Tesla’s Commitment To Being Great

April 28th, 2013 by Zachary Shahan

It’s a real pleasure listening to Elon Musk talk. There’s a humility there, a strong sense of responsibility, a desire to do what is right. There is also a clear faith that doing what is right will pay off in the end in business terms, as well.

In the latest Tesla conference call (Friday’s call), Elon’s focus was on the fact that Tesla’s warranty would cover everything that might happen to a Model S owner’s car… beyond a physical accident or someone blowtorching the battery or “taking it out for shooting practice.”

Furthermore, as we reported previously, Tesla will now supply owners with a fully loaded Model S (probably better than their own car) whenever they take their car in.

Additionally, he noted the valet service the company is now offering — that the company will pick an owner up and drop him off when they bring the car in for service.

Also, correcting a “mistake” Tesla made, owners are not required to bring their cars in for an annual checkup in order to maintain their warranty. (Originally, this was a requirement.) As stated above, he put a lot of emphasis on the point that the warranty covers everything because he doesn’t want customers to worry about anything going wrong, or even doing anything wrong — of course, special emphasis was placed on the battery in this portion of the call. Elon said several times that an owner doesn’t need to read the manual, the user’s guide. He noted that any product that needs a user’s guide is a broken product.

There was a lot of questioning about whether or not these announcements were all in response to something, to unhappy customers or customer surveys. That didn’t seem to be the case, according to Musk — the main impetus was simply that Tesla thought about its service offerings from the customer’s perspective, and tried to deliver what any customer would want or expect. Elon noted repeatedly that the company didn’t want to just offer a good or okay service — it wanted to offer a great service. He wants everything to company offers to be great.

All the same policies will also apply with the Model X. However, for the next model Tesla plans to offer (which should be coming by 2017), Musk said that the company may need to unbundle some of these services, since the goal will be offering a truly affordable, mass market car.

All in all, it seems to me that Musk, and Tesla as a whole, aim to simply offer the best product and services they can.

Oh yeah, in addition to all of the above, Musk said that contrary to how automobile companies run their service centers (which he says is simply “wrong,” bad), the directive at all of Tesla’s service centers is to not overcharge — to not make a loss, but to also not make a profit. Auto companies are notorious for overcharging, and Elon doesn’t want Tesla to fall into that boat. Naturally, he thinks that this policy will help the company in the long run, will generate more return customers. When he was talking about that topic, I think one could see as clearly as ever that Elon doesn’t think as a businessman and then as a human and then try to integrate the two — he thinks as a human who is a businessman, in an integrated way. In my opinion, at least, his first goal seems to be servicing humanity, and his reasoning afterwards leads him to believe that his decisions also make good business sense. If more companies were run by such people, we’d have a much more efficient and socially beneficial marketplace.

This article was originally published on EV Obsession.

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Tags: Elon Musk, no post, Tesla, Tesla Model S, Tesla Model S guarantee, Tesla Model S warranty

About the Author

Zachary Shahan spends most of his time here on CleanTechnica as the director/chief editor. Otherwise, he's probably enthusiastically fulfilling his duties as the director/editor of Solar Love, EV Obsession, Planetsave, or Bikocity. Zach is recognized globally as a solar energy, electric car, and wind energy expert. If you would like him to speak at a related conference or event, connect with him via social media. You can connect with Zach on any popular social networking site you like. Links to all of his main social media profiles are on ZacharyShahan.com.

arne-nl

I also see a ‘dark side’ to the Elon person. Someone who is not very humble, but wants to prove himself right and others wrong. In the case of Tesla, he wants to prove that the established car culture is wrong in saying that EV’s aren’t any good. He wants to win (and I very much want him to win!).

How he handled any attacks on his Tesla baby by Max Drucker, Henrik Fisker, Jeremy Clarkson, John Broder was not always very elegant, and I felt a strong desire (sometimes too strong imho) to put them in their place, prove them wrong.
- Bob_Wallace
  
  Being a strong advocate of your ideas doesn’t qualify someone as having a “dark side”, IMO.
  
  Clarkson and Broder were dishonest and damaged Tesla with their dishonesty.
  
  I don’t know the Durcker and Fisker stories except for the fact that Fisker is apparently a car designer who thought he had a better idea about what the ‘guts’ of the Tesla should be. Musk did not want to build a hybrid.
  - http://zacharyshahan.com/ Zachary Shahan
    
    I haven’t followed much with Fisker vs Tesla, but my impression was that Kisker was simply trying to carve out a piece of the market… unsuccessfully.
    
    Drucker: again, haven’t followed closely, but the issue seems to come down to whether or not Tesla made it very clear to owners that they couldn’t leave the car uncharged for a long period of time.
    - Bob_Wallace
      
      Oh, Drucker. The guy who drove his Porsche with no oil in the crankcase even though the owners manual said to check the oil from time to time.
      
      No, …. He was the guy who parked his Tesla with the batteries flat and went away for a few weeks even though the owners manual said to charge the batteries for not driving the car for an extended period.
http://www.facebook.com/rob.ryan.560 Rob Ryan

Sadly (speaking as a capitalist but partner in a closely held private corporation), bussdriver78 is right. In today’s environment (taking an extreme example) wait until Carl Icahn buys 5.5% and see how long Musk’s absolutely admirable ethic lasts.
- http://www.facebook.com/jhildenminton James Hilden-Minton
  
  I’m not so sure I buy that. What Musk is doing is building a brand. A brand is promise to be a certain sort of company for the customer. If customers buy into that brand and whatit stands for, then it will last and be profitable.If a company shrinks from a strong brand promise, if it does not deliver on that promise, then it will lose customers and destroy shareholder value. What if Starbucks were to begin to use the cheapest beans they could find? What if Wal-Mart decided not to be the low cost leader? In either case those companies would damage their respective brands and their stocks would suffer for it. So let Musk set a clear expectation for the Tesla brand. Now is the best time to do it. Let’s see if a loyal customer base buys into it.
  - http://zacharyshahan.com/ Zachary Shahan
    
    good points by busdriver and Rob Ryan, and also a great add-on by James here. i think that Elon really is setting an expectation, and if he continues to do so, that could stick for a long time.
bussdriver78

The business model and lack of competition in that model created today’s climate. The same underlying model approaches similar results despite having competition. Just look at the bad opinion of car dealers or even dealership services.

Without a middle man dealership their service reflects DIRECTLY upon them; also, the middlemen profit only by the initial sale and the later support – they do not produce any value people…really value.

Telsa makes money on their product and it is added value to provide better service with the money they are saving. As long as they do not become too greedy, they can afford to operate at a slight loss (such expenses are viral marketing) and make all their money from the car sales.

All this can’t realistically last because it is a publicly traded company and someday those 2nd derivative profit rates will guide the company’s decisions, as it does for all the others – that is the bigger model they have in common which will again lead to similar results; just maybe not in our lifetime.