Can Elon Musk Get SolarCity’s Gigafactory Back On Track?

Elon Musk clearly has a blind spot about manufacturing. Building a giant factory for the first use of a new process does not work, and theoretically it cannot work. Even if it did work, it would be non-competitive. Once a factory is built and machines installed, subsequent new discoveries/knowledge cannot be incorporated, except at the margins.

To reach the 100-megawatt goal, sources indicate that the pilot production line in Fremont would eventually need to yield between 800 to 1,000 high-efficiency Whitney panels per day. But the team was not able to automate the process consistently enough to produce more than dozens of Whitney panels per day, according to people familiar with the matter. Most of the production resulted in “scrap,” they say. “The big problem was simply that they couldn’t scale up the technology to the point where you could run it in a factory,” a source familiar with the development explains.

Source: Can Elon Musk Get SolarCity’s Gigafactory Back On Track?

According to this article, he is doing it not only with his battery project, but for solar panels. “The Gigafactory 2, as it is now called, is a 1.2-million-square-foot facility” that has absorbed $1,000,000,000 of investment so far. They targeted one gigawatt of production capacity by 2016! The schedule was later postponed to begin operations in early 2016, with full capacity by 1Q 2017. This fast a “ramp up” is impossible for an immature and new manufacturing possible.

The third case, of course, is his auto manufacturing. Assembling cars is very different than solar panels or batteries (which are closer to continuous processes), but there as well he is apparently running into difficulty increasing output as fast as he projected. None of these problems are surprising in any way – why do they keep getting surprised.

If I were consulting for them, I would teach them about how to ramp-up effectively. I’d also have them leave 3/4 of the Gigafactory empty for the first year. If they are highly leveraged, that might lead to a financial meltdown, but effectively it is going to happen anyway.

As a related story by the same author says,

It’s easy to want to believe in the future Musk imagines. And the new Solar Roofs—combined with Powerwalls and Tesla cars—may truly be a key development in helping wean us off fossil fuels. But it’s just as easy, given how that future seems to grow more fantastical and distant with each word he utters, to become cynical. Musk understands this. As he frames it on the earnings call, there will always be “a group that says [this future] is obvious, and a group that says it’s impossible.”

Other articles in this series: