There’s no sign it’s hurting sales, but Tesla’s delivery process left this buyer wondering what kind of retail disruption the company could pull off if it took the time to try
Last week, I took delivery of my new Tesla Model 3 and I’m exhausted!
Why, you ask? Well, let me take you back to the start of this adventure. Earlier this year, my wife’s BMW was written off in an accident and we needed to search for a new car. The insurance company provided us with an Audi A4 rental, which was very good, but on the way back to returning the Audi I test drove a Model 3. The car is amazing — silent, fast, loaded with technology — clearly better than its luxury competitors.
Did I mention that it is also electric? Its functionality as an electric vehicle is excellent, with the supercharger network giving it a huge leg up over its electron-powered rivals, meaning little compromise versus owning an ICE vehicle.
In the end we decided to go back to one car for a while as we didn’t really need two cars. We could just replace our Subaru WRX when the lease expired five months later.
Time to do something
By early summer the time came to do something. I looked at different cars, but there was a desire to go electric, and that Model 3 I drove earlier was a stand out.
The Tesla salesperson I met for the test drive had been good and had sent me gentle follow-ups every couple of months. His product knowledge was excellent, and he sure had passion for what he was selling — all good things in my book.
We decided to push the button, and the salesperson guided me through the online order process over the phone at 9:30 p.m., which was impressive. Delivery was to be within two-to-eight weeks (quite a wide window, which had me slightly concerned). Interestingly, apart from some free supercharging as an incentive, everyone pays MSRP, which certainly took time and frustration out of coming to a decision. So far, so good.
As Tesla doesn’t lease, which I needed for business purposes, I had to find a third-party leasing company. Generally helpful, these guys warned me that the Tesla delivery process could be “a little different.”
Myriad of problems
It sure was, and not in a good way. It took 82 e-mails, approximately 20 phone calls, eight texts and a five-day delay past the first scheduled delivery time to get the car financed, insured and registered. This eclipsed all my past car-buying correspondence combined, probably by a multiple of two. There was a myriad of problems — process issues, lack of communication, misinformation — all of which had to be overcome.
So, what was the root cause? Like most similar issues at dealerships it’s due to poor process. In general, the Tesla people were nice and well-meaning, and were competent in their own right, but putting it together was a mess. There were far too many people involved in the delivery process (I spoke to six different people), sub-standard communication between them, and a lack of an overall coordinating member. I never quite knew the right person to talk to.
As my good friend and ex-Toyota Canada process guru Greg Dyson said, “It’s really tough to watch all this happen when you know exactly what the real problems are.” He’s absolutely right. What it did do though was give me a renewed appreciation for dealerships that run like a well-oiled machine, with a minimum of fuss. Everything just happens, and the customer is blissfully unaware of the background machinations — even if the initial sales process and negotiation process often stinks. It also had me wondering about the money Tesla could make with a well-integrated finance and lease package to offer customers.
Innovation and reimagining
The wrinkle here though is believing that traditional dealerships have a long-term advantage because of their smooth delivery process. They don’t. Tesla doesn’t have a corporate focus on dealer process, or much on process at all — witness their “production hell” that no other OEM experiences. Ever. Tesla is about innovation and reimagining our automotive world in a low-carbon, low-pollution environment. You get the feeling — and it’s reinforced by their CEO’s recent push to close some stores — that their dealerships are a just a temporary way of doing business. They’d dispose of them all tomorrow if there was a better way that fit the Tesla brand. It’s a completely different perspective versus almost every other OEM, and it’s not hard to see how Tesla rubs some people up the wrong way.
As I write this, I’ve only had the car a few days, but it thoroughly lives up to expectations — it’s truly excellent and it feels like the future. As my good friend, who also had a poor Tesla delivery experience, said: “With Tesla it’s all about the product.”
What I hadn’t quite counted on through was that my wife, who likes fast cars, hasn’t really warmed to it. The car is technology personified, so if you have an aversion to technology and don’t like change, you probably won’t like it. However, if you like tech, it will be as if all your gadget dreams came true at once, and of course the kids will just love the built-in fart app.
Focused on the future
So where does this leave us? While my experience is a sample of just one, it does seem clear that Tesla needs to work on their delivery process. Mistakes were made that just shouldn’t happen. But I’m betting that they’ll have some sort of new retail breakthrough out in the not too distant future, and like their cars, it could be truly disruptive to retail automotive.
James Carter is Principal Consultant of Vision Mobility, a Toronto-based consultancy that provides services to OEMs, Tier 1s, dealers, startups, industry organizations and companies on strategies to succeed in a New Mobility environment. Prior to that, James worked for Toyota for 19 years in Australia, Asia and North America.