Elon Musk Vows to Reduce Customer Response Times in North America

Tesla CEO Elon Musk warned customers in North America that they might face longer response times in North America due to the sharp increase in sales, but vows to mark it down as a top priority item and resolve it.

What did Elon Musk say?

“Due to a large increase in vehicle delivery volume in North America, Tesla customers may experience longer response times. Resolving this is our top priority.” – Elon Musk

Key Points

  • Tesla delivered 55,882 Model 3s, 14,645 Model S and 13,600 Model X in the first eight months of current fiscal in the United States.

  • A grand total of 84,127 units in eight months, compared to 50,147 units the electric car maker sold for the full year in 2017.

  • With four more months to go in 2018, Tesla could easily end up doubling or even tripling its 2017 sales record in the United States.

  • Service capacity is going to be stretched to the limits.

We warned our readers

Though the news might come as a surprise to many, we did warn our readers that Tesla’s service capacity, at a global level, will be brutally exposed due to surging sales.

On August 24th, we questioned, Will doubling (mobile) fleet capacity be enough for a company that could end up tripling its sales this year?

The reason for our pessimism was because Tesla’s global store and service location expansion didn’t keep pace with the growth of Tesla cars on the road.

The trend can be visually explained using two simple charts.

Tesla Number of Global Store and Service Locations
Tesla Number of Global Store and Service Locations

 

Tesla Cars on the road
Tesla Cumulative Delivery Milestone

As you can see from the two charts above, the sales chart is on an exponential growth curve while the global store and service locations chart took a slow and steady path to growth. The divergence of growth speed is certainly going to cause some bottlenecks.

That’s why we were surprised when Tesla announced in August 2018 via Twitter that the company will double its Mobile Service Fleet globally this year.

It’s the right step of-course, to increase the mobile fleet. But even doubling service capacity when the company is on an exponential growth path is just not going to be enough.

The only good news here is Elon’s tweet.

This clearly shows that the company is aware of the bottleneck – “wait times are going to increase” and its working on a plan to reduce it – “Resolving this is our top priority.”

Tesla has no choice but to stay aggressive about its service capacity or risk losing a lot of goodwill. I will go as far as to say that Tesla should prioritize service capacity over supercharging stations in North America for a short period of time.