Tesla&#x27;s two top manufacturing execs quit just before Musk announced that he wanted volume production of the Model 3 in 2018 instead of 2020.  You can imagine the discussions that went on.  Perhaps in time details will surface.<p>Tesla now faces transitioning from a low-volume high-margin manufacturer to a high-volume low-margin manufacturer.  That&#x27;s hard.  HP, IBM, and Xerox tried that, and didn&#x27;t do too well; all eventually exited the low end and downsized.  Even Intel is exiting the low end; they&#x27;re giving up on the tablet and phone market, as a YC article pointed out a few days ago.<p>Tesla is trying for good, fast, and cheap at the same time.  Tesla&#x27;s track record is that they can do &quot;good&quot;, but late and at a high price.  (Space-X has &quot;good&quot; and &quot;cheap&quot;, but is about two years behind announced schedules. Their competition is even slower, so that&#x27;s OK.)<p>Tesla looks like they&#x27;re doing a good job of manufacturing, but their Fremont plant has 3,000 employees for 50,000 cars a year. That&#x27;s 125 labor hours per car. They can&#x27;t make a $35K price point with that. The big manufacturers are in the 15-30 hour range.[1] That&#x27;s the big problem. Tesla needs to learn how to reach Toyota levels of production efficiency, and they have a long way to go.<p>Making 500,000 cars a year isn&#x27;t in itself an obstacle.  The Mercedes A-class production line cycles every 40 seconds. That&#x27;s 720 cars per shift.  If that line ran 2 8-hour shifts (you need a shift for maintenance) and 7 days a week, it could build over 500,000 cars in a year.  That&#x27;s just one production line.<p>It&#x27;s getting that production line built, working, thoroughly debugged, and running at a low labor cost that takes some time.  Tesla is going to need people who&#x27;ve done that before.<p>[1] <a href="http:&#x2F;&#x2F;www.autonews.com&#x2F;assets&#x2F;PDF&#x2F;CA2018861.PDF" rel="nofollow">http:&#x2F;&#x2F;www.autonews.com&#x2F;assets&#x2F;PDF&#x2F;CA2018861.PDF</a>