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Three months ago Tesla CEO Elon Musk tweeted that production of the new Model 3 in “Aug[ust] should be 100 cars and Sept[ember] above 1500.” But over the following quarter Tesla ended up delivering only 220 of its new more-affordable electric cars, or just 15% of Musk’s guidance. Though Tesla’s delivery press release didn’t identify the cause for this dramatic miss, it did state that

“It is important to emphasize that there are no fundamental issues with the Model 3 production or supply chain. We understand what needs to be fixed and we are confident of addressing the manufacturing bottleneck issues in the near-term.”

What does and does not constitute a “fundamental issue” with the Model 3 production ramp is open to debate, but a source tells Daily Kanban that elements of the Model 3 body line are still in development at the Michigan-based supplier Thai Summit America and not yet installed at Tesla’s Fremont facility.

According to this source familiar with Thai Summit America’s business with Tesla, the supplier has been developing a pilot body panel line for Tesla. This highly-automated body line will reportedly operate for 18-24 months, and then be shipped to Tesla’s Fremont, CA production plant if all goes well. According to the same source, Five Lakes Automation, an assembly automation firm specializing in body stamping and welding lines, is also collaborating on the pilot line.

LinkedIn profiles of two Thai Summit America employees confirm that work is indeed being done on “Model 3 assembly cells” by the supplier’s “line builders,” and one employee profile estimates that work on the project began in January of 2017. When contacted by Daily Kanban, these engineers would only confirm that they were indeed working on a secretive project for Tesla. Neither Tesla, Thai Summit America nor Five Lakes Automation responded to Daily Kanban’s request for comment.

More information about the role of Thai Summit in the Model 3 body shop ramp comes from a Daily Kanban-commissioned translation of a Thai-language news story. The story notes:

“Thai Summit has offered sale price of body parts and metal/steel parts manufactured in Thai Summit America’s factory two months ago with the value of $150 million USD to deliver by the end of 2017, as key components in the Tesla production sold in early 2018. This body part manufactory was a former Ogihara Corporation, the biggest company manufacturing tools for automobiles in Michigan four years ago, taken over by Thai Summit. Ogihara Corp. was entrusted by Tesla Motors (United States) for designing, manufacturing, distributing electric cars, and components of transmission system for electric vehicles.”

This story, which repeatedly states that Tesla’s targeted 2018 Model 3 production volume is 300,000 units suggests that body panels produced at Thai Summit’s America’s Michigan factory will be delivered to Tesla by the end of 2017. This implies that Thai Summit will supply body panels to Tesla until testing of the pilot line is complete, likely some time in 2018. At that point, the body line is likely to be shipped to California and installed at the Fremont plant, per Daily Kanban’s source.

In the meantime, it seems likely that Tesla is hand-building Model 3 using prototype tooling. Dave Sullivan, an analyst at AutoPacific, tells Daily Kanban that the typical rate of production for hand-built vehicles is about 5-8 per day, or between 150 and 250 units per month. The fact that Tesla produced just 220 vehicles over the last three months suggests that Tesla is producing vehicles at or below this rate. Photos that leaked out of Tesla’s “Area 51 Pilot Team” back in February appear to show a pilot production area with little to no automation.

In Tesla’s Q2 2016 earnings call, Musk stated that the Model 3 production system would be updated after the vehicle was launched:

“The Model 3 – the internal name for designing the machine makes the machine is the – we call it the alien dreadnought. At the point at which the factory looks like an alien dreadnought, then you know you’ve won. It’s like, what the hell is that? So we’ve got alien dreadnought version 0.5 will be Model 3. It will take us another year get to version 1 and probably a major version every two years thereafter. By version 3, it won’t look like anything else.”

Presumably the body line in development by Thai Summit is one of these later versions of the Model 3 production system, although it’s not clear what version of the system Tesla considers this particular line. Regardless, changing over production systems is a complex logistical task that can interrupt production for long periods of time. One of the fastest changeovers in recent years, when Ford retooled and refurbished its Dearborn truck plant in 2014 (an awesome timelapse video of that project can be found here), took 8 weeks to complete but involved months of preparatory work. Each time a new production system is installed, the plant has to re-train workers, refine processes, and sync up with logistics. Ford’s 8-week turnaround was literally planned to the minute, because it had to be.

In the absence of real information from Tesla, it’s all but impossible to know for sure if the automaker is in the earliest stages of bringing a “real” production system online, or if it will simply hand-build Model 3 using prototyping tooling until this pilot line is complete and installed in Fremont. Given the massive Q3 miss, the evidence that a new body line for Model 3 is still in development and Tesla’s utter commitment to secrecy, it’s not easy to believe that 5,000 units per week will happen this year or that 10,000 units per week will happen next year. Especially since Thai Summit repeatedly says it will supply on 300,000 units worth of body panels for 2018 production. But at the end of the day, we’re still just trying to get a glimpse behind the curtain… and Tesla is still doing everything to stop the public from really understanding what is going on.

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