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According to Statista, TESLA is dominating the UK market for electric vehicles. However, the operating model that TESLA uses is not common in the automobile industry and in fact, their model of bringing most research and production in-house, is creating many problems at the moment. The mission of TESLA, is “to accelerate the advent of sustainable transport by bringing compelling mass market electric cars to market as soon as possible”1. Therefore, to work towards that mission, TESLA has produced what they refer to as their Model 3, which is more competitively priced than their previous models but is still too pricey for the general population. Although TESLA are moving closer to their mission, they are currently facing production problems. TESLA had hoped to produce 20,000 units by the end of the last quarter in 2017; however, they actually produced was 2,425 units2.

So, what has happened? One of the main problems relates to the bottlenecks in production. TESLA claim that main areas that are creating bottlenecks are the welding activities and the final assembly tasks. In Chapter 5, we considered issues of bottlenecks when we analysed the subject ‘Throughput Accounting’, here we analysed the concept of maximising the throughput commonly measured through completed units. However, what is important to note, in the example of TESLA, is that they are more focused on getting the quality right rather than maximising volume at the moment. Rather than pushing through the volume, they are implementing processes to retain quality and then improve production rates. So the lesson to take away from this example is that it is important to understand the company objectives and their long-term goal rather than focusing on the end number you calculate with some of the techniques management accounting has to offer. Although Throughout accounting would highlight the bottleneck areas, it would be naïve to focus on the throughput rate at this stage of the production process.

1https://www.tesla.com/blog/mission-tesla

2http://ir.tesla.com/releasedetail.cfm?ReleaseID=1053245