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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“Car Guys Versus Bean Counters” Is A Crock Of Shit

Th neverending story... (the cover of GM's 2006 annual report)

Th never-ending story… (the cover of GM’s 2006 annual report)

When Bob Lutz’s book “Car Guys vs Bean Counters: The Battle For The Soul Of American Business” first came out, my review was somewhat distracted by the fact that Maximum Bob had name-checked me in it (or misrepresented a NY Times Op-Ed of mine, depending on how you look at it). Still, the book’s basic problem was all-too familiar in the world of auto executive coverage: the benefits of insider insight were strongly counterbalanced by objectivity problems. I noted

 …though the title sets up an internal conflict within GM, Lutz spends so much space blaming outsiders for GM’s woes that, by a third of the way through, it begins to feel more like apologia than clear-eyed soul-searching… 

…In what is likely part insightful truth and part gentlemanly whitewash, Lutz frames his battle as being not with any one “bean counter” but a faceless (and therefore, blameless) culture in which management-by-the-numbers outweighed personal accountability. Lutz identifies individual “true believers” who he recruited in his design and product-led transformation of The General, but essentially absolves the thousands of others, including then-CEO Rick Wagoner, of any responsibility for GM’s continued decline and eventual collapse.

Lutz’s narrative of post-2001 GM history, in which he led a comeback of “car guy” talent against the decades-long rule of the “Bean Counters”, has been on my mind quite a bit in recent weeks, as GM’s decade-old dirty laundry has been piled into the public’s lap. Already, Congress’s investigation has made it clear that GM rejected fixes to now-recalled ignitions for “business case” considerations, making the ignition scandal a fatal case of “bean counting” that occurred on Lutz’s watch. In light of recent revelations, Lutz’s claim to have been GM’s champion of product quality in a “Battle For The Soul of American Business” deserves another skeptical look.

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