25 October 2016
Elon Musk is a fabulous innovator but could perhaps pay more attention to after-sales service. Photo: HKEJ
Elon Musk is a fabulous innovator but could perhaps pay more attention to after-sales service. Photo: HKEJ

Tesla under fire for poor after-sales service

Sales is usually the most important benchmark when looking at the financial results of a carmaker.

Tesla Inc. holds nearly 100 million orders, which the company needs to fulfill over four years.

For Tesla, actual deliveries is the key gauge.

In the first quarter of this year, the firm delivered 14,820 electric cars, up 48 percent from the year before.

This shows that the carmaker has been expanding its capacity to catch up with orders.

Yet the biggest issue for the company is its after-sales service, which has made many Tesla owners around the world angry.

Unlike gasoline-powered vehicles, electric cars are propelled by one or more electric motors, using electrical energy stored in rechargeable batteries or another energy storage device.

To be fair, the first Tesla has been in production for less than 10 years, and its failure rate is in line with that of other cars with a much longer history.

Nevertheless, Tesla cars do break down, just like other cars.

The electric car system is innovative, and most repair garages on the street and third-party maintenance centers are often unable to fix the problem.

Owners have to send their cars back to the official maintenance center if their cars have any problems.

However, the number and capacity of these maintenance centers still lags far behind the demand.

There are increasing numbers of Tesla cars on the street as the company quickly ramps up deliveries.

But the number of its official maintenance centers remains unchanged, and its after-sales service has become increasingly stretched.

In recent months, Tesla owners have complained that they have to wait for months after taking their cars to a service center.

The company’s share price tumbled 14 percent last month, lagging far behind the Dow Jones industrial index. 

The biggest crisis is actually in Hong Kong, where more than 4,000 Tesla cars are on the streets.

Hong Kong boasts “the most Teslas per capita”.

However, there is only one Tesla service center in Hong Kong, which is located in Tsuen Wan and has an area of 110,000 square feet.

Many Tesla owners complain that the service center lacks sufficient capacity and staff to serve the customers.

There are long queues of Tesla cars on nearby roads and sidewalks.

Most of the complaints on the firm’s official website are from Hong Kong.

Tesla has done an incredible job in marketing, and its founder, Elon Musk, is dubbed “Iron Man”.

Its cars were considered toys for the rich, like the iPhone of the car industry, and attracted celebrity customers including George Clooney and Leonardo DiCaprio.

However, Musk started his career developing Zip2 software and the PayPal system, and then moved into solar energy and building rockets.

He is good at innovation but may not pay due attention to after-sales service.

This problem has become more severe as Tesla cars have become more sought after.

This article appeared in the Hong Kong Economic Journal on May 5.

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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