Former Audi head of production: “Tesla is 7 years ahead”

Manufacturing Leadership Cover October 2016

How is it after two decades to move from a traditional car manufacturer to a company that disrupts the car industry? That’s what Peter Hochholdinger, new VP of Production at Tesla, told the Manufacturing Leadership Journal.

Last year Tesla built a bit over 50,000 vehicles, and this year the numbers will double. Still not enough to build the targeted 500,000 Model 3 per year. For production ramp up investments of 2.25 Billion Dollars are set aside. This difficult task is now Peter Hochholdinger’s task. He headed production at Audi for the Models A4, A5, and Q5.

Answering the questions of the interviewer, he right away states that

“The cars we build are about seven years beyond everything I’ve seen before [..]”

While other vendors still bet on internal combustion engines, Tesla is different. Tesla only produces fully electrical vehicles. of course there are aggressive targets to reach, but that’s the case in every company he had worked before. A step to reach higher production number is by increasing the density on the factory floor, by shortening the distances between each production step. Also the throughput is currently rather slow, so full automation needs to kick in to speed that up

Tesla’s culture is that of a startup blended with a traditional car manufacturer.

“It’s like a hybrid; it has both inside, both souls.”

He sees as an advantage that the company is located in Silicon Valley. People think out-of-the-box and quickly try new things. He himself comes from a region in Europe with a lot of car manufacturing. Here it is different and you can feel the difference. The teams think differently. The ask basic questions, such as “Why does a (paint shop or a body shop) like like that. Can we change it? Is there a different way?”

He also comments on a topic that lively discussed in German: Industry 4.0. He thinks that we have to advance it.

“[..] when you have a machine that makes a machine, you have to have a smart machine that makes the machine, otherwise, it’s of no use.”

With the data we can simulate factories much better and optimize them. The most pressing problem is to better integrate the supply chain. The parts have to be at the right place at the right time. Quality control is important too. A smart factory needs to be supplemented by a smart logistics chain, like at an airport. There you always know where the planes are and at what time they will be at the gate. The same needs to be true with trucks that deliver parts.

His most important experiences that he brings from his time at Audi is that production and logistics need to be integrated and play together.

Tesla is different in other areas as well. Tesla sees the

“Factory as a machine that builds a machine.”

Today’s factories are very labor intensive and designed for manual labor. At Tesla the design starts with thinking how a production step can be done by a robot. For Hochholdinger Tesla is the first manufacturer that thinks that way, a way of thinking that he hasn’t encountered at other manufacturers.

His summary is:

“Creativity is thinking u new things. Innovation is doing new things. Manufacturing is creating new things or building new things. All of those three together, that’s Tesla in my opinion because we are very creative, very innovative, and we are driving manufacturing forward.”

The full interview can be found in the Manufacturing Leadership Journal.

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