1. Take big deposits for a car you haven’t released. 2. Delay the car once. Delay the car again. 3. Hardly communicate with the customers who put down deposits. Make it company policy to tell customers, “we don’t know”. 4. Keep changing things last minute which you know will cause delays but then tell everyone it’s not going to be delayed. 5. Hold a big event to launch the car when the car isn’t ready to go into production yet, just so you can say you met the launch deadline. Ironically, start the event ridiculously late and don’t apologize for it. Instead, leave people standing and waiting around for hours. And then have a ridiculously small amount of cars available for test rides so that most people have to wait for hours and don’t get a ride after the event. 6. If people complain, brush them off. Or just cancel their reservation. 7. Always have lots of excuses. Then wonder why your stock price has been hammered. Now this is coming from one of Tesla’s biggest fans (me!), but I’ve got to tell it like it is. Tesla has really botched the Model X reservation and rollout process. I think the main problem is their lack of transparency throughout the process and their lack of high-touch communication with reservation holders. The more delayed the Model X is, the more Tesla needs to communicate with reservation holders and the communication needs to be increasingly “high-touch” (ie., not just a form mass email). I think Tesla doesn’t get this. It feels like Tesla thinks Model X reservation holders are so naively fanatical about Tesla that they’re willing to wait forever without complaining. What really scares me is how it appears Tesla hasn’t learned their lesson. I can see Model 3 play out very similarly. Tesla makes a ton of promises and then takes a ton of reservations. Then, throughout the process they do a utterly dismal job of communicating. And then they delay the car and hide all problems with excuses. When people complain, they brush them off. I can see people making a reservation for base model Model 3 expecting the car by the end of 2017. But chances are Tesla might barely squeak by several Founders cars by the end of 2017. And it’s likely there won’t be any significant quantities of Model 3 produced until Q2 of 2018 (my guess as they’ll probably face production difficulties). Then, if you’re located on the East Coast if you ordered a base model (w/few options), then you might be getting your car in the first half of 2019. The question is how will Tesla navigate this and how will they communicate with this kind of buyer. If they follow what they did with the Model X, they’ll alienate tens of thousands of more people. Here’s how Tesla can correct the ship. First some overall guiding principles: 1. Be transparent. 2. Make the reservation waiting process the best ever. 3. Don’t over-promise on features or dates. And here are more specific suggestions. 1. I think Tesla should be ultra-transparent and share specifics on how many cars they plan to produce and when, and when people (based on their location and model reserved) can expect to receive the car. For example, Tesla can say that they’re going to deliver several Founder cars by end of 2017. 2018 will be roughly 50k cars but with slow ramp in Q1 (i.e, 2000 cars in Q1). People who live in West Coast and who’ve ordered highly optioned cars will be prioritized. If you live in East Coast and have ordered base model, then expect in in first half of 2019. 2. If the rollout plan changes, then Tesla should be honest and upfront with the challenges they’re facing and the reasons for delay. They shouldn’t hide the problems. 3. Tesla ought to be in continual communication with Model 3 reservation holders and should be more open on the development of Model 3. 4. If Model 3 is delayed where the rollout needs to be pushed out further than what was originally planned, then there ought to be consequences within Tesla (ie., heads should roll if Model 3 rollout is delayed by more than few months). Overall, what Tesla needs to get is that the reservation waiting period is part of the “product” they’re offering. It’s not just the car itself, but it’s the entire experience that’s important. If you deliver a great car but the experience of waiting and buying the car is terrible then you’re still going to piss off a lot of people. Lastly, I love Elon but I hope he changes his mind on Alsop. Alsop clearly crossed the line with some of the language in his blog posts, but the overall backdrop is Tesla’s botched Model X rollout and the frustration and angst that thousands of their best customers have been feeling. I hope Tesla can get in touch with that. In a way, Alsop is just vocalizing his own frustrations (in his imperfect and albeit attacking ways) but it’s not something isolated; rather, it’s something very prevalent and largely Tesla’s responsibility. You can’t take a large deposit, promise a product by a certain date, yet hardly communicate and deliver exceedingly late beyond anyone’s expectations without making a lot of people very upset. I hope Elon will reinstate Alsop’s Model X reservation and make a tweet saying that he’s done so. As a shareholder, Model S owner, Model X reservation holder, and one of Tesla’s biggest fans, I sincerely hope that Tesla realizes how bad they screwed up the Model X rollout and I hope they don’t screw up Model 3 in the same way. - - - Updated - - - Part 2: Here’s what I think happened behind the scenes. Obviously Tesla didn’t intentionally try to alienate their best customers. But it was a result of a different intention. I think Tesla was scared to cannibalize Model S sales, so they tried to keep quiet on the Model X and all the new features it had. I also think they intentionally tried to keep quiet on the Model X throughout it’s development as to not divert focus and attention from their current product, the Model S. They didn’t want people to not buy the Model S because the Model X might be so much better. Also, with the Model X people might realize that the Model S would get a refresh/upgrade with some of the new features of the Model X and that might discourage some people from purchasing the Model S now. I think the result of Tesla keeping quiet on the Model X is that they put communication with Model X reservation holders as very low. In other words, they didn’t have a team focused on making the Model X reservation experience awesome. Rather, it was just a job to send mass form emails once in a while but their goals/expectations were very low on the type of experience they wanted to give to reservation holders. Tesla is also a company where lots of things are going on. They’ve got lots of products (Model S, Model X, Gigafactory, Superchargers, Tesla Energy, etc). So, unless something is prioritized then it can get overlooked. I think communication with Model X reservation holders wasn’t prioritized, and thus it got overlooked. The Model S was a different story/experience. Tesla didn’t have a product to cannibalize (Roadster was already done/finished) so they were able to be more transparent in the development of the Model S. They showed off the car and it’s features and were fairly transparent with the overall development and production process. This is in stark contrast to the tight-lipped approach of the Model X that even rivaled the tight-lipped approach of Apple with their new products. Overall, I think it was a big mistake. Actually, let me rephrase that. I think it became a big mistake because of the delays they faced with Model X. If they didn’t face any delayed and rolled out production quickly then I think their plan (of keeping quiet during the Model X development time) would have been okay. However, with each delay Tesla really ought to have taken more action to communicate and include it’s customers. But instead of doing that, they decided to remain quiet. This only served to isolate and alienate their own customers. When Tesla started to face delays I think they should have tossed out their “keep quiet” plan with the Model X, and they should have resorted to a super high-touch and super transparent communication approach. They should have know the delays would test their relationships with their customers and that they could/should/would need to keep ties with their customers through an increased priority in communication. However, by sticking with their original plan to keep quiet and not adjusting because of the delays, the end result was they alienated a lot of their biggest fans/customers. So, the title of my post really ought to be “Tesla's Model X Master Plan that Alienated Their Most Loyal Customers”. In other words it wasn’t their intent to alienate but rather a result. Update: Changed the title from "Tesla’s master plan to alienate their most loyal customers" to "How Tesla Managed to Alienate Their Most Loyal Customers".