Elon Musk Says Car Production Is “Hard”

Elon Musk Says Car Production Is Hard

The billionaire CEO pointed to his experience at Tesla.

Among the hundreds of carmakers worldwide, few are as self-assured as Elon Musk, the CEO of the world’s top electric car manufacturing company. That’s why Musk’s comment on car production being “hard” turned heads. 

On September 7, 2021, Musk shared an excerpt from British inventor James Dyson’s new book. In the book, Dyson spoke about his eponymous company’s failure at making an electric car. Musk could sympathize. While sharing the excerpt, Musk tweeted, “Production is hard.” He added that production along with generating positive cash flow (when more money flows into your business than out of it) is “extremely hard”.

Car production is all the more challenging for startups

Musk went on to add that large carmakers sell their cars at low to zero true profit margins, meaning that there is barely any profitability. “Most of their profit is selling replacement parts to their fleet, of which 70 percent to 80 percent are past warranty,” he shared. New car companies do not even have this advantage. Additionally, he mentioned, new companies also lack sales and service infrastructure.

In a 2018 Vox interview, Musk noted, “As a startup, a car company, it is far more difficult to be successful than if you’re an established, entrenched brand.” In general, he said that it is “incredibly difficult” to survive as a car company. Even companies with a strong customer base, dealers and service providers fail. According to him, that’s because they spend their capital in their factories and often go bankrupt. So, evidently, it is not any easier for startups.

Manufacturing cars at Tesla: the trials, tribulations and triumphs

Musk’s experience in building cars at Tesla has been “excruciating”. So much so that he finds it absolutely “absurd” that Tesla is still alive. 

During a webcast, he compared car manufacturing to eating “a lot of glass”—painful and difficult. He expounded, “There are 10,000 unique parts and processes that have to work.” Even if one part is missing, the car cannot be shipped. He illustrated that chip shortages are just one of the many supply chain problems for car manufacturers. “For example, a big struggle this quarter was the module that controls the airbags and the seat belts. And obviously, you cannot ship a car without those. That limited our production severely worldwide in Shanghai and in Fremont,” he said.

Still, he feels that Tesla’s success has been remarkable. That’s not because Tesla made an electric car or became a noteworthy startup. Instead, he finds it remarkable because, through it all, Tesla didn’t go “bankrupt in reaching volume production”.

For aspiring car manufacturers…

Excelling in the automotive industry is no easy feat. In May 2021, Musk tweeted that “prototypes are easy, and production is hard”. It’s no wonder that he could identify with Dyson’s failed attempts at making an electric car.

Indian billionaire Anand Mahindra, Chairman of Mahindra and Mahindra, a car manufacturing company, also echoed the sentiment. Responding to Musk’s tweet, he wrote, “You said it, @elonmusk. And we’ve been doing that for decades now. Still sweating and slaving away at it.” He added, “It’s our way of life.”

Header Image by Flickr

SHARE THIS STORY

Share on facebook
Share on twitter
Share on linkedin
Share on email

RELATED POSTS

How Can Entrepreneurs Overcome Loneliness?

How Can Entrepreneurs Overcome Loneliness?

Starting your own business is a project that will take over most of your life. You are straying away from the typical 9-5 jobs that your friends and family may have. The sheer effort you have to make to get a business up and running will leave you feeling lonely. While it might seem almost expected to feel lonely during your startup journey, loneliness is a slippery slope to several health conditions.

8 Techniques to Get Readers Rolling Right into Your Content

8 Techniques to Get Readers Rolling Right into Your Content

We’ve all been there. We’ve spent hours crafting the perfect blog post, article or white paper, but no one is reading it. Why? It could be for a million reasons, but often it’s because we’re not doing enough to get people to come to our content. In this article, we’ll learn about the eight techniques that will help you draw in readers and get your content read!

Amazon vs Flipkart Who Will Win Festival Sale War in India

Amazon vs. Flipkart: Who Will Win the Big Festival Sale War in India?

Amazon India and Flipkart, the two biggest ecommerce giants in India, have always been in a neck-to-neck competition for supremacy in the country. There is no better occasion to showcase their strength and take advantage of people’s shopping mood than during the Indian festive season, which begins in late September featuring various festivals, like Durga Pooja, Dussehra and Diwali.

Reviewing Top AI Boyfriends on Google Play Store

Anima vs. Replika: Reviewing Top AI Boyfriends on Google Play Store

Finding your perfect match can be a long and tedious process. You can go on date after date and still have a long way to go before you find your soulmate. In the meantime, you can curb your loneliness by speaking to an artificial intelligence (AI) chatbot.There are dozens of AI chatbots on the market today that give you the experience of having someone to vent your issues to and discuss your daily lives with.

Shrinkflation

What Is “Shrinkflation” and Why Opting For It Isn’t Companies’ Only Choice

You might have noticed grocery prices are soaring, or your usual go-to pack of chips is shrinking in size—all thanks to massive inflation. As of August 2022, the U.S. consumer price index (CPI), which measures the change in consumer prices for a specific set of goods over a period, has increased by 8.3% (year-on-year). Although it has gone down slightly from 8.6% in May, the highest it has ever been since 1981, it remains high and worrying.