Tesla's transformation of automobile service stumbles in Massachussetts
Tesla Motors is a disruptor, a company that is disrupting the "normal" pattern of automobile manufacturers and car dealerships. Tesla does pretty much everything differently from all the other manufacturers, it sells cars directly, it's showrooms are really education centers, and service is handled through regional service centers rather than the back half of the dealership building. In a blog post yesterday, Tesla's Joost de Vries explained how Tesla is "transforming automobile service" but the Tesla Way is not being met with open arms in all quarters.
De Vries started by explaining that the Tesla Model S was designed from the ground up, re-imagining what a car should be. One aspect of this was to redesign the process of servicing an automobile. He wrote: "Now that Model S is on the road, we are bringing 21st century service to our customers as well. First, forget everything you know about service at a traditional dealership. This is different. We specifically designed Tesla Service around the advantages and opportunities made possible by Model S."
First, because Tesla knows where the Model S registrations are located the company can locate regional service centers based on the density of Model S deliveries. By March 1, 2013, over 90% of Tesla Model S owners will be within 100 miles of a regional service center.
The normal pattern is that each car dealership has a service shop in the rear of the building, and there are an extensive array of 3rd party service businesses. Tesla does away with this in two ways. First, are the regional service centers, and second are mobile technicians called "Tesla Rangers" who can come directly to the home or office and perform many kinds of services on the spot.
Second, the Tesla Model S is designed as a low-maintenance vehicle. Some of this is inherent to electric vehicles, as these cars simply have fewer moving parts and less opportunity for failures. No spark plugs, timing belts or oil filters to replace, no smog checks, and the only oil to change is in the transmission and should last for 12 years. There is an annual inspection during which the technician will do a complete inspection and adjustment of anything which needs adjusting, or replacing consumable parts like brake pads.
Third, the Tesla Model S is constantly running diagnostics, sending information to Tesla's central computers. From there the service department can send notifications about issues.
Fourth, the Tesla Model S software is designed to update itself remotely via the car's built-in Internet connection. This can be used to fix bugs in the software, or even to add new features to the Model S.
This business model is different from business-as-usual as it is practiced in the car business. In business-as-usual parts and service are a big part of the profit structure of the whole automobile industry.
In some places Tesla's different model is meeting some legal resistance from towns in which Tesla wishes to set up show-rooms. An example is Tesla's planned location at the Natick Mall, in Natick MA. Tesla sets up show-rooms in normal shopping malls, so that you might have a Tesla Store next to the Jamba Juice in the Mall. That fact alone flies in the face of business-as-usual, because the typical pattern for a car dealership is that the dealership is an independent business, with a large stock of cars on the lot, a side lot with a large stock of used cars, facilities for conducting test drives, and a dealership in the back. A store front in a shopping mall has no room for any of these things.
According to a report in the July 20 MetroWestDailyNews, Natick's Selectmen had issued a business license for Tesla in May, but then the Massachusetts State Automobile Dealers Association and several Natick dealerships stepped in saying "it was not clear if Tesla meets several license requirements, including having a service center near the Natick Mall." Tesla has a lease on property in Watertown for a regional service center, but the MSADA attorney questions whether that is too far away noting that 90-95% of car dealerships have on-site service shops.
A recent Massachusetts law also places an interesting twist on Tesla's story about Transformaing Automotive Service. The "Right to Repair Law," signed into law in August by Gov. Patrick requires auto manufacturers to sell diagnostic and safety information required to service automobiles. This way car owners can repair their own cars, or can otherwise bring their car to the repair shop of their choosing. Clearly Tesla's "we'll take care of you" stance is going to run afoul of the Right to Repair law.
They say you can tell who the pioneers are from the arrows sticking out of their backs. Indeed.