Tesla (TSLA) makes massive push for service to catch up with sales

Tesla has told staff that it is preparing a massive push to expand service capacity as it attempts to catch up to its rapid growth in sales.

Over the last few years, Tesla has been growing at a ferocious pace with deliveries and production capacity seeing important increases.

Now the Tesla customer fleet has reached over 1 million cars.

Unlike most other automakers who rely on third-party franchise dealers to provide service to customers, Tesla owns its entire global service infrastructure, which it is trying to ramp up alongside sales and production.

In recent years, it hasn’t been able to keep up with Tesla’s growth.

Over the last 12 months, Tesla’s deliveries grew almost 50% year-over-year — adding over a half million vehicles to its fleet.

But over the same period of time, Tesla’s service centers grew by only 12% and its mobile service fleet by 8%.

Last year, Tesla made several statements about expanding service after CEO Elon Musk admitted a “foolish oversight” of Tesla’s service coverage and plans to open many more service centers around the world.

Things moved slowly, but they started to ramp up last quarter with Tesla adding 20 new service centers in just a few months.

A source familiar with the matter told Electrek that Tesla communicated to its staff that it plans to significantly ramp up service over the next year with at least one new service center opening per week in 2021.

It means that Tesla plans to add over 52 new service centers in 2021.

Tesla currently operates 466 service centers around the world.

Tesla president of automotive, Jerome Guillen, has also recently stated that he is on the lookout for real estate that the company can quickly turn into Tesla service centers.

We recently reported on Tesla looking for real estate in the Northeast to “open lots of service centers.”

The new service centers are going to be located where Tesla is seeing strong demand for its vehicles and where they see service-center capacity already lacking.

New service centers also create more demand for Tesla.

Musk has previously said that Tesla has found expanding service centers, and the Supercharger network are Tesla’s two best ways to bring in more customers.

Electrek’s Take

This is good news. Service delays are a recurring complaint from Tesla owners in some markets where Tesla never seems to catch up to growing sales.

Here in Quebec, service centers are sometimes booked weeks if not a full month ahead of time, but they recently opened a massive new service center in Laval, which is likely to help with the service capacity in the greater Montreal region.

On top of expansion in markets lacking a service center altogether, there are many markets in the same situation that need a new location to help lower the demand on existing locations.

Let’s hope that Tesla delivers on this goal of a new center every week next year. Tesla owners are going to need it if Tesla delivers what is expected to be ~800,000 new cars next year.

That will push Tesla’s fleet to more than 2 million vehicles — meaning that the fleet will have doubled over less than two years.