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Abstract

The case discusses the automation strategy of Tesla, Inc (Tesla), the world's largest Electric Vehicle (EV) maker. Tesla vigorously pursued automation solutions to develop high-performance environment-friendly cars that were not only sustainable, but also superior to fossil-fuel alternatives, delivering massive savings in energy costs, performance, efficiency, and reliability. In 2017, Elon Musk (Musk), CEO of Tesla, focused on hyper-automation, including a robotic assembly line, to increase manufacturing speed and drive down costs. Tesla's Fremont manufacturing facility in California was heavily automated with hundreds of industrial robots being used for manufacturing, replacing many of the human workers employed there. However, the production ramp-up came with huge setbacks including massive cash burn, missed production targets, financial losses, and high employee turnover. Automation processes actually slowed down production as Tesla. Eventually, Musk admitted that his company had gone way overboard with automation and, ultimately, had to turn back to human assembly line workers to achieve the production targets of Model 3. Despite the setbacks, Musk stated in 2019 that automation would be key to the company's future. Going forward, the biggest challenge for Musk would be how to reach an optimal level of automation in order to achieve efficiency in production processes and drive down costs.

Teaching and learning

This item is suitable for postgraduate courses.

Time period

The events covered by this case took place in 2016-2020.

Geographical setting

Region:
World/global
Countries:
United States; Germany; China

Featured company

Tesla, Inc
Employees:
10000+
Turnover:
USD 24.6 billion (2019)
Type:
Public company
Industry:
Electric vehicles

Featured protagonist

  • Elon Musk (male), CEO

About

Abstract

The case discusses the automation strategy of Tesla, Inc (Tesla), the world's largest Electric Vehicle (EV) maker. Tesla vigorously pursued automation solutions to develop high-performance environment-friendly cars that were not only sustainable, but also superior to fossil-fuel alternatives, delivering massive savings in energy costs, performance, efficiency, and reliability. In 2017, Elon Musk (Musk), CEO of Tesla, focused on hyper-automation, including a robotic assembly line, to increase manufacturing speed and drive down costs. Tesla's Fremont manufacturing facility in California was heavily automated with hundreds of industrial robots being used for manufacturing, replacing many of the human workers employed there. However, the production ramp-up came with huge setbacks including massive cash burn, missed production targets, financial losses, and high employee turnover. Automation processes actually slowed down production as Tesla. Eventually, Musk admitted that his company had gone way overboard with automation and, ultimately, had to turn back to human assembly line workers to achieve the production targets of Model 3. Despite the setbacks, Musk stated in 2019 that automation would be key to the company's future. Going forward, the biggest challenge for Musk would be how to reach an optimal level of automation in order to achieve efficiency in production processes and drive down costs.

Teaching and learning

This item is suitable for postgraduate courses.

Settings

Time period

The events covered by this case took place in 2016-2020.

Geographical setting

Region:
World/global
Countries:
United States; Germany; China

Featured company

Tesla, Inc
Employees:
10000+
Turnover:
USD 24.6 billion (2019)
Type:
Public company
Industry:
Electric vehicles

Featured protagonist

  • Elon Musk (male), CEO

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