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Elon Musk Admits Mistakes Caused Tesla’s Model 3 Production Delays

By
Jen Wieczner
Jen Wieczner
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By
Jen Wieczner
Jen Wieczner
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June 5, 2018, 10:39 PM ET

Tesla (TSLA) CEO Elon Musk is known for setting ambitious goals and timelines for the electric car company, but he isn’t known for hitting them. Tesla Model 3 production, after all, came in 84% below Musk’s predictions in the mid-size sedan’s first quarter on the market last year—and the company has yet to release its promised $35,000, mass-market version of the car.

So it wasn’t entirely surprising that shareholders at Tesla’s annual meeting Tuesday thought it was about time Musk qualified the reliability of his own timeline estimates, or “Elon time,” as one investor put it. Indeed, Fortune counted at least 30 instances in which Musk predicted the timing of various Tesla products during the meeting.

Here is a sampling of when Musk expects Tesla to hit certain milestones: the $35,000 Model 3 (end of 2018); free trials of autopilot (July 2018); Model 3 test drives (end of June 2018); a Tesla compact car (by mid-2023); Model 3 leasing (end of 2018 or early 2019); Model 3 all-wheel drive (by September 2018); Model Y (March 2019 for unveiling); positive Tesla net income and cash flow (third quarter 2018); and 5,000-per-week Model 3 production (end of June 2018).

Then again, Musk, who was wearing a motorcycle jacket atop a t-shirt depicting a butter-passing robot from the cartoon Rick and Morty, advised taking his own predictions with a grain of salt.

“I’d probably put some sandbag on future dates, that’s probably wise,” Musk said. “I kind of say when I think it can occur, but then I’m typically optimistic about these things.”

The billionaire entrepreneur was responding to a question from shareholder Galileo Russell, a YouTube channel host who gained notoriety last month when Musk took his questions during Tesla’s quarterly earnings call, after refusing to answer what the CEO called “boring bonehead questions” from Wall Street.

“I hate to say this, but I feel like my trust in Tesla’s timelines sort of eroded a little bit with the Model 3 ramp. So should I keep discounting things on Elon time or have you learned anything about this?” Russell asked during Tuesday’s shareholder meeting.

“I think I do have an issue with time,” Musk confessed, to loud applause. “I have a condition, I don’t know.”

The CEO noted that when he and his brother Kimbal Musk, a Tesla board member also present at the meeting, used to take the bus to school, Kimbal “would lie to me about the time,” and say the bus was always “earlier than it actually was.” Elon Musk explained, “Then I’d get there slightly after that, and then we’d actually be able to catch the bus.”

“This is something I’ve been trying to get better at,” Musk added. “So I’m trying to recalibrate these estimates, yeah. I’m trying to recalibrate as much as possible.”

As for why Model 3 production is running behind schedule—regardless of how realistic the initial timeline was—Musk also admitted mistakes contributing to the delays, as he has done at prior Tesla shareholder meetings. Chief among the errors: Too much automation of Model 3 factory production.

“One of the biggest mistakes we made was trying to automate things that are super easy for a person to do, but really hard for a robot to do,” Musk said. “And when you see it it looks super dumb, like wow, why did we do that.” Now, Musk explained, Tesla is focusing on automating only assembly-line tasks that are “most difficult for people to do,” and those most likely to result in worker injuries.

Still, Musk was adamant that while questions remain as to when Tesla will hit its targets, it’s not a question of if. “It pretty much always happens, but not exactly on the time frame,” Musk said.

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