Hey, maybe it will work? Credit - public domain

So, why is it that SpaceX can be ahead of the pack and cheaper, while the clearly easier task of building electric cars is seemingly beyond Elon Musk’s other firm? For it’s entirely true that building an electric car is a great deal easier than building reusable space rockets – and easier again than building cheap reusable space rockets. The thing is that it’s not easier to build 5,000 electric cars a week. That requires another and different set of skills and technologies, those of mass manufacturing. A difficult set of skills to acquire as well:

Elon Musk’s most successful companies, Tesla and SpaceX, are having very different years in 2018.

SpaceX debuted a powerful new rocket, the Falcon Heavy, and has successfully launched seven orbital missions. Tesla has struggled to produce its Model 3 electric sedan at promised rates, raising questions about the company’s cash flow and encouraging short-sellers. On March 23, a driver was killed after his Tesla’s autopilot system steered the car into a barrier, though the system is not intended to be used without a driver’s hands on the wheel.

Analysis of both companies tends to focus on Musk’s social media antics and brash confidence, but both are run by professional teams and their business success is determined as much by market forces and global trends as Musk’s brand of strategic risk-taking.

Indeed, the growing pains faced by Tesla are connected to a simple fact: It’s trying to do a much harder job than SpaceX.

Quartz is quite right there, Tesla is attempting the much more difficult task. Knocking out a few rockets a month is an interesting task but once they’ve been designed it’s something that can be achieved reasonably easy. And building an electric car isn’t beyond the wit of man either. But building 5,000 electric cars a week to an acceptable standard capable of being delivered to a paying customer is a very much more difficult task. If it were easy then everyone would have done what Ford did in 1913 – they didn’t – and all the American companies would have followed Toyota in the 1980s and they didn’t do that either. Mass manufacturing is devilishly difficult to get right. Much more difficult that the occasional tube of explosive lit up into the heavens.

If Tesla had decided – or if Musk had decided that Tesla would – to stay as a small manufacturer of exotic cars then that would have been the easier task than that at SpaceX. It’s the scaling up to mass production which makes it the more difficult.

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Bloke on M4
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Bloke on M4

Yup. It’s harder for Tesla to tool up for the scale to take on the big guys than the tool up that the big guys have to make to go electric. Plus, all the big guys know this is the future when the batteries arrive that can do the job. Toyota already have plug-in hybrids, BMW and Renault are making electric cars. Honda are releasing an electric next year.

benaud
Member
benaud

SpaceX is a privately held company with almost no original technology.

Maybe like everything that Musk is involved in is smoke and mirrors. Shooting a rocket into the air is only difficult if one is doing it on a budget.

Spike
Member

You left out that Tesla needs to make money building the products, and that everything that makes the Model 3 desirable, such as high-quality assembly, has to continue to be the case when you insist on a production rate that overdrives your supply of managers. Musk is an incredible impresario but may have too many things going on at once and may have overpromised. Notably, he won’t make money at the $30,000 price point, so he may run out of capital, and credibility to get more.

Spike
Member

PS—Another possible omission: It is not Rocket Science to take a cost-plus-percentage contract from NASA, which will willingly agree to change the terms if you can show that the assumptions were unrealistic or if NASA changed its specifications or if you simply need more money to give your investors the rate of return you assumed you could when you signed the contract. Jumping into the free market, where the customer can and will say no unless you prove you are delivering a better value than anyone else, you need to be excellent. NASA used to be a regional monopoly on… Read more »