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Rappers rhyming about cars is not unusual. Escalades had a moment, Bentleys, Benzes, but around 10 years ago, a new car brand started popping up in lyrics. ♪ Tesla coupe with the scenic roof ♪ ♪ Don't need to hide it ♪
Tesla. And this new car, it wasn't just showing up in the songs. I worked in the hip-hop industry, and everyone would be talking about, you know, you need to get a Tesla. This is Arthur Dreesen. Back then, he lived in Los Angeles, and suddenly it felt like Tesla was in his ears and in his face. Just drove a Tesla with bow-fired clothes.
You would be in a studio and you'd walk out to the parking lot and now along with the really high-end BMWs and Audis and stuff, you'd start seeing Model Ss. Tesla Model S.
The tastemakers were speaking, and they were saying one thing. It was cool, it was hot, it was new. And then the cars looked so sleek. They looked like something out of a futuristic comic book. And it seemed like everyone driving them was rich and famous.
It was just kind of this perfect storm of technology, status, and consumerism. To be honest, the last thing that
I thought was cool was saving the environment. But Dreesen wasn't a producer or a music exec or a rapper. He was an assistant to the producer. He drove a Honda Civic. I knew I was never going to be able to afford a $100,000 car. You know, so it was kind of just this thing, you know, maybe in the future if I end up working my way through the system to where I'm making enough money to get that, then I'll get one. All right.
Welcome, everyone. In 2016, Tesla CEO Elon Musk stood on stage near Los Angeles getting ready to make a major announcement, the newest car in Tesla's lineup. Welcome, everyone, to the Model 3 unveil. We have...
Tesla's cars up until then were exclusive. They could cost up to $150,000 and production runs were limited, so they were hard to buy even if you could afford it. But building a few extremely expensive cars was never the endgame for Tesla. The Model 3's intended base price was $35,000. Not everyone had that kind of money, but it'd be cheap enough for the masses. And the masses were already showing up.
This is kind of crazy, but I just learned, I was just told that the total number of orders for the Model 3 has now passed 115,000. Sat at my apartment, watched the whole thing. Then I went to Tesla.com. I clicked a button. I put in my name, address, and my credit card info. Dreesen put down a $1,000 deposit. Then I got an email saying that I had a spot in line.
The coolest car brand in America was about to go mainstream. There was just one problem. The Model 3 didn't exist yet. This is Land of the Giants. I'm Tamara Warren. I've covered transportation for over two decades. I'm the founder of Le Car, a website about cars and culture, and a former editor at The Verge. And I'm your co-host this season.
Before Musk got on stage that night, Tesla had already defied expectations for how popular an electric car could be. But now the company was trying to do something else: make cars for a fraction of the price and make millions of them.
So much hinged on the success of this car. Fail, and Tesla would at best remain on the margins of an industry dominated by gas-powered cars made by the same stodgy companies that had been around for a century. Succeed, and it could become a new giant, and even change the industry itself. Today, we'll find out how Tesla built an electric car for the masses. So, do you want to see the car? Yeah!
Well, we don't have it for you tonight. I'm just kidding. Well, kinda. He only had a prototype of the Model 3. We had built two working cars. They were constructed in ways that obviously didn't represent mass production. This is Dugfield, who led production of the Model 3.
He was at the launch that day, and he remembers the other employees pooling bets on how many people would reserve the new car. I remember thinking maybe 250,000 or something like that. That's an awful lot of cars. Try 325,000. We came in the next morning, and it's like you work for a different company now. Everything's changed. Everything has changed in the industry. Everything's changed at Tesla, and that's why we were there.
Before that night, Tesla was considered a fringe California tech company. The Model S was very easy to dismiss, and the volumes were tiny compared to the auto industry. The Model 3 unveil was a lot harder to dismiss.
The only other affordable mass-market EV was the Nissan Leaf. It cost about $35K, but no one was calling it sexy, and very few people were buying it. That kind of said it all about what the rest of the industry thought was possible for electric cars. Tesla was saying that it would make more than 100,000 Model 3s in just over a year.
And the shocking thing? The demand was real. It granted us the credibility that we could make a product that was wanted by hundreds and hundreds of thousands of people right out of the gate, way beyond people that were just trying to save the planet. But saying you were going to bring a car like this to market and actually making it happen? Two very different things. These things keep coming along from people outside the car business,
who have a tendency to treat the car business with disdain because they say, yeah, but that's the old Rust Belt stuff. That's Bob Lutz. He's been a top exec at all big three American automakers. And this is him back in 2011. You can kind of hear his skepticism and maybe even a little resentment. They all fall on their butts, I mean, without fail. And I hope the best for Tesla. You know, I like those guys, but...
I think Elon Musk and the guys are learning what it means to put automobiles into production. It ain't easy. It was a fiercely competitive industry where, you know, the survivors had to make it on very, very thin margins. And all of that capability in the auto companies developed over time.
Many, many decades. Ford, GM, Chrysler thought they had it all figured out. Their full-size pickups were the best-selling vehicles in America. They knew what sold, what didn't, and how to make a profit. They'd been fine-tuning their manufacturing process and supply chain for over 100 years. And the idea that startups could disrupt something as complicated and already dialed in as making cars? Preposterous. Their attitude was, if it ain't broke, don't fix it.
Field was painfully aware of this. Long before Tesla, he worked at Ford. I left this industry a very long time ago, sort of frustrated with it at the time. And so there was, you know, a little bit of fun around, hey, we're going to turn the industry upside down as well, which, of course, everybody laughed at us when we said things like that. So we wanted to prove them wrong as well.
So what did it mean for the company to get from over 300,000 reservations to actual cars and driveways? What it meant for Tesla is change the world. This was our mission and our destiny and the reason Tesla was on the earth. Okay, cool. Tesla wanted to change the world. Now what? Musk had a plan. Make a car and remake the way cars were made. Elon said this publicly and internally that
The innovation in the Model T wasn't the car, it was the assembly line. And that's what democratized owning an automobile. Musk was ready to question everything about making cars. No conventional wisdom was safe. To him, that would be the key to unlocking untold innovation. But to Field, there was another big reason they needed to rethink everything. They didn't have much space.
Tesla's one single factory was actually just an old GM facility in Fremont, California. And no surprise, it looked a lot like a traditional car factory inside — a standard assembly line kind of thing. That's how the Model S came into the world. We weren't going to buy another factory. And we had to make something like 10 times as many cars per square foot than we did with Model S. And Musk had set an ambitious deadline. He wanted to produce 5,000 cars a week by the end of 2017.
a larger car company would have just bought more space, not Tesla. Ready to question everything, right? The ambition was spinning up to really do something revolutionary and different in the way the product was built, not just in the product itself.
That's what Elon called the machine that builds the machine. And this machine would not be operated by people. Anybody who's been in the auto business for a long time knows that there's always been this kind of promise and hope for using robots in the car building process, but it's historically been a lot harder than many people anticipate. That's Tim Higgins, a reporter with the Wall Street Journal. He also wrote a book about Tesla. That was the kind of message that Elon was getting, but...
Elon's the kind of guy who doesn't like to hear "no." He's always been kind of in love with this idea of a lights-out factory where you have all these robots and you can literally turn off the lights and let them go to work and the car will come out the other end. He bets on his kind of core beliefs and kind of gut feelings and he started pushing the company to do this as quickly as possible.
Space on the floor was limited, so the team started to think beyond the floor. There was going to be multi-layers for the general assembly. We thought about the factory in three dimensions in a much richer way, I think, than a lot of factories that have been laid out. Tim Higgins.
And it was going to be a highly choreographed dance happening at kind of millisecond speed. And the idea would be that they could go fast and they could maybe have less people and they would save money maybe over time. Okay, interesting idea. Reinvent the assembly line to be an assembly robot cube? Musk coined his own name for this vision, the alien dreadnought.
Meanwhile, a couple hundred miles away in Sparks, Nevada, Tesla was looking to build something no other carmaker had tried before. It was this massive 3,000-acre property, but all that was on site at the time was one trailer.
that were just kind of propped up on bricks. And that trailer was the design headquarters for all of Gigafactory at the time. This is Ryan Melsert, an engineer who was part of a small team hired to build the Gigafactory in 2015. This was where Tesla planned to make its battery and powertrain for the Model 3. Traditional car companies source this stuff from suppliers, but that wasn't going to work for Tesla. Back in 2015, if you tried to design an electric vehicle and just source the batteries from existing channels,
then it wasn't economic to actually build an electric vehicle. Lithium-ion batteries were super expensive, the most expensive element of any EV. If Tesla wanted to sell the Model 3 for $35,000, buying from suppliers was going to cost too much. There also just weren't enough batteries out there. You start to do the math, and it was starting to look like
Gosh, Tesla was going to need all the cells that were being made in the world at that point. And so something was going to need to be done. So Tesla struck a deal with Panasonic, the go-to battery experts. Panasonic would build battery cells inside the Gigafactory. This gave Tesla an instant solution to its sourcing issues and freed up its team to focus on the powertrain, primarily the motor and battery pack.
Now, all of this would take place under the same roof. These are the recent pictures of the Gigafactory. This is a vital element. By the 2016 unveil, the Gigafactory had managed to graduate out of a trailer. It's what enables us to make the Model 3. And it's already operational today. But Tesla was still figuring out how to design and build the powertrain affordably. It was all physically there and it was physically running.
But we still weren't making cells that we could actually put in vehicles. Traditionally, car companies would spend maybe seven years bringing a new car out and more. And what Elon and team were trying to do was bring this out as quickly as possible. Bring out a new car and build an entirely new manufacturing process that no one had ever used before. What this meant for employees was very long work days. We would get in early in the morning when it was still dark usually.
Melsert would disappear into the vast windowless gigafactory in the middle of the Nevada desert. You can't tell what time of day it is.
And all of a sudden you look up and it's, you know, 7, 8 p.m. and it's dark outside again. Musk talked about sleeping on the factory floor himself. But for people working on the line amidst heavy machinery, the stakes could be much higher. Speed took priority over safety. We'll get more into the working conditions at Tesla later on this season. Right now, the point is, Musk was pushing his employees to do something that was, it turned out, impossible.
They were in a lot of ways trying to build the airplane as it was going down the runway trying to take off. I've also heard the analogy of changing the wheels on a moving bus while it's flying down the freeway. Kirsten Munson led customer satisfaction during the Model 3 launch. My job was to sell tickets on that moving bus, and that bus was often on fire, it felt like. So, yeah.
Traditional carmakers have the luxury of taking years to build new cars. They have cash reserves, and they're still bringing in money by selling existing models. Tesla didn't have a ton of either. Without selling cars, we wouldn't survive. So the pressure was real.
As Model 3 production struggled to tick off, she feared the worst. I felt like we were watching a slow-moving tidal wave that was coming, and it was about to break everything. That fear of failure was settling in on everyone. Elon held a press gathering with reporters, and I was struck by how glum he was. He came in and just seemed to be beaten down, very depressed, depressed.
And here he was on stage, and it just looked like he needed a good cry. Well...
We're building the cars as fast as we can. He didn't look much better in his presentation later that day. We're going to do everything we possibly can to get you the car as soon as possible. So we're going to work day and night to do right by the loyalty that you've shown us. He was months behind schedule, and things inside the Fremont factory were a mess. The company was still trying to get the robots working.
Musk pushed the deadlines again and set new goals. His naysayers dug in. Well, I think people are finally beginning to figure it out. They've drunk the Elon Musk Kool-Aid. You haven't heard my next big idea yet, but nothing's working.
And it wasn't just old-school car guys like Bob Lutz that were openly gloating. Quite literally, this defines the expression "going for broke." He's spending half a billion dollars on a gigafactory. I mean, he's going for broke here. Here's longtime Tesla investor Ross Gerber. So, real problems at the company, but you also had short sellers attacking the company, making it very hard for the company to raise money.
Short sellers are investors who make bets that certain companies will fail. If enough short sellers circle a company, the doomsday predictions can become a self-fulfilling prophecy and very lucrative. I think selling short a $50 billion enterprise auto manufacturer that's struggling to create a business model that's sustainably profitable, that I think is a great trade. And they weren't lying. The fact is...
It's a constant cash drain. They're highly dependent on federal government and state incentives for money. They have capital raises all the time. Even the high-end cars that they build now cost more to build than they're able to sell them for. I think they're doomed. Musk started sending company-wide emails reminding workers that they needed to stay on schedule. Here's Doug Field. I went from being pretty confident in...
all the things that had to be done to get the vehicle to be right to like, holy crap, this thing is a monster. And I think the whole company realized that as well, like this is a monster like we've never seen and it's the survival of Tesla. Coming up, Tesla gets back to the basics. We got it wrong and we were out of time.
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On September 28th, the Global Citizen Festival will gather thousands of people who took action to end extreme poverty. Watch Post Malone, Doja Cat, Lisa, Jelly Roll, and Raul Alejandro as they take the stage with world leaders and activists to defeat poverty, defend the planet, and demand equity. Download the Global Citizen app to watch live. Learn more at globalcitizen.org.com.
Remember Arthur Dreesen, the guy from the music industry? In the two years since he put his name down for a Model 3, his old Honda Civic had broken down. Now he was stuck taking Ubers and asking friends for rides. Until he finally got the email. And it said, hey, your Model 3 is going to be ready for delivery within the next week. Dreesen tapped his entire crew to help him savor this moment. We're all...
broke upper 20 kids, you know. We all packed in one of my buddy's trucks and it was a party. It was like, what are we doing today? We're going to go get Art Stasla. And then we spent the next five hours driving around LA, going through the canyons above Malibu, stopping at a few superchargers and, you know, all taking turns driving it. And we all felt like we had made it. You know, there was just this feeling that, okay, life is good and we've reached the next step.
Driessen's dream, the one he thought was so far out of reach, had finally come true. He owned the coolest car in America. A two-year wait had been a small price to pay. But Tesla's problems were far from over. Two years after announcing the EV that would change everything, everything had not changed. Tesla was still behind on production and could only get its cars to some lucky customers. And it was nowhere near its original promise to reinvent how cars are made.
The pioneering electric car company Tesla has suffered a series of very public challenges since the beginning of this year. Its high-profile CEO, Elon Musk, calls this period a production hell. Around the same time that Driessen picked up his Tesla, Elon Musk allowed a TV crew into his factory for the first time.
Elon, part of the thing I heard about the Model 3 is that there's too many robots that maybe... Yeah, yeah, I agree. You think so too? That maybe you need more people in here working? We do. In some cases, the robots actually slow the production, right? Yes, they do. We had this crazy complex network of conveyor belts and it was not working. But Musk ended the interview on a positive note. At this point, I can have a clear understanding of the path out of hell. After this interview aired, Musk tweeted... Excessive automation at Tesla was a mistake.
To be precise, my mistake. Humans are underrated. By the way, this is not actually Elon Musk. I'm an AI reading his tweets. We got it wrong. And we were out of time. And the only thing they could do now was make cars the old-fashioned way in Fremont. Doug Field, who'd been tasked with carrying out Musk's vision of a highly automated three-dimensional assembly line, was now getting new orders.
We're going to rip the thing apart if we have to. We're going to get it running. So it went from a little bit more of an idealistic endeavor to, I mean, like hand-to-hand combat. And, you know, the reality was a bunch of the things that got fixed ultimately got fixed by just tearing out.
parts of the design. Meanwhile, the Gigafactory in Nevada was finally cranking out parts, a huge accomplishment, but robots weren't doing all the work. Ryan Mousert. So we would literally have assembly lines of dozens of people just assembling components by hand to get some initial product out the door while another group of us worked on getting the automated lines running. It felt like a setback.
Elena Fulks joined in 2018. When I got there, it was more, okay, let's start with humans. She had a front row seat to Tesla getting back to the basics. Tesla, I'm raising some eyebrows again, but this time it is because of a huge tent built outside of the company's factory in Fremont. So yes, it is safe to assume a giant tent now houses the new general assembly line for the Model 3s. It turns out that the answer to not enough space was just to get more space.
Maybe not in the form of an expensive new factory, but just a tent to house a good old-fashioned assembly line. And you ended up with configuring that production with a lot more space and a lot more people so that you can design the line to work. That was the secret to Model 3 production scaling, period, end of story.
Yesterday, the official word came from Elon Musk. He sent an employee email and in that email, if you look closely at the bottom there, that's a Model 3 and it says 5,000th on it. In July of 2018, Tesla had finally reached its goal of producing 5,000 cars a week. In that email though, Phil, what I thought was interesting was that Elon said, I think we just became a real car company. A real car company. A company that could hit a production goal.
a car to place Tesla firmly in the mainstream. And new owners like Arthur Driessen loved it. Before I picked up my Model 3, I had never actually been inside a Tesla. I felt like I was in the future. Tesla didn't exactly hit all of its goals, though. It had some quality control issues that sort of slipped under the radar. And Driessen ended up paying $60,000 for his Model 3. Well, of course, it'll be $35,000. Yay!
Over the next few years, the price of the Model 3 would drop. Not quite to that $35,000 mark, but something a whole lot closer. And then there was that other goal: to reimagine the way cars are made. We can pour one out for the alien dreadnought, but Tesla did do something extraordinary at the Gigafactory. It created a single stop for EV battery and powertrain production. That just hadn't been done before, and to this day, it remains one of Tesla's greatest advantages.
And a couple years after Driessen got his car, something else happened. They've achieved a sort of a volume breakthrough. I think what's happening is the Model 3, after a relatively slow start,
It's finally accelerating. Some of Tesla's biggest critics, guys like Bob Lutz, admitted that the company was on to something. They kind of had to. In 2020, the Model 3 became one of the best-selling cars, not just of EVs, but of all cars in the world. And Tesla? It became the world's most valuable car company.
Federal tax credits were helping to incentivize EV purchases. But the Model 3 proved there was a big market for EVs, a market that traditional carmakers had been ignoring and no longer could. Tesla obviously had the playing field all to themselves for quite some time because
The OEMs just had their eyes closed. By the way, OEM is just jargon for old school car companies. But what's important here is who's talking. Bill Ford. Yes, that Ford. Noted Nepo baby and executive chairman of Ford Motor Company, Bill Ford. And now, though, I feel like we are not only in the fight, but we are in the fight to win. Ford made their first all-electric SUV a Mustang.
And by 2021, almost every major automaker had big plans to go electric. The vehicles are all electric. The feeling is all Mercedes. The choice is all yours. Ford, Mercedes, General Motors. From Bolt to Blazer, Equinox to Silverado, Chevy EPs are for everyone, everywhere.
The oldest car companies around were now promising that by 2035 they would no longer even be making gas-powered cars. We're really on a mission at Ford to lead an electric and digital revolution for many, not few. And the one to beat? Tesla. Take that, Elon Musk. We'll spend the rest of the season exploring whether Tesla can become the number one car company in the world.
And we'll look at other ways Tesla has sparked change in the industry, for better or worse. I'll be joined by my co-host, Patrick George, another longtime auto journalist. Next week, we're going to hear from the two guys who first started Tesla. And no, it's probably not who you're thinking. It was a pretty radical idea, you know, a new car company. I had been in the back of my head thinking about this company and thinking about names and the idea of Tesla came to me. Well,
We'll also hear how those guys got pushed out by the guy who you probably are thinking of, the guy who's now synonymous with the Tesla brand. Elon Musk is very much about Elon Musk. And there's like a real need for control that shows up in his companies where he needs to be in charge all of the time.
Land of the Giants, the Tesla shockwave is produced by the Vox Media Podcast Network in partnership with our colleagues at The Verge. This episode included clips from the documentary, The Revenge of the Electric Car, the podcast Cars and Culture with Jason Stein and CNBC.
This episode was produced by Charlotte Silver. Zach Mack is our showrunner and senior producer. Jolie Myers is our editor. Sarah Craig is our fact checker. Brandon McFarlane mixed and scored this episode. Andy Hawkins is transportation editor at The Verge. Nishat Kurwa is our executive producer. I'm Tamara Warren. And I'm Patrick George. If you liked this episode, give us a follow and tell a friend. And follow us to hear our next episode when it drops.
