Consumer discretionary

Tesla Motors Service Delays Have Little Or No Effect On The Brand

Pinterest LinkedIn Tumblr

Tesla Motors Inc (NASDAQ:TSLA) is gradually learning how to get more vehicles on the roads by accelerating its production rate at the Tesla Factory at Fremont, CA. However, its expansion of service centers is not up to pace with the increasing numbers of deliveries, causing frustration for new owners.

Earlier this week, Automotive News published a report which stated that delays in service appointments are expected to increase for the Model S and Model X owners. The publication quoted a Model X owner who previously had a Model S, saying that his local service center could not give an appointment before 10 days. He further added that it is “a long time for a $130,000 car.” He said that the company immediately fixed every issue when he had the Model S.

“Now that the company has grown, service has become a problem,” said Ethan Shapiro from Florida. Previously, he had to wait about a week to get the SUV’s fault door latch fixed.

Chris Terry, another Tesla owner from Denver, reported in August that he had to wait for five weeks before the service station could repair the windshield of his Model S. Although Tesla agreed to fix the issue for free, Mr. Terry’s problem has not been solved.

Tesla currently has 61 service centers in the US with 10 locations “coming soon.” In 3QFY16 Shareholder Letter, Tesla said that they opened 17 new locations in the period while delivering 24,821 cars worldwide. Thus, it is clear that the company is unable to keep up its service with deliveries growth.

The problem may accelerate as it plans to bring another 25,000 vehicles on the road in this quarter and over 600,000 cars in 2017 and 2018. Interestingly, Tesla said that it saw a 92% reduction in reliability issues in 2016 compared to 2015.

Despite such poor servicing of vehicles, Blue Book’s Karl Brauer believes that there has not been a big effect on the Tesla brand as early owners are not completely dependent on their Model S sedans and Model X SUVs. Dunne Automotive President, Michael Dunne, believes that the owners are well aware of such issues before buying a Tesla car as they know “they are part of this experience of the first breakthrough electric vehicles.”

Comments are closed.