"It's actually even more important to design the factory than it is to design the product itself." "Expect Level 5 autonomy in "about two years." (Tesla CEO Elon Musk, video interview below)
Telsa will begin deliveries of their Model 3 tomorrow and I think that might mark two inflection points -- one in the manufacture of electric-powered cars and the other in their autonomous control. To put the Model 3 in context, consider two earlier automotive inflection points, the Models T and A Fords.
Model T runabout
The first mass-market car was the Model T Ford, which began production in 1908. Ford was able to produce large numbers of Model Ts and sell them at a relatively low price because they were mass produced on an assembly line, which reduced cost and increased production rate significantly. Ford sold 10,666 Model Ts in 1909. The runabout (roadster) sold for $825 and the four-seat touring car was $850. Over the years, they refined the design and added sedan and coupe models, but by 1927 sales were falling and competitors were offering new features. Ford stopped Model T production and retooled to produce the Model A.
Model A roadster
The Model A began production October 20, 1927, and went on sale December 2. (They called it the "1928" Model A). The Model A offered more models than the Model T and a choice of colors. The mechanical design improved in many ways over the Model T and the driver controls were similar to those of today. If you know how to drive a stick-shift car today, you would be at home in a Model A, but would have to be taught how to drive a Model T. The Model A was a mass-produced, modern car and Ford had plants in Argentina, Canada, Denmark, France, Germany, Japan and the United Kingdom as well as the US.
So, why do I think the Model 3 might be as significant as the Models T and A?
Ford pioneered the assembly line in a vertically integrated factory and Tesla also hopes to transform the manufacturing process. The size and design of their Gigafactory is unprecedented.
When complete, Gigafactory 1 will be 6 million square feet, making it the biggest building in the world by footprint and second only in volume to the Boeing factory in Washington state. It will produce batteries for homes, vehicles and power companies as well as the Model 3 powertrain -- the motor and gearbox assembly. Final assembly of Model 3s will be done in a separate automotive plant, but they expect subsequent Gigafactories to incorporate the entire auto assembly.
Tesla views a factory as a machine for making machines and they have approached its design as one would approach the design of a multilayer chip. They hope to be able to improve the factory "clock speed" and "density" over time, leading to a 30% cost savings compared to other battery factories. Tesla's manufacturing strategy was outlined in this presentation at the introduction of Gigafactory 1:
Gigafactory 1 output will ramp up as it is built out and, by 2020, they expect its output to exceed 2013 global battery production. They plan to announce three or four more Gigafactories this year, one of which will probably be in China.
Tesla's "wall of patents"before
and after (image source)
Tesla's intellectual property policy is also innovative. On June 12th, 2014 they released their 249 patents, saying they would not sue anyone for using their technology in "good faith." As shown here, they took down the plaques on their "wall of patents" after releasing them, replacing them with an image and the slogan "OEMS all our patent are belong to you." (I think Yoda wrote that for them). It seems that Elon Musk sees other car and battery manufacturers as collaborators in the effort to rapidly achieve conversion to sustainable energy -- he realizes he cannot do it by himself.
Autonomous Control
Many auto manufacturers are working toward self-driving cars, but Tesla seems to be leading the pack. Elon Musk outlined the planned roadmap for the Model 3 in the following interview:
(If you are in a hurry, the discussion of Tesla cars and trucks begins about 11 minutes 10 seconds into the interview, but I'd recommend listening to the entire interview, which also covers boring tunnels, solar roofs, SpaceX and Mars).
Level 5 autonomy
Musk says the Model 3 will come with sensor hardware that will enable them to achieve level 5 automation, as defined by the Society of Automotive Engineers (SAE): "the full-time performance by an automated driving system of all aspects of the dynamic driving task under all roadway and environmental conditions that can be managed by a human driver." For a summary of the definitions of SAE's six levels (0-5) of autonomy, click here and for a detailed defintion click here.
Those sensors will enable an autonomous cross-country drive this year. Musk says "November or December of this year, we should be able to go all the way from a parking lot in California to a parking lot in New York, no controls touched at any point during the entire journey." He added that it could have been any two cities on the highway system in a given country "We could change it and make it Seattle-Florida, that day, in real time. So you were going from LA to New York; now go from LA to Toronto." (I wonder if it would work in nations where they drive on the left side of the street).
But that demonstration drive pales in ambition compared to his prediction that, barring regulatory constraints, they will release a software update that brings the Model 3 up to Level 5 autonomy in "about two years."
Other manufacturers are less optimistic -- why might Tesla have a lead over the others?
The artificial neural net technology employed in autonomous vehicles depends upon software design, fast hardware, and access to relevant data. Musk has made several investments in artificial neural net companies, including Go champion DeepMind, and he says his aim is not a financial return but keeping abreast of developments in the field.
That would keep him at least even with possible automotive competitors in hardware and software design, and he has a definite data-collection lead. Tesla vehicles have been online and collecting data for several years. From their inception, Teslas were conceived of as "platforms" for downloadable control software as well as data-collection input devices.
The Model T Ford was the first mass-market car and it had little competition for some time. While the Model 3 may be innovative it, like the Model A Ford, already has competition like the relatively low-cost Chevrolet Bolt and virtually all auto manufacturers are introducing electric or hybrid vehicles. (Chinese owned Volvo has announced that all the models it introduces starting in 2019 will be either hybrids or fully electric).
Of course, Elon Musk predicting radically improved manufacturing or Level 5 autonomy in two years, does not guarantee he will achieve those goals, but do you want to bet against someone who has made landing used rockets on barges at sea a somewhat routine event?
The Mac and the Tesla Model 3 have a lot in common. For one, the Model 3 was not the first electric car or Tesla's first electric car and the Macintosh was not the first computer with a graphical user interface (GUI) or Apple's first GUI computer, but both came out at just the right time.
Workstations, the Xerox Star and the Apple Lisa all had GUIs before the Mac, but they were too expensive and remained niche products. When the Mac came out, technology had just improved to the point where a consumer computer with a GUI could gain a foothold and catch on. The Mac, with its proprietary hardware and software, was the only GUI game in town for several years until technology improved to the point that commodity hardware could support a GUI and Microsoft brought out Windows 3 and 3.1.
Similarly, electric cars, including Tesla's, preceded the Model 3, but they were too expensive and inconvenient to grow beyond a niche market. Battery, material and other technologies have now improved to the point where the $35,000 Tesla will appeal to the mainstream. One does not have to care about the environment or global warming to like it. It's sensors, safety features, comfort, size and increased battery capacity (coupled with more charging stations and home chargers) and the ability to be upgraded via software download will appeal to a wide market, including owners of gasoline-powered cars.
As it was for the Mac, the timing is right for the Model 3. it's not too soon and not too late, but just right, like Goldilocks.
As technology improved, personal computers with GUIs became ubiquitous. The transition away from gasoline will take longer than the transition from command lines to GUIs because of the longer replacement cycle for cars, but the tipping point has been reached.
There are also financial parallels between the two. Tesla bankrolled the Model 3 from sales of the Roadster and Models S and X and Apple bankrolled the Mac with sales of the Apple II. Both were fading when the new machines came out. Tesla's stock is now 60% above its price on February 12 and the Apple II was running out of gas when the Mac was delivered.
Both companies developed comprehensive proprietary designs. Apple built the hardware and software for the Mac and Tesla is making the car, the software and the batteries.
But that is where the similarities end. Apple holds on to their hardware and software innovations, protecting them with patents and law suits. Not Tesla. On June 12th 2014 Tesla released all of their 249 patents, saying they would not sue anyone for using their technology in "good faith." As shown below, they took down the plaques on their "wall of patents" after releasing them, replacing them with an image and the slogan "OEMS all our patent are belong to you." (I think Yoda wrote that for them).
Tesla's "wall of patents" before and after (image source)
It seems that Elon Musk sees other car and battery manufacturers as collaborators in the effort to replace gasoline-powered cars rather than competitors.
Disclaimer -- I am kind of an Elon Musk fan boy and make my students watch these videos of Musk being interviewed by Sol Khan, announcing the formation of Tesla Energy and recruiting engineers for the SpaceX satellite Internet project.
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Update 4/7/2016
In a blog post entitled The Week that Electric Vehicles Went Mainstream, Tesla says they received 325,000 reservations for the Model 3 in the first week. They also say that translates into about $14.5 billion in sales if all the reserved cars are purchased.
The base price of the car is $35,000, but these figures average out to nearly $45,000 per car. Elon Musk indicated that the base price included all of the sensors and software, but they clearly expect to sell relatively expensive accessories like a second motor for four-wheel drive and additional batteries for extended mileage per charge.
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Update 10/20/2016
Elon Musk has announced that all Teslas shipped from now on will have the hardware needed to support fully autonomous driving, which the National Highway Traffic Safety Administration defines as:
The vehicle is designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip. Such a design anticipates that the driver will provide destination or navigation input, but is not expected to be available for control at any time during the trip. This includes both occupied and unoccupied vehicles.
The new Tesla processor has 40 times the computing power of the previous generation and runs neural net vision, sonar and radar processing software. The following video shows a test drive and the Tesla sensors.
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Update 10/24/2016
The Tesla is also similar to the Macintosh in its attention to design and appearance. The new Teslas ship with eight cameras with 360-degree viewing at up to 820 feet of distance, 12 ultrasonic sensors that can detect both hard and soft objects and a forward-facing radar that helps see through rain, fog, and dust.
That is 21 devices, but you have to look carefully to see them -- they are small and unobtrusive, as shown here:
Let's not bury the lead -- I admire Elon Musk. He is an inventor/entrepreneur reminiscent of people like Samuel Morse and Thomas Edison. Let me tell you why I admire him, then suggest that you watch videos of an interview of and two talks by Musk.
Musk was thoughtful at an early age. While he was in college, he concluded that the three areas that would most affect the future of humanity were the Internet, sustainable energy and space exploration. He did not expect to found companies in all three areas, but went to grad school to work on energy storage for electric cars (using capacitors, not batteries). He realized that his capacitor storage might fail and decided he would rather work on the Internet than study it.
He speaks of large problems he wants to solve, not of business, profit, return on investment or stock prices -- those are means to his ends. He wants to bring Internet connectivity to sparsely populated and developing areas and provide 50% of global, long-distance connectivity (5-15 years), accelerate the advent of sustainable transport (half of our cars to be electric in 13-14 years), send people to Mars (12 years) and eliminate use of fossil fuels (a generation or two).
He is not trying to do any of this on his own -- he wants to be a catalyst. Tesla was created to accelerate the advent of sustainable transport, not to dominate the car industry, so they will not initiate patent lawsuits against anyone who, in good faith, wants to use their technology. Similarly, Musk sees their huge battery factory, Gigafactory version 1, as a product to be replicated by others -- The Tesla policy of open sourcing patents will continue for the Gigafactory and battery systems.
He is a relaxed speaker with a sense of humor. Musk and Steve Jobs are two of the best speakers I have seen, but a Jobs presentation was planned and rehearsed to perfection, while Musk seems to be speaking off the cuff. That being said, his product introductions in the following Tesla Energy talk were reminiscent of Jobs -- he used a few slides with images, not text, and spoke over them in the Jobs style. He even included a Jobs-like surprise. He revealed that the auditorium and talk were powered by his batteries, which had been charged using solar power (image below) -- like Job's "one more thing" moments or the "three new products" that turned out to be the iPhone.
If you would like to get to know Elon Musk and how I came to admire him, I recommend the following videos. (I have my students watch them).
Sal Khan of the Khan Academy interviewing Elon Musk
April 2013, 48:41, 502,483 views
This conversation gives insight into Musk’s goals and his motivation for investing in Tesla and SpaceX and you get know Sal Khan as well.
Announcement of Tesla Energy
May 2015, 18:02, 2,112,997 views
In this presentation, Musk announces products -- integrated, open-source battery systems for consumers, enterprises and utilities and the open source Gigafactory to manufacture them.
If you'd like to see more, there is a YouTube channel that claims to have links to every Elon Musk video and you can read an excerpt from a forthcoming biography of Musk here. It's a long post that traces events from his early desire to grow plants on Mars in order to stimulate interest in space through the near-bankruptcy of Tesla and/or SpaceX, which was averted at the last minute by winning a NASA contract. You can see a video (4:53) of an interview of the author, Bloomberg's Ashlee Vance, here.
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Update 6/29/2015
This post looks at "the bad behavior of visionary leaders" and concludes that leaders like Musk, Jobs, and Bezos could be more effective if they behaved better:
The question raised by the stories of these three men is not whether being tough, harsh and relentlessly demanding gets people to work better. Of course it doesn’t, and certainly not sustainably. Can anyone truly doubt that people are productive in workplaces that help them to be healthier and happier?
The more apt question is how much more these men could have enhanced thousands of people’s lives – and perhaps made them even more successful — if they had invested as much in taking care of them as they did in conceiving great products.
I've personally been chewed out by the young Bill Gates and wonder whether he should not be added to this list.
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Update 8/2/2016
Gigafactory footprint:
room for 93 Boeing 747s or 50 billion hamsters
Elon Musk and JB Straubel, Tesla's Chief Technical Officer, gave a short presentation at a ceremony celebrating the completion of the first portion of their first Gigafactory. Some of the points they made:
The Gigafactory is a machine for making machines -- designed just like a multi-layer chip.
It's more important to design the factory than to design the product it makes. (The Model 3 design is done).
They will improve the factory "clock speed" and "density" over time.
This is their first Gigafactory and they anticipate at least one will be built on each continent.
When complete, Gigafactory 1 will have production capacity equal to all the other lithium ion battery factories in the world combined.
Gigafactory 1 will operate 100% on sustainable energy.
They expect to cut the production cost of their electric vehicle batteries and Powerwall storage packs by 30 percent.
Batteries will be recycled, significantly reducing the cost of future batteries and eliminating the demand for "replacement" lithium.
Their self-driving car target is to be about 10 times safer than the average driver.
Here is the video of the presentation:
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Update, August 5, 2016
Ten years ago, Elon Musk published his first master plan. Here is a summary:
Build sports car
Use that money to build an affordable car
Use that money to build an even more affordable car
While doing above, also provide zero emission electric power generation options
With the roadster, models S, E, and 3 he has achieved the first three goals. Solar City is the fourth.
Create stunning solar roofs with seamlessly integrated battery storage
Expand the electric vehicle product line to address all major segments
Develop a self-driving capability that is 10X safer than manual via massive fleet learning
Enable your car to make money for you when you aren't using it
The first step is underway -- he is building the largest battery factory in the world (by far) and Tesla has purchased SolarCity. No doubt, the Gigafactory will turn out batteries integrated with solar panels for roofs and electric cars.
Tesla's purchase of SolarCity has been controversial, but I would not bet against Elon Musk.
Note that this is just his short-term plan to free the world from fossil fuels. It's part of the long run plan to create a colony on Mars so he can die there (without crash landing).
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Update 2/4/2018
You can see links to videos and transcripts of 166 of Elon Musk's talks, press conferences, etc. here. The first talk is an October 2003 presentation in the Stanford University Entrepreneurial Thought Leaders series and the last, so far, is his September 2017 talk "Making Life Multiplanetary" at the meeting of the International Astronautical Congress in Adelaide, Australia.
The site is a community effort -- a large-scale collaboration. When Musk gives a recorded talk, a link to the video is posted on a wiki and the community members transcribe it. If you view a talk and the transcription is incomplete, you can pick up where the last editor left off and extend the transcript.
