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Reveal aside, will Tesla have the service/support infrastructure in place to support a Gen 3 high volume vehicle in 18 months?

I don't think so and that is my concern about the low end product expansion.
Well they certainly aren’t going to make 5M cars in their first year, so no, I don’t think that’ll be a concern. I haven’t been following service center buildouts (has anyone?), but I do know that here in San Diego, they are adding a new service center to complement their existing three, so that’s a 33% increase.

And Superchargers are increasing seemingly exponentially. So they are looking after that too.
 
Well they certainly aren’t going to make 5M cars in their first year, so no, I don’t think that’ll be a concern. I haven’t been following service center buildouts (has anyone?), but I do know that here in San Diego, they are adding a new service center to complement their existing three, so that’s a 33% increase.

And Superchargers are increasing seemingly exponentially. So they are looking after that too.
What I see on the ground (anecdote alert!) supports this. Here in the Portland metro area, admittedly one of the better markets for Tesla, my wife and I discovered a previously-unknown-to-us service center in the area. We've got 3 now (that I know of!).
 
I was pointing out service centers were lagging vehicle production increases several years ago in the main investor thread- it was always met with heavy disagrees and accusations of FUD.

But I do still know folks who are hours away from the nearest one and won't consider a Tesla because of it.

if they want to find 5+ million buyers a year for a new model, and eventually 20M total a year before end of decade, they WILL have to vastly accelerate service center buildout.

This is one of those places Elon keeps admitting a problem, promising to fix it, then not doing it.


Elon Musk in Oct 2019 said:
Just reviewed Tesla’s service locations in North America & realized we have major gaps in geographic coverage! Sorry for this foolish oversight. Tesla will aim to cover all regions of NA (not just big cities) within 3 to 6 months.

It's 50 months later and there's still many places hours away from the nearest service center.

They had 78 US service centers then (Oct 2019)... They had 186 as of Oct 2023.
 
How many states are still blocking Tesla stores and service centers?

How many states are still limiting the number of stores Tesla can have? Do those consider a Service Center a store?

I'm betting that any where someone is hours away from a Tesla site there is a state law restricting Tesla from opening sites where they want to / need to.

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Alabama (also bans service centers)​

Alabama regards manufacturer-owned new motor vehicle stores and service centers as "unfair and deceptive trade practices".[47] In August 2016 State Senator Tom Whatley introduced Senate Bill 22, assigned to the Senate Tourism and Marketing Committee, which would allow a manufacturer of alternative fuel vehicles to sell and lease its vehicles directly to the public.[48] The bill died in committee.[49]

South Carolina (also bans service centers)​

South Carolina bans manufacturer ownership of new car dealerships and manufacturer service/repair of cars they do not own. A bill was introduced in 2019 to allow electric only manufacturers to sell in the state.[50] However, Tesla does offer mobile service in the state.

New Mexico (also bans service centers)​

2006 New Mexico Statutes, Section 57-16-5-V prohibits manufacturers like Tesla to be licensed as a dealer, directly or indirectly performing warranty or other services.[51] Despite Tesla owners' pleas to change the law, they still currently depend on Tesla facilities that are either on tribal land or out-of-state for Tesla sales and services.

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and others I didn't copy that have issues where they can't do warranty repairs or specific activities in the state.


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Mississippi (1 store limit)​

On March 14, 2023, Governor Tate Reeves of Mississippi signed HB401, which bans direct sales of EVs by manufacturers.[91] Tesla's existing Brandon location will be "grandfathered in".

Ohio (3 store limit)​

In December 2013, days before Tesla was to open its first store in Ohio, a one line amendment to a draft bill was proposed at the urging of the Ohio Automobile Dealers Association that would have prevented Tesla from selling directly to the public in the state. This amendment was dropped a day later.[92] A group of auto dealers then sued the state to try to get Tesla's license rescinded. This suit was dismissed less than two months later. Shortly thereafter a legislative bill was introduced that would ban all manufacturers from owning dealerships, not just those with existing franchisees.[93] A deal reached between Tesla and the Ohio Automobile Dealers Association in March 2014 allowed Tesla to have three stores but blocks all other auto manufacturers.[94] The Ohio Senate approved the bill in April.

Maryland (4 store limit)​

In May 2015, Maryland approved, through House Bill 235,[95] direct Tesla sales to customers beginning in October 2015, though limiting the statewide number of stores to only four. The legislation was crafted specifically for Tesla and allows only four manufacturers of electric or non-fossil fuel burning vehicles without existing franchisees to be licensed to sell direct to the public.[96][97]

Virginia (5 store limit)​

In Virginia Tesla has obtained license from the Department of Motor Vehicles (DMV) for a single direct sales dealership (Tysons Corner). Upon learning of Tesla's attempt to obtain a second dealership in the state, the Virginia Automobile Dealers Association filed a lawsuit in March 2016 against both Tesla and the DMV to prevent the licensing of the second dealership.[98] In September 2016, the Virginia Department of Motor Vehicles (VDMV) recommended ending Tesla direct sales, as at least 11 dealerships were interested in selling Tesla vehicles.[99] The VDMV later allowed Tesla to open another shop (Richmond), as Tesla has no dealerships to compete against;[100] the 11 interested dealerships would not be able to compete on undiscounted prices, as Tesla has the same price online and in shops.[101][102] Third-party profits could come from servicing as is traditional, but Tesla already has satisfactory servicing.[102][103] In July 2021, Tesla won approval from the Virginia Department of Motor Vehicles to open three new stores in Charlottesville, Norfolk and Arlington.[104]

New Jersey (4 store limit)[edit]​

On March 10, 2014, it was announced that New Jersey Motor Vehicle Commission and Governor Chris Christie's administration would be holding a meeting to pass a new proposal into law. This new proposal, PRN 2013–138, was announced one day before it was to be put into law. Tesla responded by saying that the proposal "seeks to impose stringent licensing rules that would, among other things, require all new motor vehicles to be sold through middlemen and block Tesla's direct sales model", and that "[Governor Christie's] Administration has decided to go outside the legislative process by expediting a rule proposal that would completely change the law in New Jersey."[105] The law was passed, and "Tesla will no longer [be able to] sell electric cars in New Jersey, effective April 1". Diarmuid O'Connell, Tesla Vice President of Business Development, said, "Worse, it has done so without any reasonable notice or even a public hearing."[106] Forbes contributor Mark Rogosky said, "The state's new rules protect its auto dealers from having to compete with Tesla's direct sales model"; he points out that this is a direct contrast from what Christie said earlier, "We are for a free-market society that allows your effort and ingenuity to determine your success, not the cold, hard hand of the government."[107] Kevin Roberts, a spokesman for the Christie administration, responded by saying "it was the [Tesla Motors] company, not the governor's office, that was attempting to bypass normal procedures.".[105][108]

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and again others I didn't copy.
 
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I was pointing out service centers were lagging vehicle production increases several years ago in the main investor thread- it was always met with heavy disagrees and accusations of FUD.

But I do still know folks who are hours away from the nearest one and won't consider a Tesla because of it.

if they want to find 5+ million buyers a year for a new model, and eventually 20M total a year before end of decade, they WILL have to vastly accelerate service center buildout.

This is one of those places Elon keeps admitting a problem, promising to fix it, then not doing it.




It's 50 months later and there's still many places hours away from the nearest service center.

They had 78 US service centers then (Oct 2019)... They had 186 as of Oct 2023.
perhaps location dependent but recent experience (I’ve owned multiple teslas since 2016 and never seen such an extended service window in both Nc and fl) in obtaining a non-mobile appointment at Raleigh service center is often 3-4 weeks out and ft Myers is also multiple weeks.

They are not scaling fast enough for current volume let alone a wave of new trucks and lower priced volume cars.
 
I was pointing out service centers were lagging vehicle production increases several years ago in the main investor thread- it was always met with heavy disagrees and accusations of FUD.

But I do still know folks who are hours away from the nearest one and won't consider a Tesla because of it.

if they want to find 5+ million buyers a year for a new model, and eventually 20M total a year before end of decade, they WILL have to vastly accelerate service center buildout.

This is one of those places Elon keeps admitting a problem, promising to fix it, then not doing it.




It's 50 months later and there's still many places hours away from the nearest service center.

They had 78 US service centers then (Oct 2019)... They had 186 as of Oct 2023.
Not to get too in the weeds, but Elon mentioned at some point that he was surprised Q never brought up the issue that having service centers with no out of warranty work to do (revenue) was actually a real point of vulnerability for Tesla (or any new car company).

Existing dealerships make their profit on service, not sales (I've heard). A brand with no existing fleet can't win with service centers. It's fixed overhead that either has no work to do (bad utilization) or lots of work (bad warranty costs).

So (theoretically) Tesla/ Elon knew coverage/ responsivness was lacking, but couldn't do much to address it in a cash flow sensitive way.
Now that there is a large pool of aging cars, serivce is break even to profitable and Tesla can afford to expand locations though the new spots will have less of a local fleet (and thus be sub profitable) until the cars in that region of expansion age.
 
How many states are still blocking Tesla stores and service centers?

How many states are still limiting the number of stores Tesla can have? Do those consider a Service Center a store?

I'm betting that any where someone is hours away from a Tesla site there is a state law restricting Tesla from opening sites where they want to / need to.

You'd lose that bet.

The only states on the list banning service centers are Alabama, South Carolina, and New Mexico. There's also some dispute ongoing around the existing one in Louisiana. So 46 out of 50 states they can build service centers freely. And in one of the 4 (NM) they already worked around it via tribal land. Currently -ten entire states- have 0 service centers but no law preventing them.



Draw an imaginary straight line west to east from the pacific ocean to just north of Salt Lake CIty, continuing east to Council Bluffs Iowa. That's nearly across half the US by distance.

North of that line, excluding a few service centers bunched up right along I-5 on the west coast in WA/OR, there's 3 service centers in that entire area north into Canada. 2 of those 3 are still in WA/OR, just a little further east than I-5. The ONE left in that whole massive area is in southwest Idaho. East of that there's nothing until Iowa.

0 in Montana, 0 in North Dakota, 0 in South Dakota, 0 in Nebraska, 0 in Wyoming. 0 in Kansas too though it's technically below my imaginary line.

Also 0 over in Arkansas and 0 in West Virginia. 0 in Maine. 0 in Vermont.

New York does have some but north/west of the NYC area there's a MASSIVE gap in most of upstate NY and most of Pennsylvania north of I-76 till Pittsburgh.

Tons of other smaller gaps where it's still >2 hours to service centers from midsized cities (Ft Wayne Indiana, Davenport Iowa, Springfield Missouri, Tallahassee Florida, most of western Texas, etc)
 
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I was pointing out service centers were lagging vehicle production increases several years ago in the main investor thread- it was always met with heavy disagrees and accusations of FUD.

But I do still know folks who are hours away from the nearest one and won't consider a Tesla because of it.

if they want to find 5+ million buyers a year for a new model, and eventually 20M total a year before end of decade, they WILL have to vastly accelerate service center buildout.

This is one of those places Elon keeps admitting a problem, promising to fix it, then not doing it.




It's 50 months later and there's still many places hours away from the nearest service center.

They had 78 US service centers then (Oct 2019)... They had 186 as of Oct 2023.

Cumulatively, there are probably around 2.1m Teslas still on the roads in the U.S. That's more than 11k/service center.
 
I agree with you, further evidence that Teslas are incredibly reliable.


yeah which is why they don't need tremendous DENSITY in the areas they have service centers.

But they need to exist

Which they currently don't in over 25% of US states, and large geographical areas of states where their # is non-zero as well.


Ideally they'd also exist without weeks to get any appointment. I just checked my local one (Raleigh NC) and the first available is January 24 at 2:30 PM. Fully 5 weeks away. Even if we pretend next week doesn't exist due to holidays a 1 month wait for ANY appointment seems excessive.
 
Reveal aside, will Tesla have the service/support infrastructure in place to support a Gen 3 high volume vehicle in 18 months?

I don't think so and that is my concern about the low end product expansion.
I used to think they would get around the problem of osbourning by initial production out of Austin being a high priced trim of the new gen 3 car (AWD performance hatchback maybe) with prices/range similar to the SR 3 & Y, so wouldn’t steal much demand away, and once Mexico was ramping only then would they announce the lower cost single motor variant.

However it’s possible they get around any osbourning worries altogether by making the first product off the Austin next gen line being a van.
 
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Not to get too in the weeds, but Elon mentioned at some point that he was surprised Q never brought up the issue that having service centers with no out of warranty work to do (revenue) was actually a real point of vulnerability for Tesla (or any new car company).

Existing dealerships make their profit on service, not sales (I've heard). A brand with no existing fleet can't win with service centers. It's fixed overhead that either has no work to do (bad utilization) or lots of work (bad warranty costs).

So (theoretically) Tesla/ Elon knew coverage/ responsivness was lacking, but couldn't do much to address it in a cash flow sensitive way.
Now that there is a large pool of aging cars, serivce is break even to profitable and Tesla can afford to expand locations though the new spots will have less of a local fleet (and thus be sub profitable) until the cars in that region of expansion age.
Excellent point!
 
Back to “near future quarterly financial projections” related discussion: Does anyone know what sort of positive impact Tesla deciding against giving out stock bonuses to many employees (by the sounds of it) in current quarter will have? Presumably will help GAAP net income.

Very difficult to compute this based on the scant details of the news articles but I could see a potential savings to Q4 GAAP income of $30m.
 
Very difficult to compute this based on the scant details of the news articles but I could see a potential savings to Q4 GAAP income of $30m.
In thinking about this a bit more . . .it is possible that the impact is to Q1 '24. Many companies communicate new annual options in Q4 but actually grant them in Q1. There would be some cost reduction but it is not clear whether we will see it in Q4 '23 or Q1 '24.
 
I agree with you, further evidence that Teslas are incredibly reliable.
1000002638.png
 
Of the 13:
5 were software errors addressed via OTA
5 were OTA updates due to NHTSA requests, 4 FSD behavior, 1 pedestrian warning behavior
1 was a build issue impacting 137 cars
1 was a supplier build issue impacting 3,470 cars
And 1, the oldest from 2021, was a part reliability issue potentially impacting 826 vehicles
 
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