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Elon Musk Scrapped an 'Ironically Foolish' Idea to Save Tesla More Than 16 Hours of Production Tesla Model 3 battery pack production decreased from 17 hours to 17 minutes after this one key change, according to the company's Q1 earnings call.

By Hayden Field

Photo by Diego Donamaria/Getty Images for SXSW

Tesla hasn't met its 2018 New Year's resolutions. The electric car company is behind schedule on its Model 3 production, its Autopilot mode has come under fire after one user's fatal crash and the company lost close to $800 million in the first three months of the year.

Spending is also up: The company went through $745 million in Q1 of 2018, up from $112 million in the previous quarter. However, the company is doing a bit better than analysts expected -- reporting losses of $3.35 per share compared to the predicted $3.48.

Elon Musk, co-founder and CEO of Tesla, says he believes things are changing for the better.

Related: Tesla Owner Banned From Driving for 18 Months for Turning on Autopilot and Leaving the Driver's Seat

"The thing I'm most excited about is the rapid increase in output," he said on Wednesday's earnings call, mentioning that in the last 24 hours, the company has managed to keep a sustained production rate of more than 3,000 cars per week. However, the company's recent peak production hour indicated that the company might be on track to putting out 5,000 cars or more per week after a month or two of system operation refinement.

"By really engaging all of our associates, no matter how junior, in improving the way that parts are made, it's amazing how everybody has good ideas," Musk says. "[We] just need to solicit those ideas and implement them."

He does, however, admit a significant mistake: that Tesla went too far in the automation front and automated some "pretty silly things." One thing he calls "ironically foolish"? Automating the placement and bonding of fiberglass mats -- "basically fluff" -- to the tops of each car's battery pack. "We tried to automate the placement and bonding of fluff to the top of the battery pack, which is ridiculous," he says. "Machines are not good at picking up pieces of fluff. Hands are way better at doing that." The company eventually scrapped the complicated machine involved and directed energy elsewhere. Battery pack production time decreased from 17 hours a few weeks ago to under 17 minutes now, he says.

Regarding Tesla's autopilot technology, Musk says it's "unequivocally" safer than self-driving cars. He says that when a serious accident occurs, it's "almost always, in fact, maybe always" because an experienced user grows complacent with the technology and becomes "too used to it." He also said the company will be publishing safety statistics on a quarterly basis so people can gauge the safety level of the autopilot feature.

Related: I Ran My Day Like Elon Musk Runs His -- and This Is What Happened

As for the most significant production risk at this point? Musk says it's general assembly -- which he'll personally be focusing on a lot in the coming month -- followed by the paint shop. He feels confident, however, that the risks are manageable. "It's not like huge brain surgery to get these things right," he says. "It's a lot of work… but it's very doable."

When it comes to company spending, most of Q1's is related to the Model 3 rather than Model Y, which will likely begin production 24 months from now -- in early 2020 -- and could be, Musk says, a "manufacturing revolution."

Hayden Field

Entrepreneur Staff

Associate Editor

Hayden Field is an associate editor at Entrepreneur. She covers technology, business and science. Her work has also appeared in Fortune Magazine, Mashable, Refinery29 and others. 

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