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Wednesday, January 30, 2019

Tesla aims to double service capacity, reduce customers' wait for repairs

Tesla has faced complaints on social media about the long wait times customers face before they can book appointments and get their cars fixed. The company just provided some insight into the problem.

In its earnings report Wednesday, Tesla revealed that it was operating only 378 service centers around the world at the end of 2018, with a fleet of 411 mobile service vehicles in circulation. The company sold 140,000 Model 3 sedans last year.

The challenge of providing great customer service is becoming a bigger deal as Model 3s are sold in higher volumes worldwide and Model S and X electric cars age in the field. Tesla said in the shareholder update that it aims to deliver 360,000 to 400,000 vehicles in 2019, a number that could overwhelm existing service capacity.

Unlike other car companies, Tesla runs its own service business and doesn't give outside mechanics access to its diagnostic tools. The company has sometimes been slow to deliver spare parts to both its own service centers and non-Tesla shops.

On an earnings call, Tesla executives said they would stock more spare parts at services centers to address this issue. Specifically, the company plans to stock front and rear fascia in common colors, so they can fix bodywork issues in 15 to 20 minutes.

Tesla also talked up its "Rangers," mobile service that sends mechanics to the customers' home to repair their cars off-site. Tesla's website says that 80 percent of repairs can be taken care of through this service, and so the company doesn't need to invest solely in brick-and-mortar service centers to ramp up its service.

"We see upgrading our service capacity and improving customer service as a top priority at the moment," the company said on Wednesday. "Where needed, our service centers are moving to two-shift operations in order to double service capacity quickly, and we are simplifying processes in order to increase service throughput."

Tesla also said that it's changing its "parts distribution approach to ensure that spare parts are available in a timely manner at all our service centers globally." But the company didn't provide any specifics.

"Service and Other" business at Tesla-- including used car and merchandise sales-- operated at a negative gross margin of 26 percent in the fourth quarter of 2018, a loss that represented an improvement over the prior quarter.

WATCH: Tesla owner grew so frustrated, he now repairs his own model S and says it's as easy as Legos.

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from Top News & Analysis https://cnb.cx/2GcbVHD

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