Model 3 Reservation Holder Survey Underlines Tesla’s Mass Market Challenge

 

They waited for reservations… will they also wait for service? (image courtesy Investors Business Daily)

Much of the critical coverage of Tesla Motors, both here at Daily Kanban and elsewhere, has focused on issues that Tesla is able to get away with as a small-volume manufacturer serving an affluent, early-adopter market segment. From manufacturing bottlenecks to quality control problems, from inconsistent, hype-happy communication to poor service, Tesla has been able to weather a storm of problems because its customers and fans are so patient with and passionate about the company. But as Tesla moves from expensive, low-volume cars to the mass market Model 3 these problems are taking on a new significance. In part this is because higher volumes increase the likelihood of quality and service problems, and in part it is because mass market customers who depend on a single car for their daily routine are more demanding than luxury car buyers who can always take the Lexus to work if their Tesla is broken.

Given Tesla’s pattern of releasing cars with insufficient testing as well as its chronic quality problems, it’s safe to assume that the Model 3 will face its fair share of issues. Thus, investing in service infrastructure that will allow Tesla to promptly and affordably repair and upgrade high volumes of Model 3 is extremely important. As Bertel has written about at Forbes, Tesla is behind the curve on those investments and it will cost billions to catch them up. Just yesterday a piece by former Tesla employee Evan Niu dramatically illustrated just how far Tesla has to go to improve its service time, which has dragged on for 8 long months in Niu’s case. Now an exclusive study of about 800 Tesla Model 3 reservation holders, EV owners and luxury brand car owners conducted last year on behalf of a major automaker and provided to Daily Kanban by an industry source, reveals why Tesla’s quality and service woes are so critical to the success or failure of the Model 3.

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EVs In Europe: Hopes Up, Sales Down

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Sales of battery electric vehicles in Western Europe fell for the fourth month in a row, an analysis of a respected European industry publication says. In August, a month in which the overall Western European new car market climbed 8%, sales of BEVs in the world’ second largest EV market behind China dropped 1.2% compared to August 2015, paid subscribers of the AID Newsletter were told. The harsh realities of EU registrations cast a shadow on the EV euphoria of the Paris motor show, once again raising the question on auto executives’ minds: “Who will buy all those EVs?” Matthias Schmidt, editor of the UK-based publication, thinks he may have the answer: Push comes to shove, OEMs might buy their own cars.

More in Forbes

Tesla Battery Swap Unused Over Busy Holiday Weekend

In response to a wide range of questions about Tesla’s battery swap program, raised primarily by Alberto Zaragoza Comendador of the blog Doubting Is Thinking, Daily Kanban has conducted an online and on-the-ground inquiry into Tesla’s battery swap program that failed to alleviate our concerns that the electric car maker’s battery swap capability exist largely as a way to maximize California ZEV credit revenue.  A four-day investigation of Tesla’s only battery swap station over the Memorial Day weekend revealed no evidence that the station is actually being used to swap customer batteries. Though our investigation did not conclusively prove that the station is not being used at all, it is yet another data point in a large and growing body of evidence indicating that Tesla is not serious about deploying battery swap as a viable option for customers.

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Dutch double dipping: EVs save taxes at home, and then again abroad

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Europe’s Netherlands used to be famous for a libertine approach to sex and drugs, recently, the country became Europe’s showcase for electric vehicles. Plugins hold a market share of around 5 percent in the country, EV Sales says. The true rate is a little lower. A lot of the (always imported) electric cars leave the low-country right after they are bought. [Continue Reading]

Norwegian EV party to end in May – Tesla already a wallflower

Out of the way!

Out of the way!

The electric party is about to be over in EV-wonderland Norway. In May, the 50,000th EV is expected to be sold in the country of just 5 million. This means the end of the extremely generous benefits Norwegian EV buyers enjoy. Politicians discuss a follow-up program, but it won’t be anywhere as princely as the current one. [Continue Reading]

Tata Motors on Bolt vs. Bolt

Like a bolt from the blue?

Like a bolt from the blue?

When TransportEvolved pointed out that Tata Motors has a five-door hatchback called “Bolt” and suggested that this might be a problem for Chevrolet’s planned Bolt EV, we thought we would reach out to the Indian automaker for comment on the matter. Today, a Tata Motors spokesman made the following statement to DailyKanban:

“Bolt is currently a brand name registered by Tata Motors for the Indian market and we are in the process of registering it for some of our key international markets as relevant. However, we do not presently anticipate any concerns about the GM vehicle as both of these products are focused on very different markets”.

GM has assiduously avoided saying what markets outside the United States it might sell the Bolt in, and has even said it may reconsider the name Bolt altogether. Losing out on the Bolt name in India may not be a deciding factor, but, depending on what other markets Tata registers the Bolt name in, this could potentially become more of an issue. Tata may not “presently anticipate any concerns” with the name-sharing, but if GM has global ambitions for Bolt it may need to reach into its bag of brands to avoid overlap with Tata’s Bolt.

Tesla’s Tough Road Ahead

The industry zeroes in on the upstart Tesla.

The industry zeroes in on the upstart Tesla.

The Tesla bears are on the march, tearing away at the startup EV maker’s still-sky-high valuation, but not because low oil prices are killing off EVs. Quite the opposite, in fact. As I explained in last week’s Bloomberg View column, falling oil prices will not kill off alt-energy drivetrains for a wide number of reasons, most importantly because it’s one of the few ways to stand out in a sea of commodified internal-combustion engine-powered cars. Though automakers could easily plan a low-efficiency product cycle in response to low oil prices, they are keeping the technological arms race going. And that is Tesla’s real challenge: not a decline in EV interest, but strong competition from established players with more experience building vehicles at scale. [Continue Reading]

Brokerage: Tesla could be sitting on 3,000 unsold cars

Model S - Picture courtesy slashgear

The Rule of Scarcity plays a large role in the persuasion process, as any pop psychologist can confirm. Nobody knows that better than master salesman Elon Musk. Waiting times for a Tesla are legend. If you believe the on-line chatter, the Model X is basically sold out for 2015. Is the scarcity for real? John Lovallo, a research analyst at Merrill Lynch, wanted to find out.

In the case of the Model X, Lovallo did not have to dig deep. The way it looks, there won’t be a Model X in 2015. As far as the Model S is concerned, Lovallo was told by Tesla that “essentially, in the third quarter, we sold every car that was. Including cars in, like, showrooms, and everything we basically had.” But then, Lovallo started going through the books, and he found that “Tesla’s finished goods inventory at the end of 3Q appears to tell a different story.” [Continue Reading]