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Another thing dealer model cannot do

Discussion in 'Tesla Motors' started by tomas, Jul 16, 2015.

  1. tomas

    tomas Traded in 9 rep bars for M3, used to be somebody!

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    Just yesterday, I scheduled drive unit replacement at Service Center. I was explaining to a friend, and having to articulate made me think about how much better this really is.

    Rather than repair unit at service center, Tesla's current policy is - regardless of magnitude of problem - swap entire unit and send back to intergalactic to be inspected and refurbished. This offers far better corporate insight into root causes, accelerates continuous improvement of design, leverages a small number of experts, and allows for better quality control. Not to mention the very positive customer service implication: 4 hour procedure vs. many day procedure.

    I tried to make analogy of ICE engine. What if every time you needed rings or a head gasket, or a timing chain, instead they just pulled the engine, put in a refurbished one, and sent yours back for inspection/repair? Well, of course they could do that! Having worked as a mechanic, I know that - in many cases - pulling and replacing engine takes less time than taking it apart and fixing something. And, it would offer the same QC benefits. It just isn't done! And, it's not because the goofball at your local shop is really super-proficient at replacing rings - he/she may not be! It's because the dealer model would never support this. Dealers make their profits from repairs, so they HAVE TO do this locally. Unless the manufacturer offered them a bounty on each engine they sent in, which would render the whole thing economically infeasible.

    So, this is another huge improvement in quality and service that has nothing to do with the technology (could be done with ICE drive unit as well), but is enabled by the delivery/service model.

    As I say this, I have to note: I was told at Service Center that Tesla is in process of rolling out a procedure for Service Centers to fix certain drive unit problems - just as they now fix certain battery problems. It is possible that the logistics costs of the central repair model are unsustainable. Or, hopefully, they are going to hold this to "certain" diagnoses of known problems, so they continue to get the leverage and quality that comes from the central model.
     
  2. mknox

    mknox Well-Known Member

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    Having had my drive unit replaced, I think a lot of this also has to do with how easily the swap is done. I think they told me something like 20 minutes. I'm sure I'm simplifying, but it's basically just removing the drive shafts, unbolting the assembly and lowering it out of the car. I doubt you could do an ICE engine swap in 20 minutes.

    Tesla has always said they don't want their Service Centers to be "profit centers" but at the same time, they will have to figure out how to streamline work and keep costs down. It's fine that it's not a profit center, but not very helpful to the consumer at the end of the day if their methods and protocols still make it "expensive". At some point, my warranty is going to run out, and I'm going to have to start paying for all of this.
     
  3. tomas

    tomas Traded in 9 rep bars for M3, used to be somebody!

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    Think it through, Mark. Costs between central/distributed repair model:

    Labor for pulling and reinstalling =
    Labor for repair: less central
    Training: far less central
    Quality control: far less central
    Logistics costs (packing/shipping/inventory): more central

    So, this is all about a tradeoff between logistics costs and labor/training/quality benefits of centralized model. I would not jump to conclusion this makes it more expensive... Tesla's interests (for reasons of profitability) are same as yours: best/cheapest approach. For drivetrain and battery, you have 8 years, so trust they find best answer by then.
     
  4. mknox

    mknox Well-Known Member

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    Oh, I don't disagree. I've just seen them starting to actually move away from the centralized model. Early contactor replacements had them shipping the whole battery pack to Fremont and now they are doing the repairs in-house. Same thing with the drive units. It looks like they're moving towards in-house repairs as opposed to shipping across the continent.

    I guess I was worrying that if they don't have to worry about profit at Service Centers, they may not worry about costs either, and just pass whatever those costs happen to be along to the consumer and say "hey, we're not making any money on this".
     
  5. tomas

    tomas Traded in 9 rep bars for M3, used to be somebody!

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    Yep, understand that concern. I just have faith that, because the growth curve of their sales will continue to grow: a) for foreseeable future, Tesla will be doing MORE warranty repairs (i.e., on their dime) than out-of-warranty (owner cost), and b) corporate profitability will drive them to manage costs of repairs, which benefits both their P&L and owner out-of-warranty costs. Unless they charge owners far more than their costs, but seems unethical and out of line with mission, and frankly doesn't recoup them that much, so not worth the probable aggravation and reputation damage.
     

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