I went to production heaven
This is an over dramatic take. It&#x27;s too soon to know how Volvo&#x27;s China factory is working, the initial signs are promising but there&#x27;s so much more to car quality than how the manufacturer assembles it.<p>Historically, we&#x27;ve seen inconsistent quality out of Chinese car parts and there&#x27;s nothing you can do on final assembly to make a defective wheel bearing work better (the only option is to assemble the car with a better wheel bearing). To the extent that the Chinese volvos have Chinese component quality problems, the Chinese factory is further removed from production heaven.<p>Toyota&#x27;s Tahara plant is recognized as the plant capable of the best car manufacturing in the world and it wouldn&#x27;t be possible without the Japanese supplier base. It would have been nice if they compared and contrasted Tahara with Fremont but the Chinese Volvo plant offers a better comparison in terms of modernity.<p>But I had a horse in the race. I was a model 3 reservation holder but opted for the refund when the quality issues came to light. I take machine quality very seriously and I was worried about resenting the build quality on my model 3. Though I think Tesla can get it right, the complexity of an electric car is much lower than an ICE car.<p>Toyota has had a target on its back since about 1973 (when its quality advantage became decisive) - everyone benchmarks Toyota&#x27;s manufacturing. When Toyota launched the Lexus LS400 in 1989, GM engineers concluded that they couldn&#x27;t replicate the precision and quality with a blank check and an aggressive time frame. In 2010, Consumer Reports estimated that an average 1993 Lexus LS400 had as many trips to the dealer &#x2F; failures as a brand new Mercedes S class. Now there are more issues at play with a 17 year old car than build quality, but good build quality is a good place to start.<p>I think Musk has called out Toyota by name as their benchmark. Tesla has a long way to go but I give them the highest odds of making it. They have the most opportunity to consolidate their supplier base. They have one of the most simple cars to manufacture and they have some the cheapest capital - they can turn it into a money game just like Amazon would. They&#x27;re in the best position to actually hit the target on Toyota&#x27;s back.