I think this hubris is what is going to kill them (unless they , hopefully, wake-up). They couldn't admit that maybe other people made cars pretty well already and that they'd make that process even better over time.

I think they imagined themselves too much like Apple and it's attempts at automating it's production of the Mac. However, they forgot that by this point Apple/SJ had already figured out a lot of how to do assembly of computers quickly and automating a good process is much easier than figuring out a process that'll be automated.

Prior to this automation everything was done semi-manually for Model S and Model X, with huge delays, so automating whatever they had was not the next logical step. It was short sighted of them to go to automation first and it's frankly causing unneeded delays to delivering the Model 3s and volatility in the market.