One of the main concerns of current and future Tesla owners is the company’s ability to scale its service operations after the Model 3 launch, which will add hundred of thousands of vehicles in Tesla’s global fleet.
The automaker is already having difficulties keeping up with service demand in some regions, but it has now announced a “reengineering and expansion” of its operations in order to prepare for Model 3.
In the past, Tesla officials have claimed that the Model 3’s simpler design will be more reliable and require less service, which will help Tesla’s network support the increased number of vehicles.
But the company is also adding capacity to its service centers. Tesla hired Kenny Handkammer, 25-year F1 veteran and former Red Bull Racing chief mechanic, to lead new service programs as Global Director of Service Innovation back in 2015 and new programs have since been introduced.
For example, Tesla launched new F1-inspired ‘fast lanes’ at service centers to curb wait times last year.
While some are still experiencing long wait times, the company claims that overall its service is improving. In the shareholders letter published yesterday, Tesla said that it is on track to reduce its average wait time for service to “less than one day by the end of the first quarter of 2017”:
“In Q4, we reduced service backlog in our busiest markets by 25%, and by year end we had increased the number of cars serviced per day by 45% since Q3’16, and by 95% since Q1’16. In fact, we are on track to reduce the global average wait time for vehicle service to less than one day by the end of the first quarter of 2017.”
Furthermore, the company claims that “more than 80% of repairs are so minor that they can be done remotely” – meaning that Tesla’s Ranger service can take care of most of the issues.
They announced that they plan on expanding this segment of their service operations:
“Ahead of the Model 3 launch, we are reengineering and expanding our operations as we anticipate the needs of a much larger family of Tesla owners. In service, since more than 80% of our repairs are so minor that they can be done remotely, we are expanding our mobile repair service that allows Tesla to make vehicle repairs at an owner’s home or office. In February, we opened a 168,000 square foot vehicle delivery center in Hong Kong; and we plan to accelerate expansion of the Supercharger network this year, starting with doubling our number of North American Supercharger locations in 2017.”
The timing of the new 168,000 square foot vehicle delivery center in Hong Kong is unfortunate since as we reported yesterday, deliveries are expected to slow down as the government slashes electric vehicle incentives that made the city a leading EV market dominated by Tesla.
Nonetheless, it will be reassuring for current Tesla owners and Model 3 reservation holders to see Tesla investing in its service network and sticking to its own model, which aims not to make a profit on service instead of going with third-party franchises.
Additionally, we recently reported that Tesla is working on opening up its service tools and helping owners repair their own cars with replacement parts, which should be helpful going forward.