Musk: Tesla's factory will become an 'alien dreadnought'

Tesla has always insisted that it doesn't have any demand problems. Rather, it has production problems.

And evidently, those production problems became severe this year. After the car maker released second-quarter earnings on Wednesday, CEO Elon Musk took analysts questions and revealed how many issues Tesla had with first-half 2016 manufacturing:

"We were in production hell," he said. "We climbed out of hell in June."

He added that he's "not losing sleep at night because of production issues" anymore, but that he has "a whole lot of mental scar tissue from earlier this year."

He included some insight into the changes that will necessary at Tesla's California factory to achieve mass-production of the forthcoming Model 3, which will sell for $35,000 and hit the road in 2017.

Musk said that the in-house term they have for the manufacturing advancement he hopes to introduce is "alien dreadnought."

"The point at which that's what the factory looks like, that's when you know you've won."

Musk then outlined, using software terminology, the evolution of the factory, from version o.5 to version 3.0

"By version 3, it won't look like anything else," he said. "You can't have people in the production line itself, otherwise you drop to people speed. So there will be no people in production process itself. People will maintain the machines, upgrade them, and deal with anomalies."

This idea has been talked about in the auto industry and the wider world of manufacturing for some time. But Musk seems to be aiming for full automation of the Model 3 build process.