Telsa selling out of their loaner fleet

[yobigd20]

After dropping my loaner back off today, I learned that this service center sold out their entire fleet of loaner cars in 2 days over this past weekend. Mine is the last one and only loaner they have left.

It sounded to me that this was pretty much across the board at all the service centers.

The reason is because of a new option when ordering your car that they just made within the last week or so. After configuring your order, you are given a list of similarly configured loaners at the service centers. You have the option to purchase one of these outright.

I guess what they didn't expect (or perhaps they did), is that EVERYONE is selecting a loaner car to get there car ASAP instead of waiting for a new one. In 2 days their entire fleet was sold. They were actually even calling people who were driving the loaners to bring them back because they were now sold to a new owner. Again these were ALL *new* owners (not existing people upgrading).

By doing this, they are also getting a sharp increase in sales for this quarter (expect their sales numbers to be really high).

This also explains the huge P85 price increase last month. Since the loaner fleet is entirely P85 vehicles, and the 'loaners cars' were being sold at a discount since they are not exactly "brand new" (might have a few hundred miles on them, etc), by increasing the price of an optioned out P85 by $20k, they still get to keep their margins up (that's 100% profit for them over the previous price they were selling them at) and people just seem to be buying out the loaner vehicles since they are "almost brand new", at a discount, they still get the rebate, and they can get it TODAY instead of waiting.

Two side effects that I speculate about
1) sales might go down next quarter relative to this quarter (as sales numbers this quarter will be high due people ordering who would have gotten their vehicle next quarter are instead getting them this quarter), but then again now deliveries are up in other parts of the world so this point is probably moot.
2) now there are no loaner vehicles. I suspect current owners will be unhappy about not getting a Tesla loaner now (I'm guessing they'll just give out ICE loaners since most of not all of the service centers are probably completely sold out). It'll take them a while to repopulate that loaner fleet.

 

[SwedishAdvocate]

…] It'll take them a while to repopulate that loaner fleet.

Or maybe they anticipated at least some of this scenario, so perhaps some 30-40% of what they have sold of their loaner fleet will be repopulated shortly.

 

[ckessel]

I vehemently disagree with Tesla selling out loaners before replacements are available. It goes completely against their promise of world class service and having top end loaners available. It also does NOT help quarterly numbers in the long run. They siphon everything into QX to help it's numbers, but that just means they have to build more loaners for QX+1 and then it gets siphoned again. It's an endless crunch cycle of always draining every penny into each quarter at the expense of the start of the next quarter. Short term thinking.

Tesla should not be playing that game. Tesla is going to build and sell Y loaners throughout a given year, so pace it so the turnover is a steady state rather than constant feast and famine. In the end the sales are the same, customers are happier since they have loaners, there's less crunch on the service folks. Win/win/win.

 

[dennis]

I believe they did a similar thing in June, without the ease of "check the box", so I wouldn't count on this resulting in a big spike in sales in Q3.

 

[gmontem]

Well this sucks. I have a scheduled 12500 mile maintenance tomorrow morning. I think I'll reschedule if they try to give me an ICE rental.

I guess I shouldn't be surprised that Tesla Motors is like any other business where $$$ comes first, customers last.

Sent from my RM-877_nam_att_205 using Board Express

 

[araxara]

I’ve been driving a loaner for about 10 days now. I'll be returning it tomorrow to pick up my car. This loaner is a P85+, but has some small cosmetic flaws that would need to be taken care of before they sell it. It has also been scavenged for an interior body panel that will need to be reinstalled. At about 2200 miles it’s getting close to the 2-3K mile range that they are targeting before the loaners get sold. Knowing all that, I would not want this loaner, if I were buying a new car. I guess if they can hand it over to someone with all the flaws taken care of, the new owner will not know the difference.

 

[Sunnyday]

Two side effects that I speculate about
1) sales might go down next quarter relative to this quarter (as sales numbers this quarter will be high due people ordering who would have gotten their vehicle next quarter are instead getting them this quarter), but then again now deliveries are up in other parts of the world so this point is probably moot.

There's a silver lining to this. The more cars they get in owners' hands today, the more cars they'll sell tomorrow. Owners are Tesla's best evangelists. Let's see a show of hands... if you're an owner, how many Teslas have you sold to friends, family and strangers? And how many have they sold? And so on, and so on. When you're selling a product that sells via viral word of mouth (and line of sight), all you need to do is get the product in customer hands.

 

[AudubonB]

It sounded to me that this was pretty much across the board at all the service centers.

The above is the suspect portion of your story. I submit it is dangerous to extrapolate to all service centers what you learned to be occurring at your site. As others have commented, it is foolhardy and counterproductive for TM to perform the dual follies of eating the next quarter's performance AND degrading, significantly, customer service.

So.....I HOPE you're wrong!

By the way: just how many loaner vehicles was that? Has anyone a fair idea of what any particular service center presumably has?

 

[gmontem]

Since you asked, I'm an owner and sold zero.

Sent from my RM-877_nam_att_205 using Board Express

 

[yobigd20]

By the way: just how many loaner vehicles was that? Has anyone a fair idea of what any particular service center presumably has?

About 12.

 

[texex91]

I think it's great that Tesla is keeping their loaner fleet new AND improving their bottom line for the quarter!

Having newer cars coming in to drive as loaners is a great thing (even at the expense of maybe a few weeks of Enterprise ICE cars as they transition).

And no matter the condition, I personally would never buy a loaner car, as I like mine fresh from the factory. But for some, it's a more affordable way to get into a Tesla, and they are okay with the loaner flaws of it.

 

[Zythryn]

...
The reason is because of a new option when ordering your car that they just made within the last week or so. After configuring your order, you are given a list of similarly configured loaners at the service centers. You have the option to purchase one of these outright.
...
Since the loaner fleet is entirely P85 vehicles, and the 'loaners cars' were being sold at a discount since they are not exactly "brand new" (might have a few hundred miles on them, etc), by increasing the price of an optioned out P85 by $20k, they still get to keep their margins up (that's 100% profit for them over the previous price they were selling them at) and people just seem to be buying out the loaner vehicles since they are "almost brand new", at a discount, they still get the rebate, and they can get it TODAY instead of waiting.

You are making a number of assumptions and exaggerations.
A) This is not a new 'option'. They have been doing this for many months. We got our second car exactly this way last May.

B) Not all loaners are 85s. The loaner we bought was a 60 and our SC had two 60s as loaners among others.

C) Not "EVERYONE", as you put it is buying loaners. I have spoken with a few people who have just recently placed factory orders. I did see one buy a loaner.

It has always been cheaper to buy a car with a few miles on it. The discount was mentioned way back in the spring (winter) when they announced the loaner program ($1/mile 1%/month or so).

Our Service center received a new loaner (85) just yesterday to replace one of the sold ones. And I am sure they will receive more in short order. Yes, they will be short on them for a bit, so if you have service scheduled and can put it off you may want to wait till after the end of the quarter.

If it really bugs you please email ownership and let them know.

 

[JakeP]

This thread is interesting, and may shed some light on why I am being told by one service center that the "Valet Service" is not available to me (even though I prepaid for the "Anywhere Plan"), yet another service center slightly further away (but in my own state) tells me they would absolutely send me a Tesla loaner when they picked my S85 up for its annual service. Hoping to get this all ironed out by the time my annual service is actually due...9500 miles and counting!

 

[brandonmbeard]

It's also entirely possible they are refreshing their loaner fleet. They do not want to have loaners that get too high in milage as they lose too much money on them. I would be shocked if Tesla stops the Valet service or switches it to and ICE rental, that just does not seem like it fits with the Tesla vision.

 

[Enadler]

I think they need to balance the sales with the availability of loaners. I have no problem with the sale of loaners as long as each center maintains enough cars to provide for their service customers. When I called to make an appointment to have tires rotated and some upgrades performed I had to schedule the appointment 3 weeks out if I wanted to get a loaner as there was only 1 at the time. By contrast for my Lexus i could call for an appointment and usually secure a loaner with only a few days notice.

 

[yobigd20]

You are making a number of assumptions and exaggerations.

Right. My communications skills are not the "best" in the world

A) This is not a new 'option'. They have been doing this for many months. We got our second car exactly this way last May.

Well, relatively new option then. Had no idea they've been doing this for months. I wonder if they "turn this on and off" in order to trigger the sudden sell-out at the end of the quarter. It's sort if random that they would have all these loaners and then sell out over the course of two days.

B) Not all loaners are 85s. The loaner we bought was a 60 and our SC had two 60s as loaners among others.

Ah also news to me. I thought Elon said the loaner fleet was all P85s (in order to entice existing 60/85 owners to upgrade)

C) Not "EVERYONE", as you put it is buying loaners. I have spoken with a few people who have just recently placed factory orders. I did see one buy a loaner.

Yes I agree a bit of an exaggeration, but it was based on the sudden sell out at this service center. It's like they somehow triggered / encouraged/pushed everyone to see if any loaners would be sufficient first. Again, I wonder how they did this "end of quarter push to sell out the loaners".

 

[brandonmbeard]

It's going to be very hard for them to keep current on their loaner fleet. Think about the numbers they have 22K model s in the wild so far and will continue to produce them at a rate close to 500 a week.

If they had one loaner available every day for each person that could potentially need annual service that would require 60 loaner vehicles in the fleet. Add in the random service calls and that goes to about 90. Once we hit 50K model s in the wild that number is closer to 175 loaner vehicles. As tesla sells more vehicles the number of loaner vehicles must grow as well. Since Tesla service centers are owned by Tesla and not independent dealers, that means Tesla has the liability of all that inventory of loaner vehicles. So while I love and would hate to see the valet program go away. I do home a few minor concerns about how it will scale and the availability of it in the future.

 

[JakeP]

Just out of curiosity, has anyone actually had the Valet Service yet, where a loaner was brought to your home, they took your vehicle in for service, and brought it back when finished? If so, please indicate where you are located, and your approximate distance to the service center. As opposed to dropping your car off at a service center, and driving away with a loaner.

 

[Doug_G]

Just out of curiosity, has anyone actually had the Valet Service yet, where a loaner was brought to your home, they took your vehicle in for service, and brought it back when finished? If so, please indicate where you are located, and your approximate distance to the service center. As opposed to dropping your car off at a service center, and driving away with a loaner.

Yes. I'm in Ottawa, Ontario and the service center is 451 km (282 miles) away in Toronto. They brought me a black P85+ loaner, which I kept for a few days before they returned and swapped back again. (Was fun driving the + !)

 

[rogbmw]

Just out of curiosity, has anyone actually had the Valet Service yet, where a loaner was brought to your home, they took your vehicle in for service, and brought it back when finished? If so, please indicate where you are located, and your approximate distance to the service center. As opposed to dropping your car off at a service center, and driving away with a loaner.

I live about a hundred miles from the Tampa service center, and they brought me a P85+ loaner when they serviced our S85. Great guys and service from them. Had my car back in 2 days.