Tesla Service, From Nirvana to Gehenna
When it comes to customers, as with short shorts, Elon prefers "Boxers"
Thank you for your patience, readers!
It’s been an eventful few weeks, one highlight of which was guesting on episode 47 of the ChartCast with TC & Georgia. Big thanks to the whole team, which includes intro/outro virtuoso Tesla Polls and Evac Boy, who autotuned me into sounding human. (They’re the less-heralded George Harrison and Ringo Starr of the quartet.)
The other major highlight was InsideEVs.com running my op-ed on Tesla being Animal Farm. It was immediately followed by the lowlight that many readers didn’t register the ironic tone. If you haven’t seen it yet, imagine it being spoken by, oh, Gore Vidal.
The Animal Farm op-ed noted that Elon Musk was at best the “third man in” at Tesla, and offered the blithe comfort that Caligula proved that the “third man in” could still dent the universe. He’s indisputably more famous, and looms larger in the public imagination, than Augustus -- who has a month of the year named after him -- and Tiberius, during whose reign Jesus was crucified.
Anyone can name-drop Caligula, so before proceeding to Tesla, let me flex erudition and argue $TSLAQ itself is like the “third man in” from the Flavian dynasty.
The Emperor Domitian reigned from 81 to 96. Generally popular with the people and the troops, he was hated by the Roman Senate -- whose friends wrote the history books. That’s how we get stories about Domitian spending his days in the palace stabbing flies. He would have probably been accused of incest, but his only sister died when he was young. (Romans shrieked “incest” about their enemies as indiscriminately as Tesla fans cry “short-seller” in the face of legitimate criticism. Caligula was probably marginally less of a monster than most people think. Marginally.)
Most of what was written about Domitian was unrelentingly hostile, but scholars have recently vindicated him as a competent Emperor and efficient autocrat -- the Lee Kuan Yew of his day. Domitian had the revolutionary ideas of promoting men based on merit and attacking corruption. This enraged Senators, for whom nepotism and graft were sacrosanct.
Two things then happened. One, Domitian’s reputation was buried for about 19 centuries. Two, merit-based promotion led to competent bureaucracy across the Roman Empire, which reached its zenith with the next five emperors. No Domitian, no Golden Age of the Antonines: it’s that stark.
(Sound money fans: Domitian even increased the silver content of Roman coins. What’s not to love? Well, apart from the terrifying violence of an absolute monarch who’d survived a coup attempt and expected others.)
$TSLAQ resembles Domitian in that it faces full-spectrum hostility for demanding higher standards. Many earnest people shrug off Tesla’s abuses -- documented, ongoing abuses -- on the basis that it’s one of the “good guys”. This is no different from Senators, ancient or contemporary, winking away incompetence and corruption because those involved were family or friends.
It won’t take 1900 years to vindicate $TSLAQ, but whenever it is that standards get raised -- for financial disclosures, product claims, Board independence, enforcement of laws and regulations, and other dimensions of business -- it will usher in a new Golden Age for markets. Even as a leftist, I’ve got to believe it’s easier to efficiently allocate capital when there’s market transparency and laws are predictably applied. Investors shouldn’t have to calculate DTF (Discounted Truth Flow) when preparing financial models.
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Today’s EV Farm update relates to customer service, because a week after the aforementioned “Tesla as Animal Farm” op-ed in InsideEVs.com, Tesla shared its intent to open a service center per week in 2021.
Fans with goldfish memories probably rejoiced. A little learning is a dangerous thing.
But the elephants among us know the ritual. Drink deep, or taste not the Pierian spring.
Opening 50 service centers in 2021 sounds impressive, unless you know Tesla opened 25 service centers in Q2 2019. That’s a rate of 100 service centers per year. So Tesla’s response to terrible customer service was to announce rollout slower than they’d executed before -- and trust that the goldfish wouldn’t notice.
To appreciate how customers are sashimi on the altar to Elon’s enrichment, we need to drive down memory lane. I’ve skipped more stories than “Full Self Driving” has missed stopped objects, so as you come across interesting others, I’ll gladly fold them in with credit.
2012 10 22 - Elon Musk closes the penultimate paragraph of a Tesla blog post declaring that “Service is a top priority at Tesla and always will be.” Uh huh.
2015 11 10 - David Noland, a Tesla-owning contributor to GreenCarReports, notes that Tesla’s service Nirvana is gone. Utopias are elusive, and this one disappeared somewhere in 2014 or 2015, at a time when there were about 600 Teslas per service centre. Early Christians used “Gehenna” to describe a punitive hell, and the word kind of rhymes with Nirvana, so I slotted it in today’s newsletter title.
2016 12 - update from David Noland. Service -- which is a top priority at Tesla and always will be -- has gotten worse. Tesla is refusing to increase service spending commensurate with sales.
2017 07 - Tesla announces it’ll build 100 new service centers to triple service capacity! We meet, maybe for the first time, the evergreen talking point that Tesla is rethinking service to be more efficient -- a fancy way of conditioning victims to expect Tesla spending on service would only increase a little, while promising that service would actually improve a lot. 🤨
Since then, Tesla’s thousands of service employees have doubled as human shields protecting Elon from the abuse of understandably-irate customers. You never want to call a game early, but Musk’s Quick Seamless Service has been a triomphe nonpareil on par with Mao’s Great Leap Forward.
2018 09 - Musk blames third-party repair shops (and not first-party indifference) for repair delays, tweeting that Tesla is bringing collision repairs in-house. Perhaps he got around to reading Mr. Noland’s piece from 21 months before? Or the one from 13 months before that?
2018 10 - in an announcement befitting Renaldus Columbus -- look it up, but not from your work computer -- Musk says he’s discovered gaps in Tesla’s service. Service, which had been a top priority at Tesla in 2012, and always would be. Mm hmm.
2019 01 - Tesla promised that improving customer service was now a top priority. Again. They were going to increase their 378 service centers, and they meant it this time! Why, if they added one per week over the next 21 months there would be about 378 + 52 + 39 = 469 service centers by the 29th of October 2020.
Tesla gamely suggested that they could promise much better service without much more spending, by moving certain garages to two-shift operations. As if any company could insist service was a top priority and always would be -- while keeping banker’s hours. Many fans no doubt believed this, not wanting to think the company cared much less about them, than their prior automotive OEM. There’s a victim born every minute…
2019 03 - Tesla announces it’s eliminating annual maintenance visits. Given the timing, it’s a laughably-transparent effort to reduce its service backlog without actually spending more money on customers. Like Musk’s waiving of a safety-critical brake test for new Model 3’s in mid-2018, at exactly the moment Tesla was struggling to scale up [checks notes] … Model 3 production. Tesla stans went through writer Linette Lopez’ Facebook account after that story.
2019 09 - Electrek reports that Tesla is now expanding service “at max speed”. It sounds as if the company has opened about 30 service centers in Q2, pulling Q3 costs forward. Almost as if there was some sort of … financial milestone Tesla was trying to reach in Q3 2019 that caused it to prioritize the stock price (and thus Elon Musk’s net worth) over customer service. Which, as we all know, has been a top priority since 2012, and always would be.
2020 10 - on the 29th of October 2020, Electrek premasticated some Tesla talking points to its readership about the company’s renewed focus on customer service. It would add to its 466 service centers by opening about 50 service centers in 2021, one per week. You know, the same pace as the past two years, and not one service center more.
Basically, Tesla deceived Electrek into spinning the continuation of its one-a-week service center policy ... as a renewed commitment to service. [chef’s kiss emoji] Regulatory capture often comes up in conversations about Tesla, but customer capture is equally important.
Commercial break: forward this newsletter to your friends, and challenge them to read it through without a dictionary! And if you *are* one of those lucky friends, sign up to follow along as we explore Tesla’s arc of darkness. You can also follow me on the Twitter.
The best Animal Farm parallel to the above is how the pigs warn Boxer -- the hard-working horse -- that farmer Jones will boil him down when he’s no longer needed. Which is what they wind up doing, buying whisky with the money. (Tesla Tequila anyone?)
The lower animals lapped up the lie that Boxer had been picked up by a veterinarian who’d bought a knacker’s van but hadn’t yet had the time to paint over the “Horse Slaughterer” lettering. Sort of like how Musk insists his Marie Antoinette-scale bonus payouts aren’t actually for himself, but for Mars.
“You, Boxer, the very day that those great muscles of yours lose their power, Jones will sell you to the knacker, who will cut your throat and boil you down for the foxhounds.”
The story of Electric Vehicle Farm kicks off with Elon Musk condemning the mistreatment of car owners by the old order of franchised dealerships and independent garages, whose financial interests diverge from customers’. Tesla would treat its customers better, because reasons, and things started off magnificently.
But honeymoons never last, and Musk’s financial interests now diverge 180 degrees from customers’: billions of dollars in shareholder-diluting ego money now depend on limiting service spending so Tesla hits EBITDA targets and Musk collects cheques.
This even extends to safety. If Tesla needs to blame customers to avoid performing a recall: it will, it does, and it repeatedly has.
Remember how, when China ordered Tesla to replace 48,442 potentially faulty and and unsafe rear and front suspensions in Model S and X vehicles, it blamed Chinese drivers? (Emphasis mine.)
“driver usage and expectation for damageability is uniquely severe in the China market. If the customer inputs an abuse load (e.g., curb impact, severe pothole strike, etc.), then the parts may be damaged, leading either to immediate failure or delayed failure from the compounding effects of the initial abuse and subsequent load input.
When a US customer had reported a suspension problem in April 2016, Tesla blamed him too. (Emphasis mine again.)
In its statement, Tesla said the car’s suspension ball joint showed “very abnormal rust” and it had not seen such wear on any other Tesla. The company added that “its owner lives down such a long dirt road that it required two tow trucks to retrieve the car.”
But Cordaro lives on a paved road, in an established suburban neighborhood in Connellsville, Pa. Online property records confirmed his home address. Cordaro said he never abused the car or drove more than a total of a 100 miles on unpaved roads. “Why didn’t they Google-Earth me?” he said. “They have my address.”
Tesla watchers know this as the incident that led to Ed Niedermeyer’s discovery that Tesla had arranged for select customers to sign NDA’s after receiving suspension repairs, which led to Musk personally slandering Niedermeyer in a blog post with innuendo as inaccurate as the deliberate-lie-or-inexcusable-falsehood about their own customer Cardero’s place of living. When you’re rich and powerful, quid est veritas?
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The next instalment of EV Farm should be out in a couple weeks’ time, with a regular cadence going forward. Until then just remember Animal Farm’s porcine parallel in Elon Musk’s willingness to send customers to the glue factory, when it comes service specifically, or responsibility generally.