The man who assembled Tesla's supply base

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DETROIT — Peter Carlsson was a Swedish purchasing executive in cellphones and computer chips before taking over procurement and supply chain management for Tesla Motors in 2011. Carlsson, 46, assembled the supply chains to launch Tesla’s Model S and Model X, taking the San Francisco Bay automaker into robust production before leaving in late 2015 to start a battery company. Carlsson spoke with News Editor Lindsay Chappell last week during the annual KPMG Automotive Executive Forum here.

Q: What was the biggest challenge of creating Tesla’s supply chain?

A: In those first years, we didn’t have the relationships nor the history of volumes with a large number of suppliers. We couldn’t always get the capacity commitments we needed. We had to earn their trust that we were going to do what we said we would.

How hard was it to recruit parts manufacturers to California, where Tesla was the only auto customer?

Choosing Fremont as the manufacturing plant for Model S was a choice between being really close to engineering but far from the big automotive supplier clusters. I think we made the right choice, due to how early we were in the technology cycle and the amount of engineering changes we executed. But it clearly added logistics cost and complexity.

You’ve left as Tesla prepares to launch the higher-volume Model 3. But what is the supply chain’s outlook?

Things will get a bit easier. Tesla has resolved some issues through vertical integration — doing things internally. And with the launch of the Model 3, the volumes of the business will be more attractive, and I think we will see more suppliers relocate.

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