Tesla gears up for Model S; plant announcement due soon
Tesla CEO Elon Musk: “Manufacturing is something that needs to be a core strength of Tesla's.”
He also said that Tesla is hiring 50 to 60 people a month, focusing on vehicle engineering and production specialists, and that it has chosen companies or has two finalists to supply 80 percent of the parts for the planned $49,900 Model S sedan, due to be launched in 2012.
Tesla's first mass production plant will be on the West Coast and will build both the Model S and the next-generation Roadster sports car. Tesla will convert a factory, but Musk declined to say whether the plant previously had been used by the automotive industry.
“It hasn't yet been finalized,” he said. “We've almost fully negotiated the deal, but it has not been signed yet.”
Tesla has “a fairly significant team” put together for manufacturing, Musk said. He said Tesla has recruited people who have worked with BMW AG, Land Rover and Toyota Motor Corp.
“We're really trying to put together a world-class manufacturing team,” Musk said. “We're trying to create a Spartan army of expertise.”
In February, Tesla named Gilbert Passin, who was a general manager of production engineering at Toyota's recently closed plant in Fremont, Calif., to head manufacturing. Passin also previously worked at Toyota's plant in Cambridge, Ontario, the only factory outside Japan to build a Lexus vehicle.
The West Coast plant will include stamping, paint shop, body and chassis, and doors. A powertrain factory will supply both Tesla and other automakers, Musk said.
Currently, England's Lotus provides “gliders” -- partly assembled vehicles -- to Tesla for its $109,000 Roadster, its only vehicle currently. Tesla then adds the electric powertrain. But the company plans to take greater control of manufacturing.
Musk said many people think they can outsource production, a sentiment he categorized as “wishful thinking.”
“I think manufacturing is something that needs to be a core strength of Tesla's,” he said. “And as we apply innovation to the car business, we're going to need to apply it to the manufacturing process as well.”
Musk said Tesla prefers to deal with local suppliers where possible because the automaker wants to innovate with them. He said the company has turned down the lower bid from one supplier in favor of a higher bid from a supplier that the automaker thought it could partner with.
For 80 percent of the parts for the planned $49,900 Model S sedan, Tesla either has chosen a supplier or has two possible suppliers, he said.
The transmission may be outsourced, Musk said. The current Roadster uses BorgWarner Inc.'s eGear transmission.
The lithium ion fuel cells will be made by Japan's Panasonic Corp.
Musk said Tesla will outsource certain portions of production of the Model S interior and exterior, including wiring harnesses, skeletal mechanisms for the seats, and glass for the windows. Tesla will integrate the interior components and door assemblies, Musk said.
Tesla has no firm policy guiding whether to outsource production of a part or do it in-house, he said.
“It's not hard-core one way or the other,” Musk said. “It's what deal can be done and whether we can do it internally.”