Two new reports suggest that all is not yet well in Tesla's major U.S. factories.
The fresh investigative reports describe: a high level of waste of raw materials and rework required on parts made at the Tesla Gigafactory in Sparks, Nevada; serious paint shop fires and a bloated workforce, allegedly twice the size of what's required to build its cars, in Fremont, California.
Business Insider reported that, based on internal documents it reviewed, Tesla was scrapping or reworking around 40 percent of the raw materials and parts built at its Gigafactory as recently as April, an unusually high rate compared to other automakers.
That number is in line with an earlier report from CNBC where Tesla employees estimated 40 percent of the parts received at or made in its Fremont factory also required rework or repairs.
Tesla said in an e-mail to CNBC today:
As is expected with any new manufacturing process, we had high scrap rates earlier in the Model 3 ramp. This is something we planned for and is a normal part of a production ramp. Indeed, we have always explained that Model 3 margins would increase after costs begin to fall from elevated scrap and other early ramp issues — and they have. Our scrap rate for batteries has decreased by almost 60% since January as we have improved our manufacturing processes. It's also important to remember the reason we scrap parts: because we want to ensure that only the highest-quality parts are used to create the best vehicles for our customers. This is a part of the reason why Tesla's customer-satisfaction scores for Model 3 vehicle quality and condition are at an all-time high of 93 percent.
In a separate investigation, a former Tesla employee told the Daily Beast that a paint shop fire there turned a paint sprayer there into a "flamethrower." The source told the Daily Beast: "Literally it's a torch f***ing flying around, the paint spraying, the paint's on fire, scorching the car," the employee said.
As previously reported, Telsa has experienced at least 4 paint shop fires since 2014 including one in 2016 and one this year in April that have burnt expensive robots and halted production for more than one shift.