Tesla took next step in the history of manufacturing & invented the “production cells” 

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I Submitted Elon Musk to the Guinness Book of World Records for "Man Who Paid Most Taxes in the World" who agrees #ELONMUSK should get the Cover?

"in nine years, we will start changing our company to be Agile" is the automotive equivalent of "tomorrow I will start to diet" Toyota proves it is the antithesis of agility.

It is amusing to me how Elon is constantly telling his competitors what they have to do to compete …. Electric cars are the future …. You need to build battery factories … you need to secure raw materials …. Tesla’s advantage is manufacturing …. No one listens until it is too late.

I've said it before and I'll say it again here. Even if someone were to tear down a brand new Tesla and without any regard to patent law, duplicate it, by the time they got the first one off the assembly line, all they would have is a five year old Tesla. Nobody is going to catch Tesla that way.

So it's just source control, like git, but in car production instead of programing. It really shows how much programing concepts and solutions are important outside of just programing to improve our world.

Interesting. Tesla builds cars the way software is developed. Wonder were he got that idea ....

Working on my resume to apply at Tesla while listening to you talk about working for Tesla. Wish me luck.

Only works when you have motivated, committed people...not union clock watchers.

Excellent explanations! Great to hear so many of the positives about this company instead of the deliberate dissing establishment autos and news reports make against Tesla and Musk.

The innovation is in how they build the factories. Each more efficient than the last, each taking advantage of what was learnt before. The machines that build the machines is the real product. The cars are the ultimate manifestation of that philosophy.

Wondering any “environmentalists” protest the VW new factory? 🤣

Tesla's speed of innovation is awesome to behold.. I do however have an cautionary observation regarding longer term projections of the total number innovations (changes) might make, if based on the current weekly rate of changes to Tesla's car production cells, I believe the rate per week will inevitably be subject to the dynamics of an "s" curve. Similar to Tesla's production ramp up. A slow rate at first, then faster, then much faster and eventually slowing down when certain limits are approached. For Tesla's production numbers theoretically these will be market saturation and possibly long term materials availability. For innovation and hence "production cell" changes these limits will encroach as the "perfect production method" is neared. Innovative changes will have smaller and smaller positive effects until they are no longer viable to implement, hence smaller numbers of changes as time goes by. Just a thought from a fellow Dane!

The old OEM's should create internal kernel companies that mimic Tesla. Let these kernals take whatever it needs to grow. They will destroy the old company in favor of the new company. The process would act like a cancer.

Any bets that the new VW plant won't face the objections and obstacles faced by the Tesla plant?

Excellent coverage of an under appreciated truth. Thank you for an enjoyable year of informing videos. Merry Christmas!

Re: Factory Mode - yeah, more like OO - "Car - Build Thyself." :D

Merry Christmas from Hawaii Lars. Great job on all your work, really enjoyed the Joe Justice interview. Aloha

VW to build new plant to copy Tesla , not counter ... So then can build Tesla knockoffs faster !

Thanks Lars, exceptional staff, very complex yet so basically explained that you can be understood by anyone. Let me see if I can scrape more money to buy a few more shares. I cannot see another outfit in the entire world better positioned to become a a juggernaut in many high tech fields. Could I be wrong? Yes, but the chances for success are definitely heavily on my side. It is the genius of Elon Musk and its dream team of devoted innovators that will always make the difference. Those are the reasons for the miracles happening at Tesla day after day.

Tesla will ALWAYS have an advantage over traditional OEM because they have ELON. There's only one Elon!

Fantastic video, it is incredibly difficult for "normal" people to wrap their head around what Tesla does. Even as a technology person what Tesla does continues to blow my mind.......all the time!

The real secret is "Culture", a management that innovates from all directions. A grand plan from above with small, rapid incremental development on the shop floor. This is a rare thing and I have only once been a part of a Factory with real shop floor constant innovation. It was a joy, until 3 yanks bought the business and shut it down!

Thats was the problem with the Fremont factory since it was old, therefore poor build quality~!

Your best video yet. As a Software Engineer I can tell you what Elon did with Tesla production. He took software development strategies to car production. In software development you branch of a master branch (the branch that gets shipped to customers) Engineers create a branch of master and implement a bug fix or a feature. Then quality assurance tests the branch. If approved the branch gets merged back into master and then it gets shipped with the next release. That’s exactly what Tesla did with production cells. Ingenious!!!

So what exaxtly is the difference between a production line and a "production cell"? Is the whole car produced within one "cell"?

Your interview with Joe Justice blew my mind. I've been following Tesla with interest for years, but did not realize how different Tesla's approach to manufacturing really is until I saw the interview. I want to point out that Tesla's plant software and sensors, which check every car for defects (not just samples pulled from the line), is something VW will not be able to duplicate. VW is not a software company, and there isn't a software supplier who has an off-the-shelf solution for this anywhere in the world. All of the other automakers, both legacy and start-ups, are stuck with the old tried-and-true production line concepts. Without software support for cell manufacturing, if they tried to do what Tesla does, they would immediately lose all visibility and control over configuration management, and quality would fall into a pit. About budgets: Tesla does budget expenses. What they do *not* do is micromanage their budgets. They plan for expenditures to operate a factory, but they don't, for example, budget for a particular configuration change. In executing budgets, they maintain a very high degree of flexibility. A VW budget for a factory probably runs thousands of pages; I suspect a Tesla budget for a factory could be folded and stuffed into a shirt pocket.

27 changes a week happened during the model 3 ramp. It is NOT an average week today. Yes changes still happen on the fly but it is nowhere near as fast as it used to have to be when they were in production hell. There is still refinement to be made to take full advantage of the castings/Structural battery but by in large the rest of the vehicles are now cut and paste technology.

Henry Ford did not invent the assembly line. It was first invented by R.E. Oldsmobile of the Oldsmobile auto company. Ford took the idea and applied it to his car manufacturing plants.

Lars, you are second to none. Overall, the best Tesla videos and commentary of all!

I will show this video to friends who ask why Tesla is better at making stuff. (E.g., who knew just making a budget slows down most firms a year?).

Merry Chistmas to you and yours, my friend! Thanks for your videos, I look forward to them.

Great video Lars. Tesla is awesome

Very interesting information about TESLA's unique manufacturing processes. Many thanks!

This difference in innovation pace will definitely diverge Tesla from the other OEMs even more in the coming years. Only more people and companies will want Tesla because of its technological superiority. When it comes to fleets of robotaxis that are shared with the masses, Tesla will be the preferred brand and therefore the most dominant player.

I'd have loved that work environment a few years ago. There's always a better way! Always! I worked a Wincanton transport a few years ago and when the barely manager responded to a tiny change I made with "that's how it's always been done and that's how it always will be done" I had to opt out. Square peg, round hole. I've had to become self employed, I'm the only person to put up with me, with one exception.

Ford has $145B in debt. GM has $110B in debt.

5 years Tesla making cars on moon that are programmed to fly to new owners driveway on earth

You nailed it Lars. Again.

And Tesla does not just make cars! Great video.

Tesla moves at the speed of thought the other car companies move at the speed of Congress

I found very much informative you using the definition of "oil dependent" vehicles, as I think that the evident technology of "EVs" will be expanded as a standard in the future, it will not be a "differential"... Although Tesla Technology tends to be the biggest provider of mass produced equipment embarked with the cutting edge software

Happy Holidays to you and your family, Lars! Thanks for all the great videos the last couple of years - they keep getting better and better each week, with so much great information - especially about the EV scene that is happening in Europe - looking forward to all the great videos you'll be making in 2022 and beyond - thanks again!

There is a thought in my mind for a long time now: even if a legacy car manufacturer had an insider in Tesla factory, they would be worhtless. No idea they could steal would make a sense for the legacy manufacturer. Like an analog firm stealing the chip plans from a digital firm. Nice to see, but no way of using it.

Legacy manufacturers remind me of the 300LB person who orders a Pizza with everything on it including extra cheese...and a Diet Coke.

The BEST updates come from BestinTESLA... END OF!!!!!!

As always, Lars, great content! You're recording history in the making! Let's make sure Elon's forward momentum is not disrupted by an evil gremlin from Kremlin whose oil revenues are on the verge of solar disruption and whose ballistic missile capabilities are about to be rendered impotent by Starship onorbit platform

Toyota has always used Dr. Deming's manufacturing methods. USA used his manufacturing methods in WW2 aircraft industry but unions didn't want such fast moving innovation afterward, so Dr. Deming took his programs to Japan. Japan adopted the Deming Method for manufacturing and ate our lunch as regards auto manufacturing. Tesla uses the Deming Method (Plan, Do, Check, Act; then repeat) except more so. Tesla is the Deming Method on 21st Century steroids.

Lol I wish you could pump out more videos without taking from your quality haha not enough Lars 😅 always a pleasure 😇

Yes to catch Tesla you have to be like Tesla. Currently they can't really do that. Tesla has rebuilt the machine that builds the machine. It's this agile production that let them survive the chip shortage along with the other supply problems.

Love these videos on how Tesla actually works from within. Their management philosophy/style is radicle. Thanks to you and SMR for posting these interviews with Joe Justice. Worth several watches to grasp fully what he's telling us.

Legacy auto has to come to grips with the fact. The only way to survive is to find a new product...not cars. The EV ship has sailed. They missed the boat.

The key to rapid change hinges on the automated testing from what I've heard. It's clever. basically the router cell is a spawned test environment. If it does not help, it dies. If it succeeds, the dna of the test cell is adopted on a wider scale. It's natural selection. Your point is well taken on how exciting it may be for the average worker on the line seeing a change adopted frequently. It's like "oh I'm so glad someone sorted that out, what a great idea" or "hmm, I wonder if that will really work long term". On a daily basis!

Elon could manage the US Govt better too...by getting rid of the budget.? President Musk could get the US running at full speed and lowest waste and highest use of modernity.

Do you know what outside supplied part has the longest procurement lead-time?

These "production cells" rather than a line sound kinda like OO for hw manufacturing...

Legacy auto preparing to beat Tesla today in 5 years when Tesla can't predict what they will be building in 5 years , It's impossible to achive with the tools they have unless they build a time machine or liqudate all their assets and buy Tesla stock , they wont be anywhere in 5 years.

FYI, Dr Deming taught the Japanese the Lean Design methods post WW2. Sandy Munro carries that legacy to this day and that's probably why Sandy and Elon appreciate each other.

It is the same as software dev. We use git for branches of software to test changes and after successfully tested the changes, it is merged with the next version. Testla made a kind of hardware git.

Agreed, Tesla is playing 3d chess while the legacy automakers are stil playing checkers.

5000 changes a year and still with the bad panel gaps. LOL. I got another on order though.

Preach Lars👏👏

Machines building machines (EV's) is working. The changes and upgrades being made AND EXECUTED at the Human level, on a daily and weekly basis, is breath-taking! There is no Legacy Company doing what Tesla is doing! Very exciting! As I have posted elsewhere, I know Mr. Musk thinks and dreams big, and implements those ideas. It will be the Materials, like being able to procure enough Lithium, so you can Scale your Manufacturing up to 1 to 2 Orders of Magnitude, that is problematic. Going from 750,000 vehicles in 2021, to something like 7.5 million / yr. or 15 or even 20 million / yr. will require 100's or1000's of employees just procuring, Lithium from different sources, to keep up. Lithium and Battery production will be the "Rate-limiting Step", as we say in Chemistry, through-out this entire Enterprise.

So far the only company I could see being competitive to Tesla in the future is byd

The speed of innovation is fantastic at Tesla. The employees are overqualified and brilliant. But Tesla will win because of superior ability to see the future and superior ability to start with a truly clean sheet when designing a new model. Only Tesla understood seven years ago how many batteries they will need now and going forward. Only Tesla could possibly come up with entirely new and novel designs like the Cybertruck, or the Octovalve and so on. Pace of innovation is great, scale and character of innovation is even more important and no one else is anywhere near Tesla there.

Tesla is making robots with wheels. Not just cars. These robots will become smarter and better with time.

Another great video. Thank you & merry Christmas Lars.

Great work as usual. Happy holidays! Thank you.

One of the best episodes you have made to date ⭐️⭐️⭐️⭐️⭐️⭐️⭐️⭐️⭐️⭐️

Tesla setting for AUtomatic money-making Machine!! Bravo!!

Thanks Lars for another very informative video.

How does Tesla pay to workers and engineers for innovation?

LARS!! Great information throughout 2021!! Thanks for your excellent efforts keeping us up to date with our mighty TESLA JUGGERNAUT!! Greetings for the season to you and your family!! All the best and many massive returns in 2022!! Your loyal Canadian TESLA SUPERFAN!! GIDDYUP!!

In my view the biggest elephant in the room, or perhaps achilles heel, of the rapid improvement, is that batches of Tesla's, although better due tchanges, are slightly different to one another. The bad thing about that, and not enough is talked about about this, is that cars do break, and thus every iterative Tesla being slightly different, means that there will be less consistency in repair and therefore every Tesla have a different repair cost, because every Tesla's will have a different repair manual, thus need a different repair schedule and learning curve for auto and parts repair, let alone that Tesla could even manage stock of different parts for different batches of cars, perhaps making Teslas virtually irreparable, which means every Tesla in essence, just like the iPhone is planned for obsolescence. As I view this issue, to me it means, although Tesla is a good car out of the factory, due to poor repairability to to iterative improvements en less consistent design of iterative upgraded Tesla's, to mthcar loses value over time as there is no realistic real world scalable management for cost-effective repair of Teslas, without significant overhead costs(due to new parts likely being unique to batches of Teslas, each batch will need unique parts, and unique parts are crazy espensive in cars in general, Tesla thus far has not shown any improvements of affordable cheap parts without costing an arm and a leg). Teslas are not cheap cars and maintain their value. I think we're going to see the end of car ownership for most people on the future of sustainable transport, for if this is the future of manufacturing and maintenance of cars, it will be too expensive to manage over the years. I think car rental will explode for most people to make ends meet in sustainable personal transport. It will be then of car ownership simply because most people can't afford the upfront costs and future expensive maintenance costs, not like ice cars on the second, third and fourth hand markets. As EV's hold their value longer, because demand is high, people still need to pay higher upfront costs second and third hand and repair parts will still not me cheap. I think for the next few decades we will see a radical change of the car, not as a status symbol to own, but more as a ride sharing device. Wouldn't be surprised to see public electric transport radically change as well in that taxis, minibuses, busses and trains will have stops inside buildings, radically changing urban development where people can enter public transport warand dry inside as public transport does not pollute, which means we need the car less in the city, and can manage last mile shopping with very convenient public affordable transport that can drop us and pick us up in th shop doorstep.

Man! It is so easy for companies to just copy what everyone else is doing. It is hard to innovate, but to do it at rate Tesla does it seems almost impossible. The complexity involved in such an innovative sistem is mind bugling. If we look at the speed other companies have made improvements to their products throughout history and compare it to Tesla, Tesla speed seems super human. It seems like Tesla has been organized by a super intelligence from another planet.

Sandy Monroe explained it perfectly

Legacy automakers definitely have more than ten years to make changes. Most of their profits are after sales parts. Even if they stopped selling any new cars today, they will still have substantial revenue for some time. However I do agree that it will be very very painful for them. Mainly because, as sales revenue drops they will find it more difficult to raise capital. However governments are very likely to help them out. There is no way that the Japanese or German governments will let their car industries die

Very much enjoyed this episode Lars. Excellent. I so enjoy watching Elon Elon.

The Tesla phone is going to do the same thing to disrupt that industry also! Look out Apple!!!

How do changes in a model 3 in Fremont affect shanghai and Berlin and vice versa?

First

Lars, dude, you're one of my 4 favorite Tesla podcasters. I watch about 12 - 15 different podcasts covering Tesla. You have some of the best information content and vids and you make it very entertaining. "Solving the Money Problem,"' "Chicken Genius"' and "The Tesla Economist" are my other favs. Please keep up the good work, its very much appreciated.

AWESOME VIDEO L !

Thanks for sharing.

Rum and ICE...gin and ICE...Soft drinks and ICE...old doddery stuff that suits legacy fossilized factories. EVs go with freshly squeezed organic juice.

5:45 Tesla's revenue grew to around 31.5 billion U.S. 2020 VW Group Volkswagen AG annual revenue for 2020 was $254.6B U.S. 2020 VW AG 84 Years old Tesla 18 Years old Those numbers are pretty irrelevant, I know but, it shows how debt can be made.... well see how much profit Tesla makes, when it gets 84 years old. Total debt: $11.69 billion

Easily the most important and informative Tesla related video of 2021, nicely covering the relevant argument of the time; a true gem! Congratulations, and thanks for your good work, Lars!

They just need more factories…oh…there will be TWO more! The Fremont factory is old and not idea. Shanghai is. Now imagine TWO new factories bigger, newer, even more efficient than Shanghai with their own battery manufacturing on campus. Wow! Stock will hit $1,400-$1,600 in 2022

VW's infrastructure ought easily be used to continue producing everything it always has With required EVolution Except the drivetrain/battery platform Into the near future Concentrate your new factories on evolving and building the skateboard Marry them somewhere along your new line "Plug in" so to speak While building your more intergrated mega be like Elon factories Good luck I owned a 1962 split windscreen Kombi Same vintage as me Died half way across the Nullabor in 1984 RIP Zombie-saurus Rex👻*

I am becoming concerned at your on-going rhetoric good Sir. Basically, you paint a picture of a future World with only ONE player - TESLA. As you claim - for example - that VW & Toyota are beginning to see the light, how can it be that they do not also soon realize that they will need to acquire much more debt to avoid closing their doors. No, you don't just throw money at the problem, but you said it yourself - they need to change the way cars are built and THAT means dumping the budget concept with its attendant constraints among many other principles that have served them well for many years. JIT is probably one of the big ones to avoid on-going difficulties due to supply-chain disruptions similar to the last two years. I seriously doubt (growing pains aside) it will take the 'converted' very long at all to 'copy' how TESLA production functions. So your concept of using the trends of now, to declare IMPOSSIBLE for the giants to catch up in EV manufacture is kind of silly. When implementation of an idea or manufacturing paradigm finally takes hold on a global scale, the uptake is NEVER linear. It is always exponential. TESLA carved the trail. The rest will - of course - follow the trail already blazed. Q. Do you really think that only TELSA can build a mega-factory in just 15 months? Q. Do you really think the TESLA will be the only truly viable EV on the road in say 15 years? Q. While TESLA certainly has a large concentration of fine minds in their design and production facilities, do you really think they have a MONOPOLY on such talents? Suggestion... GO WEST YOUNG MAN!

Tesla Matrix Factory. Scary. Machines, robots, AI Technology building EV cars. When will they eliminate humans inside the factory. Replaced by androids capable of making better than human decisions and working 24/7 the whole year round. The factories are more impressive than the cars. My Honda Odyssey with 360k is 17 years old. Need to replace it with something for the rest of my life. Will a Tesla do for the next 30 years?

A companies people are it's most valuable resource. Your team isn't going to just walk in the front door. You have to build a team. In real estate it is location, location, location. In business it is culture, culture, culture. However, culture is herd mentality, creativity lives in the fringes. How good is a particular course of action and how can we measure it in complex systems? Pragmatic idealism is the idea that we should value the methods that actually work, as a method of interaction, having measurable consequences. The pragmatist; don't bother me with the details, make it work. The pragmatic idealist; Let's find out what actually works. The idealist; let's come up with as many great ideas as we can and give them to the pragmatic idealist. The engaged employee; our team is always reaching for and focused on the goal. The disengaged employee; whatever man... The actively disengaged employee; chaos is fun, let's screw something up or, I must share my misery.

So I just want them to solve this Self Driving conundrum, as I was unimpressed with the release of this holiday update! I saw no improvement in the driving situation I’m experiencing now & for the life of me I don’t understand why they cannot solve this phantom braking issue, as the car wants to stop or attempt to stop at every damn red light, even when the light is green!

🚀Tesla

Please do not mock Nokia until after you've done a deep dive into their history. Nokia is NOT a failure. They sold their mobile phone division to Microsoft for billions of dollars, and it was Microsoft that failed, NOT Nokia. Nokia has a town named after them. Nokia started as a company around 1885 (NOT 1985). I read the book :)

Hi.... I think we should stop saying changes..... let's start thinking and saying modifications that constantly improve the product.

BAck in the 80's everyone was looking at Toyota and the Japanese manus. Toyota used(s) a version of Kaizen aimed at slow, incremental improvement. They use to say they had over 10,000 improvement suggestions per year. Right! If even a few of those suggestions led to improvements of any value you would have to change too much on the assembly line and in the end, they didn't make real improvements. The Japanese are focused on variation and limiting it until they have high quality. This works for a little changing design. Note many of the car designs for all manufacturers are similar. Also in the improvement cycle are breakthroughs. They tried to avoid those until a few years down the line and is something the US should have taken advantage of, and which only Apple really did. Now Tesla has achieved the breakthroughs in the EV shift, new engineering from ground up, redesign on the fly (e.g. processors) and more. It's a great time to be alive!

had an argument with someone, i told them the world is playing checkers, elon is teaching a whole new generation to play 3D chess. Tesla isn't building cars and they aren't ONLY building new innovation, they are building up the new CEOs of the world. Tesla makes cars but it's actually building a new world.

This is exactly what is setting the paradigm shift between the Fourth Industrial Revolution and the rest. The legacy makers still think they work in the second. Just like the initial industrial revolution saw the cottage country unable to keep up with the steam-driven factory machines, and got pissed... now Legacy Auto IS essentially cottage country compared to Tesla. Sorry, but the entire legacy automaker industry is going down. And I have a word for what I'm feeling. Schadenfreude.

Where is your list of: References? Citations? Peer revew articles? Sources? You have only made unsubstanciated "comments" with no proof to back it up!