Tesla–A different mix of employees compared to other car companies.

Elon Musk, the savvy CEO of Tesla Motor, has recently posted on Twitter his need for “hard-core software engineers” to work at his company.  His electric-car company is looking to add thousands of employees in coming years.  The company is in a major development effort to write software needed for its future autonomous vehicles.

Tesla’s effort, known as Autopilot, is causing it to add employees faster than typical auto makers with such small volume.  Mr. Musk’s strategy is founded in developing this capability in-house rather than relying on outside firms.  In addition, to the major software development effort, Tesla makes cars and all the major components in plants located in southern California that were once owned by Toyota, General Motors and Solyndra.  Tesla even makes seats in an in-house production facility, something that is not common in the auto industry as other automobile manufacturers normally outsource this.

All of this in-house capability has resulted in Tesla’s ratio of employees to vehicle production to be be high compared to competitive luxury car makers.  Jaguar Land Rover recently was expected to sell about 500,000 vehicles and has 36,000 employees, a ratio of 13.8 vehicles per employees.  In comparison, Tesla is looking to sell 52,000 vehicles and employees about 14,000, a ratio of 3.7 vehicles per employee. 

Tesla is expecting much higher sales in the future.  The higher sales expectation combined with a strategy of keeping functions in-house makes Tesla appear much less efficient that competitors. 

This entry was posted in Cost, Labor Productivity, Manufacturing, Outsourcing. Bookmark the permalink.

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