Asa Mathat D: All Things Digital
In an interview with Y Combinator's Sam Altman, Musk said the most striking realization came to him while he was overseeing the engineering of Tesla cars in the company's Fremont, California factory.
"The biggest epiphany I've had this year is that what really matters is the machine that builds the machine, the factory," he said. "And that this is at least two orders of magnitude harder than the vehicle itself."
Tesla uses 580 giant robot arms to assemble the Tesla Model S and Model X cars. But Musk is focused on automating even more of the manufacturing process as he looks to ramp up production.
Earlier this year, he said that Tesla was "hell-bent on becoming the best manufacturer on Earth." Considering Tesla has had its share of production problems in the past, this shift in strategy was no doubt welcomed by those looking to buy a Tesla vehicle.
However, there's now concern that Tesla's one factory won't be able to handle the automaker's consumer friendly Model 3, which is slated to roll out at the end of 2017 or early 2018, on top of assembling the Model S and Model X.
My colleague Matt DeBord has gotten into the weeds about this, pointing out that the Fremont plant has the capacity to assemble 500,000 vehicles annually, with the factory only producing a fraction of that. Tesla's 2016 goal is to ramp up production to 100,000 cars.
But keep in mind that there are roughly 400,000 pre-orders for the Model 3 at this point, which you're adding on top of Model S and Model X production. That's a pretty tall order for Tesla's one factory.
Musk knows he needs to be faster.
"Actually our speed on the line is incredibly slow," he said in the interview with Altman. "I think we are ... in terms of the extra velocity of vehicles on the line, it's probably about, including both X and S, it's maybe five centimeters per second. This is very slow."
Musk added that he's "confident" Tesla can get a 20-fold increase of that speed, but we'll have to wait to see how Model 3 production goes.