Last month we highlighted a report from Automotive News which suggested that Tesla's Model 3 production misses might have been the result of a rather basic and embarrassing problem...the company hadn't yet figured out how to weld. As automotive manufacturing consultant Michael Tracy of Agile Group pointed out, the clues of Tesla's steel problems came from a video posted by Musk himself of the Model 3 assembly line. Referencing Musk's video, Tracy said a well functioning auto assembly line would not produce the sparks seen in the video below which are symptomatic of welds spots overheating or poor alignment of components.

After the Journal report, Musk tweeted a of the Model 3 production line, which was operating at one-tenth of its potential speed. In the video, sparks fly as two robotic arms assemble parts of the vehicle frame. He followed with another on Wednesday, Oct. 11, showing body panel stamping at full speed. "Resistance welding should make a little smoke, but when you see stuff popping out like that, that's called expulsion," automotive manufacturing consultant Michael Tracy of Agile Group in Howell, Mich., said of the first video. "It's symptomatic of weld spots getting too hot because they're poorly planned, or in this case, the metal not being pulled all the way together." Poor welds can increase the damage to a vehicle in an accident, and can lead to rattling and squeaking as the car ages, Tracy said.

A post shared by Elon Musk (@elonmusk) on Oct 8, 2017 at 3:20pm PDT

And while it's difficult to believe that Tesla hasn't been able to iron out simplistic assembly line issues like the proper alignment of welds, a new report from several current and former employees would seem to lend some credence to Tracy's hypothesis. As Reuters notes today, interviews with nine "current and former employees" revealed that 90% of all Model S and Model X vehicles that roll off the assembly line fail quality control checks...which compares to roughly 10% for Toyota.

After Tesla’s Model S sedans and Model X SUVs roll off the company’s Fremont, California assembly line, the electric vehicles usually make another stop - for repairs, nine current and former employees have told Reuters. 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 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, 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. At Tesla “so much goes into rework after the car is done ... that’s where their money is being spent,” a former Tesla supervisor said.

So what are the key issues being flagged in quality control checks? Oh, just minor issues like "doors not closing," "missing parts," and "water leaks..."

Defects included "doors not closing, material trim, missing parts, all kinds of stuff. Loose objects, water leaks, you name it," another former supervisor said. "We've been building a Model S since 2012. How do we still have water leaks?" Quality inspectors would sometimes find more defects than those reported by workers in the internal tracking system when a car came off the line. “We’d see two issues, that’s pretty good. But then we’d dig in and there would be like 15 or 20,” one person said. One persistently tricky area was alignment, where body parts had to be “muscled,” in the words of the senior manager, to a certain degree of flushness. Not every team follows the same rule book, workers said, resulting in gaps of different size.

Of course, a lack of production efficiency was already crushing Tesla's cash flow so you can only imagine what will happen now that Musk has shifted the company's strategy to focus not on $100,000 super cars but rather $35,000 entry-level vehicles...needless to say, margins on $35,000 vehicles can't support a 90% QC failure rate.

Perhaps this is why it recently took Tesla Model S owner Tyler Martin a full 25 minutes to detail all the defects in his brand new vehicle (see: Angry Tesla Owner Shares 25 Minute Video Detailing Just One Year Of Model S Service Issues)...