Chapter 74: Hot and Cold: Twitter, April–June 2022

This chapter covers Tesla's manufacturing strategy and two major achievements: the successful acquisition and transformation of the Fremont factory (2010–2012), and the conception of the Nevada Gigafactory (2013). Musk's obsessive control over both product design and manufacturing enabled Tesla to innovate rapidly, culminate in the Model S earning Motor Trend's Car of the Year award, and laid groundwork for scaling battery production.

Musk departed from the trend of American companies offshoring manufacturing by insisting on tight control of Tesla's production. Unlike Steve Jobs, who outsourced manufacturing, Musk applied his obsessive attention to the underlying science, engineering, and factory design itself—viewing "the machine that builds the machine" as equally important as the product. In May 2010, he acquired Toyota's mothballed Fremont, California factory for $42 million (down from $1 billion) and secured a $50 million investment from Toyota. Musk redesigned the facility by positioning engineer cubicles on the assembly line's edge so designers would immediately see consequences of their work, and he placed his own desk in the center with no walls. Tesla's June 2010 IPO raised $266 million as the stock surged 40 percent. When the first Model S rolled off the Fremont line in June 2012, Musk rejected the initial quality, firing three production quality chiefs in succession and recruiting designer Franz von Holzhausen to move to Fremont for a year. Musk and von Holzhausen walked assembly lines multiple nights weekly, focusing on root causes. By year-end 2012, Motor Trend named the Model S its Car of the Year—the first award ever given to an electric vehicle. In 2013, Musk and battery co-founder JB Straubel conceived an audacious plan: build a gigafactory producing more batteries than all existing factories combined to supply Tesla's Model X and Model 3. After initially hesitant Panasonic executives were persuaded through a display of bulldozers and construction preparation near Reno, Nevada, Musk charmed Panasonic's new president Kazuhiro Tsuga at a formal dinner in Japan with a vision of joint transformation toward electric vehicles. Tsuga agreed to a 40 percent partnership in the $5 billion facility.