Chapter 93: AI for Cars: Tesla, 2022–2023

During spring 2018, Musk launches an aggressive production surge at Tesla's Fremont factory to hit his promised target of five thousand Model 3s per week by June, facing intense skepticism from short-sellers and managing production bottlenecks through direct intervention on the factory floor. When conventional expansion proves impossible, he builds an unauthorized tent facility with gravity-powered conveyor lines and removes robots in favor of human workers, ultimately achieving the goal just before his July 1 deadline.

In early 2018, Tesla's stock became the most-shorted in history despite being valued higher than General Motors, fueling Musk's contempt for short-sellers who he believed had inside information through factory spies and drones. The Fremont factory was producing only two thousand Model 3s per week when Musk staked his reputation on reaching five thousand by end of June, ordering massive parts purchases that created cash-flow risk. He received the boldest pay package in American history, contingent on achieving aggressive targets worth up to $100 billion if successful. Beginning April 2018, Musk implemented "walk to the red," personally patrolling the factory floor and making rapid command decisions at red-light trouble spots, adjusting everything from bolt specifications to sensor sensitivity despite objections from managers concerned about safety and quality. He discovered that over-automation was slowing assembly—robotic arms struggling with window seals that humans handled easily—and declared a 72-hour deadline to remove unnecessary machines, spray-painting condemned robots with orange X marks. When short-sellers determined the two assembly lines could never reach five thousand cars per week and another factory was impossible to build in time, Musk exploited a zoning provision for "temporary vehicle repair facilities" to erect a massive tent in the parking lot with a gravity-powered conveyor system staffed by humans. On June 30, the deadline date, the factory achieved the goal, with the 5,000th Model 3 rolling off the line at 1:53 a.m. on July 1. Musk formalized the lessons into "the algorithm," a five-step production philosophy: question every requirement with named accountability; delete unnecessary parts and processes; simplify and optimize; accelerate cycle time; and automate last, accompanied by principles emphasizing hands-on management, direct challenge of colleagues' work, and maniacal urgency.