In today’s Q1 results, Tesla announced that they will add “nearly 100” sales, delivery and service locations globally over the next year, which is a 30% increase from their current physical footprint. In addition to their recent plan to expand the Tesla-certified body shop network, Tesla also plans to open their own Tesla-owned body shops in an attempt to add consistency to the customer experience with out-of-warranty body repairs.
Another goal of Tesla’s is to add 100 “Tesla Mobile Service” repair trucks next quarter alone. The mobile repair service helps streamline Tesla’s repair process, because most repairs can be done by a single technician without taking up valuable space and time on vehicle lifts in a shop. It’s also more convenient for customers, because they don’t need to schedule a time to come in to the service center for a repair, just have a mobile tech come out and meet them at home or work.
In addition to adding more locations, Tesla is focusing on efficiency for the physical locations they already have. Over the last quarter by proactively addressing issues with cars through remote diagnostics, allowing the company to catch problems before they get worse, they have already reduced repair times by 35% over the course of the last year. Tesla’s goal is to reduce repair times even further from here. The aforementioned mobile repair trucks should help them in this goal.
And this efficiency expansion isn’t just for service, it’s also for sales. Recently Tesla ended “door-to-door” sales for SolarCity/Tesla Energy products, and have been testing sales of Tesla Energy products in their retail locations. This resulted in a 50-100% sales productivity improvement relative to the best non-Tesla retail locations. One of the criticisms of the SolarCity merger was that their cost of sales was particularly high, and Tesla would be taking on a large, inefficient sales organization, but they seem to be making significant progress and changes on that front which should relieve any shareholders who are still reticent.
This is all good news for current Tesla owners, as many have been worried that the Model 3, which will represent a few hundred percent increase in sales for Tesla, would result in overcrowded service centers and possibly even longer wait times for service. Tesla has already been struggling with wait times for service in some locations, so this is a valid concern. But given Tesla’s three-pronged approach of adding locations, deploying mobile trucks and increasing efficiency across the board, they stand some hope of keeping up with demand.
Nevertheless, there is still some room for worry – an increase in 30% in locations and 35% in efficiency are both significant, but when sales are already increasing at 50-60% per year and are poised to increase by at least another 250% next year, it seems there’s a chance that Tesla will continue to play catch-up with the massive demand for their products. But rest assured they at least see the issue coming, and are working proactively to solve it before it becomes a problem.
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