KEITH CRAIN

Tesla's wasting time, energy, money

COMMENTARY
Keith Crain is editor-in-chief of Automotive News
TESLA V. DEALERS
TESLA V. DEALERS
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When I buy a product, I want a retailer nearby where I can get service and satisfaction. If there isn't a service outlet nearby, it is up to the manufacturer to make arrangements to provide service.

If you care about customers, you have to be able to take care of them when they need help. That is particularly true in the automobile business, where vehicles need a lot of attention over their lifetime.

For some reason, Tesla Motors CEO Elon Musk has decided to wage war with the retail business to the detriment of his customers. He seems to be more interested in his company than his customers.

It would be easy for Tesla to appoint 40 or 50 dealers to serve most of its current customers.

I don't understand why Musk is bouncing around the world with products here and there when he has not yet completed his distribution program here.

Too many folks seem to think, erroneously, that having dealers to handle all the complications of buying and servicing a car adds to automaker cost rather than making it better and safer for the customer.

Tesla has some U.S. service centers and service vans that go to customers' houses or offices. How will that work, though, when less expensive cars arrive in a few years and the number of Teslas sold in the United States goes from an estimated 20,000 last year to a hoped-for 250,000 by the end of the decade?

So far, Tesla has handled recalls by mailing replacement plug-in adapters to 29,000 customers, for example, and dispatching technicians to a few hundred customers' homes. But after the first big-repair recall, I guess Tesla will be sorry it doesn't have an independent distribution system.

The franchise system works for the manufacturer, and, more important, it works for the customer. It lets a manufacturer use capital for better things than setting up factory-owned dealerships.

Musk has done a brilliant job of creating a new-vehicle line and getting the business off the ground. But eventually those around him will advise him to change his distribution system.

We'll see if he's smart enough to listen.

You can reach Keith Crain at kcrain@crain.com.


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