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COMING UP:Share Opener Variant 4

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Transcript

00:00:01
>> When you talk about a Tesla, you probably aren't talking about their seats but CEO Elon Musk takes his cushions seriously. And to him the model X SUV seats were a mess. An outside contractor was having trouble executing the complicated design, which led to plenty of frustration and finger pointing.
00:00:20
So Musk in 2015, made the call. Tesla would build the seats itself. Now as the electric car maker faces bottlenecks in the production of the Model 3, some analysts question whether trying to do so much in-house is causing problems. Reuters correspondent Alexandria Sage.>> While nobody is saying that seats are behind today's production bottlenecks, some industry experts say that the production problems that Tesla has are exacerbated by its desire to control everything.
00:00:52
Tesla is highly vertically integrated. That means that it has its hand in everything from parts, making parts, all the way to selling cars directly to consumers.>> That's different from many of the traditional giant automakers that rely more heavily on a web of suppliers and distributors. For Tesla, seats are only part of it.
00:01:15
Many other processes are brought in-house. The company has sunk $2 billion into a sprawling Nevada battery factory, and in-house programmers designed the bulk of the software that runs the Model 3. But seats have caused their share of problems. The electric car maker has issued four seating related recalls since 2013.
00:01:35
>> Assembling seats is a complex and very labor intensive enterprise that most companies choose to have someone else do. They have brought seat assembly in-house to their Fremont factory, in a choice that some industry experts are questioning.>> And a lot is riding on Tesla's ability to scale up operations quickly.
00:01:57
Tesla declined to talk about its seat assembly efforts, but the company is expected to reveal more about its production issues on November 1st, when it announces its latest earnings' results.