The State of Michigan prevents Tesla from setting up any service centers and employing Michigan residents to fill them. Tesla must send cars to Ohio for repair, to the delight of Ohio residents and state government – they get the jobs and the tax revenue!
By Joe Rabin, Smarter Analyst
On Tuesday, Tesla Inc (NASDAQ:TSLA) announced plans to overhaul its customer service by setting up 100 service centers, rolling out 350 mobile service vans and hiring 1,400 technicians. The move comes in response to the company’s growing customer base and in preparation of its upcoming Model 3 sedan release. New service stations and vans will be strategically placed in cities around the US, corresponding to the highest number of pre-orders.
The Model 3, starting only at $35,000 has already garnered much interest with an impressive 373,000 pre-orders, as of May 2016. This represents a dramatic growth of 78% from the 84,000 cars Tesla sold last year. Current models include luxury brands like the Roadster, Model S, and Model X, which have competed nicely on the mass market.
With production of the Model 3 in full swing and with expectations for the company to hit 20,000 cars per month by December, Tesla CEO Elon Musk noted the urgency of adding service centers and mobile vans for customers who live too far from a service center. In fact, new service centers will maintain up to 40 repair lines, while mobile vans will visit customer’s homes and offices. As an additional perk, out of the Uber playbook, the vans will feature snacks, espresso machines, and even children’s entertainment. Most appointments via mobile units are handled within an hour.
Musk stressed that unlike traditional dealerships, Tesla repair services are not a money maker. According to findings by the National Automobile Dealers Association, dealers across the US raked in around $110 billion in service and parts sales last year alone. In contrast, Tesla models are electric by nature and do not require the same work and material intensive services as do gasoline-powered cars. Furthermore, 80% of repairs on the electric cars can be done without the use of a lift, which also saves time and money.
In response to long-standing complaints about wait time, customers will be happy to know that Tesla has also improved service time through expanding its mobile support. Tesla service is on the cutting technological edge by utilizing IoT (Internet of Things). The company facilitates the filing of electronic paperwork for its clientele and allows technicians to solve problems faster by finding glitches through wireless diagnoses. Most importantly, the company has worked hard to learn from past recalls that pertained to seat belt latch issues and parking brake failures. Moving forward, the company plans on producing 500,000 vehicles over the course of 2018.