In the This May or May Not Be Big News category comes a report from Teslarati via commentary by General Motors President Mark Reuss at the company’s 2022 Investor Day on November 17. He said GM service departments have now repaired more than 11,000 Teslas. “This is a growing business for us. I have to say it’s a new business,” said Reuss.
That’s it. That’s the news. But what to make of it? That’s where it gets tricky. Reuss pointed out that 90% of Americans live within 10 miles of a GM dealership. Many of these shops have technicians trained to service the Chevy Volt PHEV and Chevy Bolt BEV, so it’s not like they’ve never seen an electric car before.
Tesla has its own service centers, of course, but many are hundreds of miles away, getting appointments is sometimes difficult, and there are complaints about the high cost of repairs. Tesla also has mobile repair technicians who come to customers to perform minor repairs. Overall, service can be the weak link in the Tesla experience, and while Elon Musk says he personally devotes time to improving the service experience, one has to wonder how much time he can devote to this issue given the Twitter debacle explodes around him.
There is subtle irony here too. It is well known that service revenue is the lifeblood of many car dealerships. They don’t make their living selling cars. They earn their money by servicing cars, arranging financing and selling accessories such as extended warranties, alarm systems, paint sealing, wheel nuts and floor mats. It’s similar to Kodak’s business model of practically giving away cameras so they can develop whatever photos people took with them.
Part of the Tesla culture is a deep-seated dislike of dealers. The feeling is mutual. Tesla is still banned from selling its cars directly online in several states, thanks to dealership franchise laws. General Motors has aggressively defended these laws to curb Tesla and its disruption of the automotive business model that has been an integral part of American culture for generations.
There is another aspect to this. Service customers can stroll through the showroom and walk the used car line. It’s not uncommon for someone to drive by for service and drive out in another vehicle. Some of the most experienced (and successful) salespeople serve service customers. When someone offers you the opportunity to get out of your 3 year old vehicle and into a brand new vehicle for little or no money a month, the appeal to make the switch is strong.
General Motors is in the process of intensifying its electric car business. Could there be interest in a Tesla owner browsing their EV listings while waiting for their car to be serviced? Oh you bet!
take that away
The subtext here is that Tesla has been very much in “walking around breaking things” Silicon Valley mode since its inception. Many Tesla owners are satisfied knowing they’re sticking with traditional dealerships. Mark Reuss and his Detroit colleagues would never admit it, but there are a lot of bad feelings about car dealerships out there, which is why many derisively refer to them as “stealerships.”
With Elon Musk busy building new factories and ramping up production to 10 million new cars a year (or more), is there a chance Tesla will overtake on the service front? If so, General Motors dealers — and others, too — could find a lucrative new niche catering to Teslas for people who prefer to do business locally. Would that be all? No of course not. But people like choices, and if you own a Tesla, you have very few of them right now when you need service.
This is a whole new opportunity opening up for traders everywhere. There is also a large network of franchised auto repair companies like Pep Boys and Midas that could be moving into this space. Statistics show that the vast majority of new car buyers choose a dealership that is close to where they live and work. One wonders if the great and powerful Musk fully appreciates this dynamic.
jalopnik says: “This is a big deal for both GM and Tesla customers. Not only does it give GM the ability to look at the intervals of a competing automaker’s product and learn from it, it also gives Tesla customers easier access to services that are sometimes hard to find.” And so it is.
Do you appreciate CleanTechnica’s originality and coverage of CleanTechnica? Consider becoming a CleanTechnica Member, Supporter, Technician, or Ambassador—or a Patron on Patreon.
Don’t want to miss a cleantech story? Sign up for daily CleanTechnica news updates via email. Or follow us on Google News!
Do you have a tip for CleanTechnica, would you like to advertise or suggest a guest for our CleanTech Talk Podcast? Contact us here.