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Elon Musk’s plan to fix Tesla’s troubled service operation isn’t working, according to nearly 5,000 Model 3 owners — but there’s one big exception (TSLA)

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Elon Musk’s plan to fix Tesla’s troubled service operation isn’t working, according to nearly 5,000 Model 3 owners — but there’s one big exception (TSLA)

Category : entrepreneur

  • Tesla CEO Elon Musk’s plan to fix the electric-car maker’s troubled service operation has largely failed so far, according to a Bloomberg survey of almost 5,000 Model 3 sedan owners.
  • Survey respondents have reported greater rates of dissatisfaction with the speed and quality of vehicle repairs since the beginning of 2018, while waiting longer for service appointments.
  • Collision repair has been a rare bright spot for Tesla, as reported wait times for replacement parts have dropped dramatically.
  • And the number of service appointments Model 3 owners have needed has plummeted, from 61 service appointments per 100 vehicles in January 2018 to 10 in September, a trend Bloomberg attributed to improved manufacturing quality.
  • Visit Business Insider’s homepage for more stories.

Tesla CEO Elon Musk’s plan to fix the electric-car maker’s troubled service operation has largely failed so far, according to a Bloomberg survey of almost 5,000 Model 3 sedan owners.

In January, Musk said improving its service operation in North America was his “number one” priority for the beginning of the year. But survey respondents have reported greater rates of dissatisfaction with the speed and quality of vehicle repairs since the beginning of 2018, while waiting longer for service appointments. Collision repair has been a rare bright spot for Tesla, as reported wait times for replacement parts have dropped dramatically.

Tesla did not immediately respond to Business Insider’s request for comment.

Poor service could hurt Tesla’s sales growth

Unlike other automakers, Tesla owns and operates its own service centers. Poor service could hamper Tesla’s efforts to expand beyond the luxury market and reach mass-market customers, a plan that has hinged on the Model 3, Tesla’s most affordable vehicle to date (it starts at just under $40,000). As Tesla reaches more customers who don’t have a preexisting affection for the brand, the details of the ownership experience will matter more. The fact that Tesla relies on word-of-mouth, rather than advertising, to acquire new customers could only amplify that dynamic.

So far, Tesla’s service issues don’t appear to have impeded sales growth, as the company has set sales records in four of the past five quarters. But its rate of sales growth has slowed, and even declined in the US.

Around 20% of the owners surveyed by Bloomberg who had service performed on their vehicle reported being dissatisfied with the speed and effectiveness of repairs during the third quarter of this year, more than double the rates reported during the first quarter of 2018, when 7% said they were unhappy with repair speed and 6% said they were unhappy with repair quality. Dissatisfaction rates have mostly grown since the beginning of 2018, the earliest period covered by Bloomberg’s survey.

Wait times to get an appointment have also risen, with a third of respondents saying they had to wait over 10 days for an appointment during the third quarter of this year, up from 6% during the first quarter of 2018.

Tesla has shown significant improvement in some areas

Tesla has shown significant improvement in reducing wait times for parts needed for collision repairs, which are mostly performed by third-party body shops. Customers said it took an average of 32 days for their body shop to receive the parts needed for their repair from Tesla during the first quarter of 2018, a number that fell to 13 days during the third quarter of this year. 

And the number of service appointments Model 3 owners have needed has plummeted, from 61 appointments per 100 vehicles in January 2018 to 10 in September, a trend Bloomberg attributed to improved manufacturing quality. Musk has said “the best service is no service,” and continuing to reduce the need for service appointments could dull the impact of increasing dissatisfaction with Tesla’s service centers.

Respondents gave Tesla’s service centers an average rating of 4.25 points out of 5. That rating was higher in North America (4.32) and lower in Europe and Asia (3.76), where Tesla began selling the Model 3 this year.

Tesla’s mobile service fleet, which can drive to a customer’s home or workplace to perform minor repairs, received a score of 4.78. The company has rapidly expanded its mobile fleet in recent quarters, with the goal of having it take on a greater percentage of repairs.

Read Bloomberg’s full survey here.

Are you a current or former Tesla employee? Do you have an opinion about what it’s like to work there? Contact this reporter at mmatousek@businessinsider.com. You can ask for more secure methods of communication, like Signal or ProtonMail, by email or Twitter direct message.

  • Read more:
  • Tesla is fixing its notorious quality issues, according to nearly 5,000 Model 3 owners
  • Elon Musk said he wishes Tesla’s Model 3 were cheaper, even though customers weren’t that interested in its least expensive version
  • The future of Elon Musk’s empire was in peril in 2016, and new documents reveal more about the desperate plan to save it
  • Jaden Smith asked Elon Musk for advice on starting a company. Musk was shocked when Smith said he wanted to sell water.
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About Author

Sammy Singh

Global VC, Founder, and entrepreneur extraordinaire as featured in Inc. Magazine, Bloomberg, and Forbes. Sammy Singh is a graduate of UCLA and Wharton School of Business as well as a former student of Loyola University of Chicago. Sammy is best known as a renowned financial technology global entrepreneur and has founded over 26 different firms across industry and all over the world. He is a venture capitalist,a TV/ Film actor, tax specialist, and marketing solutions strategist. Connect with Sammy Singh on social media below! www.linkedin.com/in/cfo www.instagram.com/champagnegqpapi www.facebook.com/officialsammysingh www.twitter.com/cxosynergy www.medium.com/@sammysingh www.crunchbase.com/sammysingh

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