D-Day for Tesla

It’s the end of the beginning for Tesla CEO Elon Musk.

He is launching the Model 3 electric car in two weeks. Musk’s plan to revolutionise global energy supply hinges on this moment. His vision must now explode outwards from wealthy patrons to the mass market.

That explosion could be the beginning of the end for the internal combustion engine, or it could be the beginning of the end for Tesla. Much depends on the reputation of the Model 3.

The Model 3 is the first Tesla that will go to a broad audience beyond the forgiving early adopters and there are legitimate concerns about whether quality will be good enough.

So far, each model of Tesla has had at least one recall. The Roadster was recalled for the wiring. The Model X had a recall for the parking brake. The Model S was recalled for seatbelts, airbags and parking brake.

But these were relatively small recalls because they were small runs of cars. The customers understood that they were getting cars that would be imperfect. A recall on the Model 3 would be a much bigger affair. Tesla is planning to sell hundreds of thousands of them each year.

As Ford has found just this year, recalls can cost hundreds of millions and erode your profits. Not that Tesla has profits to erode.

Recalls cost companies threefold.

Not only do they have to pay for the parts and the labour of the repair, but they suffer from brand damage and from a possible reduction in future sales.

That reputational risk is the main reason Tesla needs to deliver Model 3s that don’t fail.

– NZ Herald

It’s the end of the beginning for Tesla CEO Elon Musk.

He is launching the Model 3 electric car in two weeks. Musk’s plan to revolutionise global energy supply hinges on this moment. His vision must now explode outwards from wealthy patrons to the mass market.

That explosion could be the beginning of the end for the internal combustion engine, or it could be the beginning of the end for Tesla. Much depends on the reputation of the Model 3.

The Model 3 is the first Tesla that will go to a broad audience beyond the forgiving early adopters and there are legitimate concerns about whether quality will be good enough.

So far, each model of Tesla has had at least one recall. The Roadster was recalled for the wiring. The Model X had a recall for the parking brake. The Model S was recalled for seatbelts, airbags and parking brake.

But these were relatively small recalls because they were small runs of cars. The customers understood that they were getting cars that would be imperfect. A recall on the Model 3 would be a much bigger affair. Tesla is planning to sell hundreds of thousands of them each year.

As Ford has found just this year, recalls can cost hundreds of millions and erode your profits. Not that Tesla has profits to erode.

Recalls cost companies threefold.

Not only do they have to pay for the parts and the labour of the repair, but they suffer from brand damage and from a possible reduction in future sales.

That reputational risk is the main reason Tesla needs to deliver Model 3s that don’t fail.

– NZ Herald

Your email address will not be published. Comments will display after being approved by a staff member. Comments may be edited for clarity.

Bill Hambidge - 1 month ago
Elon Musk is such a visionary. He has virtually single-handedly transformed both the electric car industry and the battery industry. It would be a tragedy should his efforts to bring an electric car within reach of the average car owner be stymied at this stage. Even more important is his new e-truck. We desperately need big emissions reductions in the commercial vehicle fleets. So many trucks do short runs and pump out filthy diesel fumes - witness logging trucks to and from the port.

Poll

  • Voting please wait...
    Your vote has been cast. Reloading page...
    The region’s roads are in a bad state and need greater investment. What options would you prefer to increase the amount of local money committed to roading?

    Choose in order of preference, selecting just the options you think are worth considering and rate your preferred option as 1, next 2, etc.

    See also:
    Roading crisis ‘too big’, August 11 lead story

    Select multiple options. Press 'Clear' button to start over.
    Clear