Elon Musk on Model 3: 'We're going to go through at least 6 months of production hell'

• Matthew DeBord
 

• Jul. 29, 2017, 12:10 AM
• 7,240
 

It's going to he hard to build. At first.Tesla

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At a press conference prior to Friday's Model 3 handover event, a somewhat subdued Elon Musk said that the company will face manufacturing challenges as Tesla's Model 3 ramps up to an expected 500,000 in yearly production next year.

"We're going to go through at least six months of production hell," he said.

Musk illustrated the challenge by using the familiar S-curve, a concept he's evoked many times before when talking about Tesla's manufacturing experience. The principle is straightforward: things start out hard and they get much easier, and when it comes to making cars, the volume follows.

In response to a question from Business Insider, Musk said that the anticipated Model 3 production hell will be less hellish than the hells the company endured with its previous three vehicles, the original Roadster, the Model S sedan, and the Model X SUV.

It was a moment of mild levity from a CEO who was clearly feeling the weight of considerable emotion about taking Tesla from near-bankruptcy in 2008 to the fulfillment of the company's dream of creating an affordable all-electric vehicle.

Three trips through hell

The Model 3 design is similar to the Model S, but building it will be simpler.Tesla

"With the Roadster, we went through production hell, and then we went back for a return journey," he said. 

The Roadster wasn't, however, a clean-sheet design; the basic chassis was provided by Lotus, and Tesla finished the vehicle and added the electric drivetrain and battery pack.

"The Model S was slightly less hell," he said, but he added that getting to a production rate of 20,000 per year entailed everyone at the company working day and night, an unsustainable process.

"It was nine months from starting to build the Model S to it not being incredibly painful," Musk said.

Tesla's most recent visit to production hell came with the Model X, launched in late 2015. Musk has repeatedly admitted that the SUV was over designed — "too many bells and whistles on that car," he said Friday — and that the carmaker could have avoided revisiting the same journey through hell it faced with the Model S. 

Ultimately, he said, the Model X's capital costs were three times those of the Model 3, despite numerous carryover parts.

Learning from hell

It will be a fresh, and hopefully less hellish hell.Tesla

Every effort has been made to learn from three trips to hell. The Model 3's production ramp should be less hellish. For example, the car will only be half aluminum, versus the nearly all aluminum Models S and X (the balance for the Model 3 will be steel).

There also won't be a dual-motor, all-wheel-drive Model 3 at first, just a single-motor, rear-wheel-drive vehicle. A larger and more expensive battery pack will go into the first production vehicles, with a less expensive pack coming later to the base model. The idea is to begin manufacturing a single-configuration car first, adding complexity as Tesla move up the S-curve, Musk indicated.

"We learned a significant amount of lessons with 3," he said, as the vehicle was designed to stress minimalism inside and out and be simple to build.

"There's nothing in that car that doesn’t need to be there," he added. "Everything has a compelling reason." 

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SEE ALSO: Tesla's Model 3 may have made one of the biggest design changes in automotive history

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'A new stage of the struggle begins': Venezuela's newly elected Congress is getting slammed by the opposition and foreign governments

• Brian Ellsworth, Reuters

• 4h
• 3,487

A woman in Madrid on Sunday at a protest held by Venezuelans against Venezuela's Constituent Assembly election. The placard says in Spanish: "No to the new Constituent." REUTERS/Sergio Perez

CARACAS, Venezuela — Venezuela's ruling Socialist Party has vowed that a newly elected legislative super-body will begin passing laws quickly after a vote that was boycotted by the opposition and slammed by foreign governments as an affront to democracy.

At least 10 people were killed in protests Sunday by opponents of unpopular leftist President Nicolas Maduro, who insists the new "constituent assembly" will bring peace after four months of protests that have killed more than 120 people.

The country's CNE elections authority said 8.1 million voters went to the polls on Sunday. The opposition estimated only 2.5 million ballots were cast.

Maduro's critics characterized the election as a naked power grab meant to keep him in office despite repudiation over an economic crisis that has spurred malnutrition and left citizens struggling to obtain basic products in the nation of about 30 million people.

The vote could exacerbate those economic woes if the US — the top market for Venezuelan oil — follows through on threats of economic sanctions, and it could sow doubts among investors about the legitimacy of financing deals backed by the new assembly.

"The constituent assembly will start its work right away," Diosdado Cabello, the deputy head of the Socialist Party, told a postelection rally in Caracas that featured singers and dancers and that culminated after midnight in the announcement of the official vote count and a fiery speech by Maduro.

"Good morning, Venezuela. We have a constituent assembly!" he shouted. "I ask our countrymen to close ranks so that the assembly can be a place of dialogue."

On Sunday, the US State Department vowed "strong swift actions against the architects of authoritarianism" that, according to US officials, will involve sanctions on the oil sector.

Allies of the Socialist Party won all 545 seats in the new assembly, which will have the power to rewrite the constitution, dissolve state institutions such as the opposition-run Congress, and sack dissident officials.

"The constitutional assembly will not resolve any of the country's problems — it just means more crisis," opposition leader Henrique Capriles told a news conference, calling for a new round of protests at noon on Monday.

"As of tomorrow, a new stage of the struggle begins," Capriles said.

Latin American nations from Argentina to Mexico, which are historically wary of siding with Washington in hemispheric disputes, sharply condemned the vote.

Several refused to recognize the results, while Spain and Canada joined in the condemnation.

Socialist Party official Cabello hinted that the constitutional assembly would hold sessions in the same legislative palace as the existing Congress, which the opposition took over in a landslide 2015 victory.

"They kick us out the door we come back through the window," he told a news conference. "We never surrender. We insist and insist until we win. Today we feel victorious."

The opposition organized an unofficial referendum over Maduro's plan in July, when more than 7 million voters overwhelmingly rejected his constituent assembly and voted in favor of early elections. 

(Additional reporting by Fabian Cambero, Diego Ore and Hugh Bronstein; Editing by Paul Tait)

Read the original article on Reuters. Copyright 2017. Follow Reuters on Twitter.

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Brits are more worried about the state of the economy than at any point since the Brexit vote

• Will Martin
 

• Jul. 28, 2017, 3:17 AM
• 449
 

Photo by Jack Taylor/Getty Images

LONDON — Brits are more worried about the state of their finances and their ability to spend than at any time since the immediate aftermath of the Brexit vote, a closely watched survey of consumer confidence has shown.

GfK's monthly consumer confidence monitor fell to a score of -12 in July, a number last seen in GfK's July 2016 data, making it the joint worst score since Britain voted to leave the European Union.

That represented a fall of two points from -10 in June, and was well below the long-run average of -9, which takes into account all data collected since 1974.

"Consumer confidence across the UK has fallen to the level last seen in the immediate aftermath of the Brexit vote," Joe Staton, GfK's head of market dynamics said in a statement.

"All bets must now be on a further drift downwards in confidence. Yes, employment is booming, but wages have fallen in real terms since 2008 once inflation is taken into account."

GfK's personal finance reading, a sub-measure that makes up the overall confidence figure, declined by one point to -2. The outlook for the general economic outlook category declined by six points to -31.

GfK's numbers come just two days after official data from the Office for National Statistics showed that the British economy grew by just 0.3% during the second quarter of 2017, just expanding from 0.2% growth at the beginning of the year.

Here's the chart:

GfK

"The economy has experienced a notable slowdown in the first half of this year," ONS Head of GDP Darren Morgan said in a statement released alongside the data.

"While services such as retail and film production & distribution showed some improvement in the second quarter, a weaker performance from construction and manufacturing pulled down overall growth.”

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