Tesla's new assembly line in a tent is unprecedented - but it doesn't necessarily spell doom for the company
- In an effort to meet production goals for its Model 3 sedan, Tesla has built a new assembly line outside of its factory in Fremont, California.
- The new line is housed in an open-air structure that CEO Elon Musk referred to as "a giant tent" on Twitter.
- Building a vehicle assembly line outside of a traditional factory is unprecedented in the auto industry, though the move has both positive and negative implications for Tesla, analysts told Business Insider.
In an effort to meet production goals for its Model 3 sedan, Tesla has built a new assembly line outside of its factory in Fremont, California.
The new line is housed in an open-air structure that CEO Elon Musk referred to as "a giant tent" on Twitter, where he said the assembly line was built in three weeks with "minimal resources." Musk also said he preferred the open-air structure to the nearby factory building.
"It's actually way better than the factory building. More comfortable & a great view of the mountains," he said.
The new assembly line comes as Tesla seeks to hit its goal of making 5,000 Model 3s per week by the end of the month. The company has repeatedly missed production goals for the vehicle since its launch in July.
Building a vehicle assembly line outside of a traditional factory is unprecedented in the auto industry, Gartner research director Mike Ramsey told Business Insider.
"It's extremely unusual, at a minimum. I've never heard of anyone ever doing this before on a grand scale," he said.
But the company's use of an unconventional structure to increase production capacity isn't necessarily a bad omen for Tesla. The company's decision to build the new assembly line in a novel fashion has both positive and negative implications, according to Edmunds senior analyst Jeremy Acevedo.
"On one end, it's not all that confidence-inspiring building luxury electric vehicles in a semi-permanent structure," he said. But, "it does demonstrate Tesla's commitment to meeting their production goals and to hitting the threshold that they've promised."
Ramsey, Acevedo, and Kelley Blue Book senior analyst Akshay Anand said that, despite its unusual nature, the new assembly line doesn't raise serious concerns about worker safety or vehicle quality.
On Monday, the journalist Edward Niedermeyer posted photos of what appeared to be permits giving Tesla "temporary approval" for the tent and the equipment inside it for up to six months, which indicates that an independent body has at least reviewed Tesla's plans for the assembly line.
If anything, the new assembly line could raise concerns about the company's priorities. While its ability to increase the rate of Model 3 production is an important metric for shareholders and financial analysts, Tesla shouldn't prioritize quantity over quality, Anand said.
"I would rather see [Musk] produce 4,500 a week and have there be absolutely no issues with the car than produce 5,000 a week and have there be issues with the car."
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