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Here’s The Real Reason Tesla Makes No Money

lon Musk bills Tesla as the pinnacle of “lean” manufacturing.  Just search for pictures of Tesla’s manufacturing plant and you’ll undoubtedly be served up futuristic looking images, like the one below, depicting 100’s of red robots building vehicles without a single employee in sight.

But, if Tesla is truly the lean manufacturing powerhouse that it purports itself to be then we do wonder why it continues to burn through ~$600 million of cash every single quarter, or roughly $30,000 for every car that it sells?

Perhaps this ‘anomaly’ has something to do with the fact that, as Automotive News points out, Tesla’s real ‘capacity problem’ has nothing to do with the size of their manufacturing facility but rather the staggering number of people they’re using to build their cars.

The 5.3 million square feet of manufacturing space that Tesla now occupies started off as a joint operation between General Motors and Toyota which began in 1984 and was intended to help the Japanese automaker learn about doing business in America and teach GM the principles of lean manufacturing.  20 years ago the plant pumped out over 350,000 new cars each year or roughly 74 vehicles per worker

 

 

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