Taking Tesla Private

Production Hell, Delivery Hell, What The Hell Is Next For Tesla?

Service hell.  Though it might be more hell for owners than for Tesla.  Tesla reported a 3rd quarter profit ather the market closed today and the stock has sky-rocketed again.  The company showed that it can produce the Model 3 in meaningful volume at margins of 20% (as long as the cars are sold for a minimu of $46,000).  The problem is that as all these added cars roll out, they will all have to be serviced.  In fact, the new Model 3s may need more service than the S or X given the race to produce them.

Q3 hedge fund letters, conference, scoops etc

Taking Tesla Private

Free-Photos / Pixabay

As the owner of an S (in fact I have owned three of them), I am dreading service hell.  Recently a light came on in my car saying that my suspension needed service.  My initial call to Tesla went unanswered.  Fortunately, the light went out.  Next time I may not be so lucky.  With limited servicen centers, no third party service outlets, and a lot of new Model 3s on the road, customers may be about to enter service hell.  What it means for the stock price is another question.

Article by Brad Cornell’s Economics Blog


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