Tesla Production Hampered By Flawed Parts and Costly Rework

Apr 12, 2018

Consumers who purchase luxury automobiles have a right to expect their vehicles to meet high-performance standards.

Nonetheless, defects can occur either during the design and manufacturing phases or in the parts supply chain, resulting in the need for costly repairs. This is the controversy currently facing Tesla as the luxury EV automaker has reportedly been manufacturing a high ratio of flawed parts and vehicles.

Given the distinction of the Tesla brand, pursuing claims against the automaker over unresolved vehicle defects can be challenging, which makes having the advice and guidance of an adept consumer law attorney essential. This article is a look under the hood at automotive industry practice of remanufacturing and reworking parts and its impact on Tesla.

Is Tesla producing a significant volume of flawed parts?

Various reports cited several current and former Tesla employees who claimed many of the parts made or received at the automaker’s factory in Fremont, California were flawed and needed to be reworked. The defect rate was so high that it may have impeded production of the Model 3. Not only has the defective parts problem contributed to delivery delays, Tesla repeatedly failed to hit its production targets for the Model 3 and was recently forced to significantly downgrade production expectations.

To deal with the situation, Tesla seemingly enlisted rank and file technicians and engineers to assist with rework and repairs of parts “in-line” at the Fremont site. At times, seriously flawed or damaged parts were sent to Tesla’s remanufacturing facility in Lathrop. The luxury EV automaker denied that it engages in rework, however, noting that there is a difference between rework and remanufacturing. A company spokesperson also said that all Tesla vehicles are subject to exhaustive quality control and do not experience large amounts of rework.

The Fine Line Between Remanufacturing and Rework

Generally, remanufacturing involves engineers inspecting and repairing used vehicle parts, which are typically placed in certified pre-owned vehicles or those awaiting repair. While most automakers are involved in remanufacturing, much of this work is currently outsourced or handled by parts suppliers.

Tesla, however, is vertically integrated, which means that the company owns and operates not only factories, but service centers and dealerships as well. Moreover, there isn’t a large external supply chain of parts for electric vehicles, so Tesla would likely need to refurbish parts on its own. Nonetheless, the company denies that its remanufacturing group has been driven to take the unusual step of dealing with new car production problems.

The company has acknowledged, however, that it does employ remanufacturing experts who are tasked with assessing why certain parts may have failed in the field and relaying this information to manufacturing and other groups to make in-line repairs. Although luxury automakers like Tesla spend considerable time on planning and prototypes prior to commencing production, rework may occur when a significant amount of product either has not been built to correct specifications or the specifications were initially flawed.

A spokesperson for Tesla noted that rework is not unique to the luxury EV automaker, and that reconditioning older parts, rather than making new parts, is good for both the environment and customers, if done correctly. Tesla also claims that all of its vehicles are rigorously inspected post production so that each customer receives “a perfect car.”

The Takeaway

Tesla can’t simply chalk up production misses and reductions to cyclical slowdowns when the flawed parts problem may be the culprit for the Model 3’s woes. At this juncture, the extent of the reworked parts issue and its economic impact on Tesla owners remain unclear. If your luxury vehicle has been in for repeated repairs while under a manufacturer’s warranty, however, an experienced consumer law attorney can help you enforce your rights. Contact us today.

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