Thu | Aug 17, 2017

Tesla adding service centres as Model 3 goes on sale

Published:Wednesday | July 12, 2017 | 7:00 AM

Electric carmaker Tesla is expanding its service operations and hiring more than 1,000 technicians to meet expected demand for its new Model 3 sedan.

The Model 3, cheaper than Tesla's existing cars, goes on sale this month and is expected to attract hundreds of thousands of new customers to the brand.

To accommodate them, the company is adding 100 new service centres worldwide over the next year, bringing its total number of service centres to 250. The new service centres will be in areas that have the most reservation-holders for the Model 3.

Tesla is also adding 350 vans to its mobile service fleet, mostly in the United States. The vans go to owners' homes or offices and repair their cars while they wait, typically for about one hour. The vans are equipped with tools and replacement parts as well as an espresso machine, snacks and kids' toys.

Until now, Tesla had around 30 mobile repair vans, which were used mostly in cases where the owner lived too far from a service centre. About six months ago, the company began deploying the vans in the San Francisco area in order to ease the burden on its service centres and see if they could help meet anticipated demand for the Model 3. Customers were happy with the new arrangement, so the company decided to roll out mobile service in more locations.

At a starting price of US$35,000, the Model 3 is about half the cost of Tesla's two other models. Tesla hasn't said how many people hold refundable, US$1,000 reservations for the car. It has said it expects to make 500,000 vehicles in 2018, up from 84,000 last year.

Like its stores, which are owned by the company and not by franchised dealers, Tesla has upended the auto industry with its service model. Tesla CEO Elon Musk said several years ago that unlike traditional dealerships, Tesla didn't intend to make a profit on service and repairs. US dealers made US$110 billion in service and parts sales last year, according to the National Automobile Dealers Association.

Tesla said it's charging the same amount for non-warranty repairs done at service centres or through mobile vans. It hasn't released details on the warranty plan for the Model 3, so it's not yet clear if it will match Tesla's other vehicles. The Model S and Model X have a four-year, 50,000-mile vehicle warranty and an eight-year battery warranty with unlimited miles.

Unlike traditional dealers, Tesla also doesn't want customers to have to go to a service centre for repairs that can be done remotely. The company says 80 per cent of repairs to its cars, including replacing the tires or fixing electronic glitches, can be done without a lift, which means it's just as easy to perform them out of a mobile repair van. That leaves service centres free to concentrate on more complicated repairs that require a lift, like motor or battery problems.

Tesla is hiring 1,400 new service technicians this year to staff the service centres and mobile repair vans.

- AP