Tesla gave us technology on wheels, so how come it forgot to include service centers? | John Naughton
Jhe first thing you learn from buying a Tesla, as this columnist did in December 2020, is that the neighbors immediately begin to hold Elon Musk personally responsible for it. The company’s co-founder and now supreme leader is, we find, widely regarded by non-techies as a fruitcake with a bad Twitter habit, so it follows that anyone who buys one of his cars must be a follower of the richest in the world. crazy and therefore not properly grounded.
Interestingly, there was a time, not too long ago, in 2005 to be precise, that this view of Musk was shared by sensible German men in suits, who scoffed at the idea of this fool building automobiles. Didn’t he know that making cars is hard and that BMW, Mercedes, Ford, General Motors, Volkswagen, Toyota and the rest had spent the better part of a century figuring out how to do it profitably at scale? Sure, he might be able to produce expensive toys for Silicon Valley types – but real cars?
The industry’s paltry skepticism reminds me of 2007, when Apple launched the iPhone. This was at a time when Nokia and Blackberry dominated the world and the mobile phone market was considered “mature”. Yet here’s Steve Jobs in his black turtleneck — a guy with no experience in the mobile industry — touting a phone without a keyboard and a battery that users couldn’t replace.
Well, we know how this story unfolded. Nokia and company failed to notice that what Jobs had created was a powerful networked computer that fit in the hand and could also make phone calls. Ultimately, this phone upended – and transformed – a “mature” industry.
What’s interesting is that with Tesla, history seems to have repeated itself. The company built nearly a million cars last year and sold them all. There seems to be a waiting list for every car they’re building right now. And just as Nokia, a hardware company that didn’t understand software, was gutted by the smartphone, the Ice (internal combustion engine) boys were overwhelmed by Tesla. They thought electric vehicles should just be cars with electric motors; Musk’s idea was that they should be software on wheels. That’s why all electric vehicles are now like Teslas – giant skateboards with wheels on all four corners.
But Musk didn’t just reinvent the car. He also sought to reinvent the industry. Teslas would not be sold through dealerships but directly to customers. Instead, there would be a small number of corporate “service” centers, as well as flying teams of technicians who could provide assistance if needed. The reason for this was that electric vehicles are much less complicated than ice creams and require much less maintenance. No pesky dealerships or their oil-soaked mechanics needed. CQFD.
Now, it’s undeniable that electric vehicles require less routine maintenance than conventional automobiles, with their volatile fluids, controlled explosions, and hot gases. But cars, no matter how well made, always develop faults or malfunctions. And one of the problems with Teslas from the start is that their build quality – say flimsy paintwork or the way the body panels fit together, for example – left something to be desired at times and certainly wouldn’t pass on a BMW production line.
In the Ice Age, if the car you bought has any flaws or issues, you talk to the dealership about it. But for Tesla owners, there is no dealership, just Musk’s corporate empire. And it turns out, for some frustrated drivers, that empire might as well be on Mars. In the United States, the Federal Trade Commission has received more than a thousand complaints about poor service. A trawl from Trustpilot or Reddit reveals the frustrations of Tesla owners who love their cars but are disappointed with service outages.
If you are charitable, you could explain this as growing pains. After all, it’s a company that’s grown like crazy – from producing 35,000 cars in 2014 to 930,422 in 2021. But the number of its service centers hasn’t grown in proportion to that growth. In the first quarter of this year, for example, Tesla’s US production increased by 68% compared to the same quarter last year, but the number of service centers only increased by 20%. The company has only 30 in the UK and 160 in the US, a country where an Ice company can have up to 10,000 dealerships nationwide.
A less charitable explanation is that Tesla, like all tech companies, subscribes to the pernicious delusion that employing humans to do customer service is a dumb analog idea when most of those functions can supposedly be handled by AI or at least by a call center. In this sense, the difficulties encountered by Tesla owners when trying to obtain help or repairs are more like those encountered by Facebook users trying to access the account of a deceased relative or, as I recounted this last week, a Google user trying to get his account restored after an erroneous cancellation. Tesla is a technology company that manufactures cars.
what i read
money never sleeps
The economist who knows that the miracle is over is very nice Atlantic Annie Lowrey’s piece on Brad DeLong and his long duration history of capitalism.
Business strategist Rob Miller asks in a nice essay on his Roblog platform titled Cultivating Serendipity if it’s possible to organize your life in a way that maximizes the chances of happy accidents.
sense of the horse
TikTok: Trojan Stallion is a sobering blog post by marketing professor Scott Galloway on his No Mercy/No Malice website.