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Tesla's Goodwill

Discussion in 'Tesla, Inc.' started by alexvo, May 8, 2018.

  1. alexvo

    alexvo Member

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    I purchased my S85 used earlier this year and after many months of searching for a CPO, I found the better deal on craigslist which was partly due to being out of warranty. After doing extensive research on all of the things that can go wrong with the Model S, I was honestly terrified but decided to take the risk anyways. I even looked into trying to add an extended warranty with the Fremont Service Center but do to the previous 50k mile warranty expiring, I didn't have that option anymore.

    So far, I have been to the Service Center on 3 separate occasions with 8 different repairs and every time I receive the dreaded invoice, I am always pleasantly surprised by all of the repairs and installs being done in "Goodwill." And on top of this, I get a complimentary Tesla rental while my car is in service? I have owned cars ranging from Honda's to BMW's/ Mercedes and I have never heard of any "dealership" offering this kind of service outside of warranty. This post is to not only to show my pride in being a part of such an amazing company but I hope to also reassure all of those who are on the fence about purchasing any used Tesla's outside of warranty.

    I understand that I only speak of my experience with the service center in Fremont and my repairs have been nothing major other than a drive unit replacement under warranty. But so far, I can't speak highly enough of the service I have received so far in my short period of owning my Model S. To end, below is a list of repairs done so far:

    -Install rear cup holders I also found on craigslist - Goodwill
    -Realign front hood not properly lining up with the bumper - Goodwill
    -Passenger window not rolling up completely - Regulator replaced under Goodwill
    -Rear windows not rolling up completely - Regulators replaced in Goodwill
    -Door handle LED lights shining brighter on Driver's side. -Passenger side repaired in Goodwill
    -Wind noise caused by tear in rubber seal on passenger window - Replaced in Goodwill
    -Replace bolts in steering wheel - Recall
    -Drive unit making "milling noise" - Replaced under Warranty and so much quieter now
     
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  2. XxCyberHackerxX

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    That’s great to hear! It warms my heart to hear stories like this
     
  3. Reality

    Reality Member

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    I would say there is a very significant chance that you are a benefaciary of Tesla's attempts to keep warranty costs down.


    I will explain further. If they label it as "goodwill" they can shove the costs down into SGA, whereas if it goes as a warranty cost, then that costs are used in the warranty calculation which is extrapolated over all sales and added to COGS (which would decrease the ever precious Auto margins that Tesla artificially inflates). An SGA cost is just a one time when incurred cost.

    So what that means is for all the people who would have these things fixed under warranty, Tesla calls them goodwill repairs. THe downside for Tesla of this is they can't just say every repair under warranty is a goodwill repair and charge the ones not under warranty full price. Because that would be a) difficult and b) bordering on fraud.


    Given most tesla's are under warranty, people in your situation are few and far between.


    Long story short, they arent being nice to you, Tesla NEEDS its incredibly high service costs for warranties to look smaller to avoid a larger COGS. The way they do this is to call all repairs under these warranties goodwill.


    Fwiw, this is not illegal or anything I don't think, I am just explaining why a cash strapped company seems to be so kind to you, and the answer is that it is self-serving for them to do so given how their stock is valued.


    Pretty cool you arent getting charged tho!
     
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  4. somnambule

    somnambule Member

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    This explanation doesn't make any sense to me. If Tesla wanted to do these sorts of things under "goodwill" for cars under warranty, why would that prevent them from charging customers for vehicles out of warranty?

    I have had panel alignments done under warranty and they were covered under warranty, not as "goodwill".
     
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  5. Icer

    Icer Member

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    This accusation is they are hiding warranty repairs.

    OPs car is not under warranty.
     
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  6. ggr

    ggr Roadster R80 537, SigS P85 29, M3P 80k

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    Your supposition is simply false. I have service invoices that show warranty for some things and goodwill for others. Since the car is now out of warranty, I have still received some things as goodwill. They don't just call relabel things.
     
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  7. Reality

    Reality Member

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    I should say it would go under "Service center costs" more likely than SGA.


    Also, not saying this is 100% happening, but it is possible. It's not wrong to say "all fixing of broken lugnuts should be considered goodwill repairs regardless of whether or not a warranty is in place". Then charge expense to the service center. In my limited understanding, that is completely fine and acceptable accounting.


    Has anyone ever had something that should have been under warranty but was labeled as goodwill?


    If not, then ignore my post as i am wrong.
     
  8. Icer

    Icer Member

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    Yeah, a lot. People respond very positively to it.
    I would substitute "could" there.
    The point to me is Tesla is taking care of the folks.

    Montana Skeptic first derived the theory
    after reading about "goodwill" here.
    After attributing his standard assumed evil intent.

    Well, someone else may have been first,
    but that is how I became aware of it.
    *
    Crazy, but being a fan of Elon and Tesla
    has forced me to learn accounting.

    I always hated accounting.
    Still do.

    "Elon's Fault"
    ;)
     
  9. ShortSeller

    ShortSeller Banned

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    Yes, posting these costs as “goodwill” allow an artificially high gross margin calculation. This is why the “Services and Other” segment loses more money as cars delivered increases.

    FWIW - I think it’s interesting but doesn’t really affect my short thesis. The more cars they sell, the more they lose, whether you call it warranty or goodwill makes no difference.
     
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  10. Electroman

    Electroman Well-Known Member

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    His car is not under warranty, and hence those items are under Goodwill. If it was under warranty and still marked as Goodwill, I understand the fudging. I am not understanding what is the accounting shenanigan that the shorters are seeing here? This is exactly what my Lexus dealer did when they fixed an item just 500 miles after my warranty expired.

    Remember - there is no real increase in labor costs for many of these items, because these are done by Tesla employees whose costs don't vary by how many items are marked as goodwill. Different from traditional dealers who perhaps would charge the manufacturers.
     
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  11. alexvo

    alexvo Member

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    Whoa, I didn't expect this thread to go this direction. :)

    I can't say I'm familiar with Tesla's accounting process but what I am familiar with is the service I have received in the past from Honda, Mercedes, BMW dealerships and being someone who never purchased a warranty, let's just say that have never walked away from any of these dealerships with an invoice that came out to $0.00. And I have never been offered complimentary rental cars during repairs. Hence the reason why I had to share about Tesla's "Goodwill" which was a nice surprise to see that they offered this kind of service even to those without a warranty.
     
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  12. alexvo

    alexvo Member

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    Just wanted to give an update and say that I recently took my car in to update the 3G internet to LTE and had a few other services that was done in Goodwill. The upgrade even came out cheaper than what I was expecting.

    Updated 3G to LTE - The LTE upgrade is no longer $500 but dropped to $362. (Very nice surprise)
    Seals in Pano roof loose and leaked slightly - repairs in Goodwill
    Rear Door handles not pressing when pushed on - Motors replaced in Goodwill
    Driver side repeater got scratched while I was cleaning it (completely my fault) - Quoted for $80 but this was waived in... you guessed it... Goodwill.
     
  13. Electroman

    Electroman Well-Known Member

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    Does that mean that you car is out of warranty?
     
  14. alexvo

    alexvo Member

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    Yes, I never had a warranty since I bought it used and non CPO.
     
  15. Barklikeadog

    Barklikeadog Banned

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    Good for you... But I have to agree with the above analysis... Shenanigans. A company that desperately needs cash is refusing yours. Does it make sense? No. Ok why not? It is a shell game like spending customer deposits on operating b activities or counting lease guarantees
     

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