Elon Musk was scorned when he set up Tesla, but his tech approach to electric vehicles has triumphed. However, when it comes to aftercare, the model’s not so great
The first thing one learns when purchasing a Tesla, as this columnist did in December 2020, is that the neighbours immediately begin to hold one personally responsible for Elon Musk. The co-founder and now Supreme Leader of the company is, one finds, widely regarded by non-techies as a fruitcake with a bad Twitter habit, so it follows that anyone who buys one of his cars must be a devotee of the world’s richest nutter and therefore not properly earthed.
Interestingly, there was a time, not so very long ago, 2005 to be precise, that this view of Musk was held by sensible German men in suits, who laughed at the idea of this jerk building automobiles. Didn’t he know that making cars is hard and that BMW, Mercedes, Ford, General Motors, Volkswagen, Toyota and the rest had spent the best part of a century figuring out how to do it profitably at scale? Sure, he might be able to produce expensive toys for Silicon Valley types – but real cars?
The industry’s derisive scepticism reminds me of 2007, when Apple launched the iPhone. This was at a time when Nokia and Blackberry ruled the world and the mobile marketplace was deemed “mature”. Yet here was this Steve Jobs in his black turtleneck – a guy with no experience of the mobile industry – touting a phone with no keypad and a battery that users couldn’t replace.
Well, we know how that story played out. Nokia and co failed to notice that what Jobs had created was a powerful networked computer that fitted in your hand – and could do phone calls too. In the end, that phone upended – and transformed – a “mature” industry.
The interesting thing is that, with Tesla, history seems to have repeated itself. The company built nearly a million cars last year and sold every one. There seems to be a waiting list for every car they build at the moment. And just as Nokia, a hardware company that didn’t understand software, was eviscerated by the smartphone, so the Ice (internal combustion engine) boys were outflanked by Tesla. They thought that EVs should just be cars with electric motors; Musk’s idea was that they should be software on wheels. Which is why all EVs are now like Teslas – giant skateboards with wheels at the four corners.
But Musk wasn’t content with reimagining the car. He also sought to reimagine the industry. Teslas would not be sold by dealerships but directly to customers. Instead, there would be small numbers of company “service” centres, together with flying squads of technicians who could provide assistance if required. The rationale for this was that EVs are much less complicated than Ices and require much less maintenance. No pesky dealers or their oil-soaked mechanics required. QED.
Now it is undoubtedly the case that EVs require less routine maintenance than conventional automobiles, with their volatile fluids, controlled explosions and hot gases. But cars, no matter how well made, still develop faults or malfunction. And one of the problems with Teslas from the outset is that their build quality – eg fragile paintwork or the way the body panels fit together, for example – has occasionally left something to be desired and certainly wouldn’t pass muster on a BMW production line.
In the Ice age, if the car you’ve bought has defects or problems, then you take it up with the dealer. But for Tesla owners there’s no dealer – just Musk’s corporate empire. And it turns out that, for some frustrated drivers, that empire might as well be on Mars. In the US, the Federal Trade Commission has had more than a thousand complaints about poor service. A trawl of Trustpilot or Reddit reveals the frustrations of Tesla owners who love their cars but are disappointed with service failures.
If you’re being charitable you could explain this as growing pains. After all, this is a company that has been expanding like crazy – from producing 35,000 cars in 2014 to 930,422 in 2021. But the number of its service centres hasn’t increased in proportion to that growth. In the first quarter of this year, for example, Tesla’s US production increased by 68% over the same quarter last year, but the number of service centres went up by only 20%. The company has just 30 in the UK and 160 in the US, a country where an Ice company may have up to 10,000 dealerships countrywide.
A less charitable explanation is that Tesla, like all tech companies, subscribes to the pernicious delusion that employing humans to do customer service is a stupid analogue idea when most of these functions can supposedly be handled by AI or at least by a call-centre. In that sense, the difficulties that Tesla owners experience when trying to get help or repairs sound rather like those suffered by Facebook users trying to get access to a deceased relative’s account or, as I recounted last week, a Google user trying to get his account restored after an erroneous cancellation. Tesla is a tech company that happens to make cars.
Money never sleeps
The Economist Who Knows the Miracle Is Over is very nice Atlantic piece by Annie Lowrey on Brad DeLong and his longue durée history of capitalism.
Business strategist Rob Miller asks in a lovely essay on his Roblog platform entitled Cultivating Serendipity if it’s possible to organise your life in a way that maximises the chances of happy accidents.
TikTok: Trojan Stallion is a sobering blogpost by professor of marketing Scott Galloway on his No Mercy/No Malice website.
‘This too shall pass away’ this famous Persian adage seems to be defeating us again and again in the case of COVID-19. Despite every effort