In 2008, the Model T celebrated its 100th anniversary and Tesla launched its first Roadster. While both cars have been called revolutionary, perhaps the real innovation took place in the factory.
Mass Producing Teslas
Elon Musk has said that, like his cars, the factory is a product because he is “building.the machine that builds the machine.”
As he explained, “You can’t have people in the production line itself, otherwise you drop to people speed. So there will be no people in the production process itself…” Instead, men and women will be there for the maintenance, the upgrades, and the glitches.
We can see the progress toward complete automation in Shanghai at the most up-to-date Tesla Gigafactory. Seven months after opening, its weekly capacity was 4,000 Model 3s and 200,000 a year. Meanwhile, car and truck Gigafactories will be built in Berlin and Austin, Texas.
In this video, you can sort of see the eight robots that are simultaneously working on one car:
Mass Producing Fords
In the beginning, teams of Ford workers gradually assembled a car. The chassis took 12 hours to finish while magneto production required 15 minutes and 29 workers. (A magneto helped to start the ignition.)
Imagine people’s astonishment in 1913 when the Ford Motor Company experimented with conveyor belts that streamed parts to the worker. The basic idea was to use precision-made interchangeable components with a moving assembly line. Scale went way up, cost went down, and the results were stupendous. Using 14 workers doing repetitive tasks, magneto assembly time plunged to five minutes. Chassis production time dropped from 12 hours to 2.3.
As you might expect, output soared and per car cost dropped. By the mid-1920s, the lowest priced Model T was $260. We could say that the factory innovation pictured below had created an affordable car:
Our Bottom Line: Innovation or Invention?
In a recent Econtalk episode, author Matt Ridley discussed the difference between invention and innovation. Through invention, new goods and services are created. However, it’s innovation that makes the difference. Because of innovation, inventions become “available, affordable, and reliable.” Although, as he tells us, 21 people invented the light bulb, Thomas Edison was the innovator that brought it to city streets, offices, and homes.
Similarly, by mass producing Teslas and mass producing Fords, Elon Musk and Henry Ford moved from invention to innovation. Yes, other manufacturers have certainly introduced automation. But, it’s the impact of the innovation process that makes the difference.
My sources and more: It’s such fun when several ideas converge. Yesterday it started with the Econtalk episode on innovation. Then, Marginal Revolution alerted me to the Gigafactory video and related articles. And finally, it all sounded so similar to the Ford factory a century ago. We should note that Tesla robotics might not be as rosy as the sources I’ve discussed.
This was a fun post as I saw that Marginal Revolution piece and Econtalk episode. Another blog I follow, Tim Harford’s, today discussed the gradual retirement of the 737 airplane. He talked about its supposed replacement, the Concorde. Though this plane is a great new innovation, it was never a great innovation. It never got to be affordable and accessible enough to be a true innovation. He argued that maybe we shouldn’t throw out all old things just because they are old.
Thanks for alerting me to the Tim Harford article. It ideally balances our thinking about innovation.