Melissa Schilling notes that, despite extensive automation (video below), labor usage is quite high. “There are 3000 workers in the plant, and Tesla produced a little over 20,000 cars in 2013. That’s about 7 cars per worker in a year (assuming the workers are full time). However, the GM Lordstown plant made 70 cars per worker last year (thanks Linos Jacovides for this stat), and in the well-known Renault-Nissan HBS case it reports that Nissan’s productivity was 101 cars/worker/year, and Renault’s was 77 cars/worker/year.” Given the automation, the workers are probably highly skilled (and, thus, well paid). Is Tesla at a huge economies of scale disadvantage? What might be the strategy? They are still 3 years away from selling a cheaper model so it will be a while before they can generate volume from a mid-market product. In the meantime, one possible solution may be found in Chinese sales of electric cars.

Contributed by Melissa Schilling