Tesla turns to local machine shops to fix parts before they're installed on new cars

April 17, 2018

Struggling to meet production goals, Tesla is reportedly outsourcing repair of parts—brand new parts, that is—before they are installed on its electric cars.

Just 30 minutes from Tesla’s main factory, a machine shop in San Jose, California, has racks stacked with Tesla parts waiting to be re-machined.

MORE: Read our 2018 Tesla Model 3 review

The parts waiting at JL Precision, the machine shop, include door frames, doublers, torque boxes, nodes and shock mounts, CNBC found. There were also racks of castings used to make tooling for Tesla’s own factories. They're destined for all three of Tesla's electric cars, the Model 3, the Model S, and the Model X.

In January, Tesla projected that it would produce 2,500 Model S sedans per week by the end of the first quarter of 2018. In a production and deliveries report published earlier this month, the automaker stated that it had missed its target.

Industry observers are watching the second quarter of this year closely to see if the company can fulfill its goal of 5,000 vehicles per week.

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Current and former employees at Tesla's Fremont, California, and Sparks, Nevada, factories blame the company's unmet production targets for failing to perform comprehensive statistical variance testing—used by carmakers to estimate the percentage of parts that will fail to meet specifications when delivered by a supplier.

Employees attributed outsourcing of rework to the company's production cycles, CNBC reported. Tesla typically ramps up production at the end of each quarter in an effort to make its goal with all production employees working overtime. Just prior to and after these pushes, more work is outsourced to local shops, they said.

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