DETROIT — The manufacturing analysts who spent 6,600 hours inside a warehouse north of Detroit picking apart a Model 3 have good news and bad news for Tesla Inc. The company now boasts the best technology of any electric car, with potential profit margins that would be the envy of most automakers. But Tesla is squandering that edge with wasted expenses linked to poor design and bloated manufacturing.
Sandy Munro, the founder of Munro & Associates, a small company that disassembles new cars piece by piece, concluded that the Model 3 costs about $2,000 more than a similarly priced BMW i3 and may have more cost problems in its assembly plant. Some compact cars and family sedans produced by conventional automakers don't make $2,000 in total profit per vehicle.
Many of the problems stem from unconventional choices made by Tesla CEO Elon Musk. "If that car was made anywhere else, and Elon wasn't part of the manufacturing process, they would make a lot of money," Munro said in an interview. "They're just learning all the old mistakes everyone else made years ago." Munro said he admires Tesla's technology, so he sent the company a pro bono list of 227 suggested improvements.
Take the steel and aluminum frame at the bottom of the car, a design meant to increase safety. Tesla's battery already sits in the floor and adds stiffness, Munro said, so Tesla made the car heavier and more expensive without getting much benefit.
The aluminum trunk well, meanwhile, is made from multiple pieces held together with rivets and weld points instead of one lighter, cheaper fiberglass trunk preferred by other carmakers. The rear wheel well on the Model 3 also features nine pieces of metal riveted, sealed or welded together. The Chevy Bolt? It has one stamped piece of steel.
"This body is their single biggest problem," Munro said. "It's killing them."
Tesla declined comment, although the company did cite a statement from April saying that Model 3 line has gotten better since Munro's cars were built. "We have significantly refined our production processes since then, and while there's always room for improvement, our data already shows that Model 3 quality is rapidly getting better."