Tesla expands mobile service program ahead of Model 3 launch

on Jul1

The Tesla Model 3 is to launch this month.

To prepare for the Model 3’s launch this month, Tesla Inc. is relying on an unorthodox strategy to keep service up to speed: sending the tech to the owner.

In February, Tesla said in its fourth-quarter earnings release that it would expand its mobile repair service to handle the addition of a third nameplate this year and a production increase to 500,000 vehicles a year starting in 2018.

Other automakers have offered such services as luxury extras, but Tesla is relying on its program to fill the gaps of a slow-growing service center network.

“Since more than 80 percent of our repairs are so minor that they can be done remotely, we are expanding our mobile repair service that allows Tesla to make vehicle repairs at an owner’s home or office,” Tesla’s letter to investors read.

While Tesla’s software fixes can be delivered via over-the-air updates, other repairs require in-person maintenance. But Tesla’s service infrastructure is far from comprehensive — as of June, there were 67 U.S. Tesla service centers in 25 states.

Until more service centers are added, technicians will hit the road to help with vehicle maintenance — a strategy that may not scale well with Tesla’s growing fleet.

“When you have a new model coming out, you want to do all of your case studies and technical work to make sure [any problem with a vehicle is] not a wide-scale problem” signaling the need for a recall, said Nick Rodgers, a fixed operations consultant at M5 Management Services in Pelham, Ala., and a former assistant service manager at a Tesla service center in Houston. “You can’t do that in a customer’s driveway.”

Mobile service

Tesla rolled out the mobile service program in 2009, allowing about 700 Tesla owners at the time to request services such as annual inspections and electronics replacements to be done in their driveways. While initially marketed as a convenience feature for owners, the program provided technicians in markets where service centers had yet to open.

“It worked great for us in the Houston area,” Rodgers said, adding that dispatching technicians to owners’ homes freed up space in the service center and cut down on shipping cars to the shop. From Houston, the technicians provided service about 350 miles away in the New Orleans area, which does not yet have a service center.

Matt Simmons, 43, a Tesla Model S owner in Pittsburgh, said his experience with the mobile repair service was “pretty hard to top.”

Until the Pittsburgh service center opened in March, the closest center was two hours away in Cleveland. Simmons said that as the number of owners in Pittsburgh grew, Tesla dispatched a technician dedicated to the area, based in Maryland. Simmons used the technician for annual inspections. For larger repairs, the technician helped him send the car to Cleveland and arrange for a loaner.

“On the one hand, Tesla was running him quite hard around the area leading up to our getting a service center. But on the other hand, I always found him to be available and it was nice being on a first-name basis with my service tech, having his cellphone number and knowing he’d be reachable,” Simmons said.

Scaling up

Though Tesla’s mobile service generally has satisfied owners, it has experienced growing pains. And consultants are skeptical of whether the on-demand strategy can meet growing demand efficiently.

In 2012, Tesla touted its program at the launch of the Model S. If the car needed repair, Tesla would send a technician to fix it on the spot if possible. Otherwise, the technician would take the car to a Tesla service center for a flat fee of $100, regardless of how far away the center was, the company promised. But in 2015, Tesla changed the fee. Now transporting the car to a service center costs at least $100, and can run much higher depending on the distance.

More changes are likely.

“When demand starts growing, I can only imagine what it would cost to have multiple technicians and all the parts necessary available on the road,” said Larry Edwards, president of automotive consultancy Edwards & Associates Consulting Inc. near Charlotte, N.C. “It’s an expensive proposition.”

Edwards said Mercedes-Benz launched a similar service about 20 years ago, but it never caught on with owners and was used mostly for dead batteries and to retrieve keys locked inside a car.

However, new startups such as YourMechanic, which performs at-home service for a specific list of repairs, have garnered attention as a way to bring the service business into the growing on-demand economy.

For these mobile services to work, Rodgers said, they need enough skilled technicians and a service center close enough to handle larger repairs efficiently — two resources Tesla has yet to develop.

“Houston is a large area, and within that area there weren’t even 15 technicians,” Rodgers said. “With that many cars rolling out, they’re going to have to beef up their facilities quite a bit.”

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