Model 3 Output Is Not Tesla’s Only Problem

February 22, 2019
Model 3 Output Is Not Tesla’s Only Problem

Since the fourth quarter of 2018, Tesla has successfully ramped up production of the Model 3 to gradually reduce the accumulated backorders for this “affordable” EV. However, as new owners experience minor accidents or mechanical problems that require service, too often the needed parts can take months to arrive.

Customer complaints are rising about these delays and flaws in newly delivered vehicles.  Elon Musk commented on the poor logistics of parts management, but the problem goes deeper since the number of service centers is limited to Tesla’s own network of 85 locations.

It is significant that Consumer Reports latest ratings position Tesla at 27th of 29 brands evaluated, a slide of six spots.


Video Spotlight: Top 2 most common supply chain problems


This post is based on the Breitbart article, Tesla is Failing to Service Its Customers’ Vehicles, by Lucas Nolan, February 11, 2019; the Wall Street Journal article, Tesla is Cranking Out Model 3s- Now It Has to Service Them, by Tim Higgins, February 10, 2019; and the YouTube video, Gerard Schouten shares top 2 most common supply chain problems, by Supply Chain Secrets, August 29, 2017. Image source: Shutterstock / Joey Laffort.

Discussion Questions:

1. As Tesla has managed to increase Model 3 production closer to target plan, what other Operations problems have emerged?

Guidance: Customers involved in minor accidents or requiring repairs for delivery defects are experiencing waits of up to 3 months due to a lack of parts availability.

2. What explanation has Tesla offered about these delays?

Guidance: Elon Musk comments on logistics problems- duplicate shipping and a lack of local storage.  The company claims that it is “inaccurate” to describe all repairs as measured in weeks as other factors contribute to delay (especially the lack of a wide network of franchised dealers that other automakers can rely on, a feature that Tesla touts as an advantage of control over the customer experience).

3. What actions is Tesla taking to improve this supply problem?

Guidance: Actions include investing in more mobile technician teams to visit customers; storing more parts locally at service centers; improved forecasting tools; and quality inspections of third-party body shops.

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