools tweet is taken literally by some (including me).

    Cord, Tucker, Tesla — what do these three marques have in common?

  24. John

    The car hit the center medium head-on while there is a solid white line to the left of the car, I highly doubt it was on Autopilot.

    From the looks of it, and the fact that the collision was head on, there’s noway he could’ve survived this collision even if there was no fire involved. The entire front was totally dismembered and deposited all over the highway.

    As for the fire. When you have any sort of energy storage device, be it a gas tank or a battery, if that energy is able to propel a 2+ ton vehicle for three hundred miles, expect a massive fireball. The energy needs to dissipate somehow. Currently batteries are still safer than gasoline. In other Tesla accidents, the driver had time to pull over and safely exit his car while his battery pack combusted in a timeframe of two hours, gasoline would’ve been instant. Battery tech will only get better as time goes by.

    -John from InsurancePanda.com

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