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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Gallery of rare Nissan Skylines shows: The path to Audi’s success was long and arduous. Surprisingly, Nissan is already halfway there

1957 Nissan Skyline Deluxe

1957 Nissan Skyline Deluxe

When Nissan showed its turbo-powered “200GT-t” Skyline to the Japanese media today, I did not need to speak Japanese  to understand what they are driving at. “Premium” was about every second word spoken during today’s launch at Nissan’s waterfront test track in Oppama. Seeking to spice up its earnings with a little of that secret Audi sauce, Nissan wants to shed its commoner image and enter the rarefied strata of the premium car market. If you think that’s a joke, you should have been there (as I was) when Audi tried the same, in the last century. Against all odds, and many decades later, Audi succeeded. Volkswagen’s premium brand sold 1.6 million units globally last year, 16 percent of the Volkswagen Group total. When it comes to profits, however, Audi is the biggest contributor to Volkswagen AG’s bursting coffers. That gets automakers thinking.

Nissan is not alone in its desire to sell cars with extra pricing power under the hood. Whenever quarterly numbers are announced, the world’s auto executives want to be like Audi. [Continue Reading]