Tesla Service Centers

[gg_got_a_tesla]

Good points all, Robert. But, by hiring the right folks locally and making them stay attuned to local needs, Tesla can pull this off even with their central ownership model. After all, Starbucks has managed to pull this off the world over without any franchising!

I'm not sure if and when Tesla will reach the tipping point but, in my opinion, Tesla can and should stay with their current store model (a la Apple) for the next 4-5 years. I know I'm in Tesla's backyard and don't have much to worry about vis-a-vis stores and service, but, I've never really been thrilled with independent car dealerships (across 4 brands) who don't necessarily project the same image and level of service that the manufacturer intends to.

[Robert.Boston]

If my post created any ambiguity, I think Tesla's direct-ownership approach is absolutely the right model. There are at least as many problems with maintaining a common culture and customer experience in a dealership approach. Dealerships arose in a very different time of retailing, along with department stores. Apple doesn't franchise; neither should Tesla.

(btw, Starbucks does franchise, but indirectly, allowing other restaurants to use the Starbucks product and name.)

[BYT_P1,837]

I know I'm in Tesla's backyard and don't have much to worry about vis-a-vis stores and service....

Being in Newark you are in their front yard... I like the Apple comparison as well, nothing wrong with emulating a winner, and Tesla can get their in time. Ford has been around for 100 years!

Tesla Motors can take a few extra years to get it all right
and then put out a car that will be out of sight
and hopefully one day the environment will also be bright
before it all blows up like dynamite!

Had a rare moment of creativity there, don't worry, I'm not quitting my day job!

[daniel]

From a corporate finance perspective, why should a publicly traded firm have more difficulty raising capital to build a dealership than a local businessman?

Because a local businessman may have a personal relationship with his bank. He may have collateral which makes the loan very low risk for the bank. He may already own and run a car dealership so his only additional capital investment is car-specific diagnostic equipment and technician training.

And because there's a qualitative difference between an established local business asking a local bank for an expansion loan, and a start-up company asking the capital markets for enough money to open a thousand stores nation-wide.

I agree that Tesla's model has all the advantages mentioned. I just don't see how it can lead to the kind of ubiquitous sales and service presence that all the major car brands have. I lived in Fargo when I bought my Prius. Toyota never would have had a dealership in Fargo were it not for a model that allowed independent businesses (owned by people who already lived there) to open dealerships. Someone commented above that I should not expect a service center in Spokane. But without that, they'll never sell a mass-market EV to the people who live here. There's a Nissan dealership about 3 or 4 miles from me, another on the north side of town, and another in a small town not far away. Tesla will not be able to compete with Nissan in the $30K and below price bracket in Spokane without a sales and service center here, and the same goes for every other city that is not targeted for a store.

Maybe this goes in the "Challenges for Tesla" thread, but establishing a national and global distribution and service network is necessary to becoming a mainstream auto maker, and that's a challenge of no small importance.

[jerry33]

I can take my Prius in for service and the dealership gives me a ride home, and then picks me up later in the day.

That is certainly not the normal modus operandi for Toyota dealer around here. If you want to wait 45 minutes they may rent you a car--if they have one available. It's generally less trouble just to wait for the service to complete.

With the Roadster, I have to pay a lot of money to have a ranger come to my city. I accepted that because I wanted the car so badly. But would a potential Bluestar buyer feel the same?

Hopefully by the time Bluestar is out there will be a lot more Tesla stores so that Ranger visits will be less common and less expensive.

[Warrenbonz]

[QUOTE=

I agree that Tesla's model has all the advantages mentioned. I just don't see how it can lead to the kind of ubiquitous sales and service presence that all the major car brands have. I lived in Fargo when I bought my Prius. Toyota never would have had a dealership in Fargo were it not for a model that allowed independent businesses (owned by people who already lived there) to open dealerships. Someone commented above that I should not expect a service center in Spokane. But without that, they'll never sell a mass-market EV to the people who live here. There's a Nissan dealership about 3 or 4 miles from me, another on the north side of town, and another in a small town not far away. Tesla will not be able to compete with Nissan in the $30K and below price bracket in Spokane without a sales and service center here, and the same goes for every other city that is not targeted for a store.

Maybe this goes in the "Challenges for Tesla" thread, but establishing a national and global distribution and service network is necessary to becoming a mainstream auto maker, and that's a challenge of no small importance.[/QUOTE]

I agree that this will be an important challenge for Tesla to overcome.
Since Tesla is selling major components to Mercedes and Toyota I could imagine a scenario where Tesla vehicles are being serviced at Mercedes and Toyoya dealerships in areas far away from Tesla service centers. Anyone think this is possible/likely?

[smoothoperator]

I agree that this will be an important challenge for Tesla to overcome.
Since Tesla is selling major components to Mercedes and Toyota I could imagine a scenario where Tesla vehicles are being serviced at Mercedes and Toyoya dealerships in areas far away from Tesla service centers. Anyone think this is possible/likely?

this is unlikely, supposedly Elon Musk does not want the "Tesla Experience" to be diminished by normal car dealerships/service centers.

[Robert.Boston]

Since Tesla is selling major components to Mercedes and Toyota I could imagine a scenario where Tesla vehicles are being serviced at Mercedes and Toyoya dealerships in areas far away from Tesla service centers. Anyone think this is possible/likely?

Frankly, no. The core systems are so far removed from the MB/Toyota lines that the technicians won't have a clue what to do in most circumstances.

[gg_got_a_tesla]

Frankly, no. The core systems are so far removed from the MB/Toyota lines that the technicians won't have a clue what to do in most circumstances.

And, we've heard someone say that their Prius was being serviced by someone who had no clue how to start the car or some such thing at a Toyota dealership! No, thank you!

[Warrenbonz]

Frankly, no. The core systems are so far removed from the MB/Toyota lines that the technicians won't have a clue what to do in most circumstances.

Toyota and Mercedes techs will need to be trained to work on their upcoming electric vehicles that utilze Tesla powertrane so I think it is pretty likely that a Mercedes tech trained to service an electric Mercedes with a Tesla powertrane would be technically capable of handling some Tesla vehicle service issues. As far as the Tesla experience goes, if given a choice, I can't imagine people that live far away from a Tesla service facility (ie. Alaska) opting to pay several thousand dollars on top of the normal fee for an annual service versus saving the money and "suffering" through a Mercedes imitation of the Tesla experience . Seems like a service arrangement with Mercedes/Toyota would be a win/win to me. Mercedes/Toyota could generate additional income from thier investment in training and equipment to service the few electric vehicles they initially sell and Tesla solves a major challenge to going mass market. I hope Tesla gives this idea serious consideration. My hunch is that they are already considering something like this but would never publicize it until the deal became final.