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Elon Musk pledges to improve Tesla’s service location coverage within 3-6 months
In a recent announcement on Twitter, Elon Musk pledged to “fix” the existing gaps in the coverage of Tesla’s service locations. According to the CEO, Tesla would aim to expand the reach of its service centers to areas beyond big North American cities within the next 3-6 months. Musk also issued the same pledge to all countries that Tesla will be operating in by the end of next year.
Just reviewed Tesla’s service locations in North America & realized we have major gaps in geographic coverage! Sorry for this foolish oversight. Tesla will aim to cover all regions of NA (not just big cities) within 3 to 6 months.
— Elon Musk (@elonmusk) October 17, 2018
Musk’s announcement on Twitter comes at a time when Tesla seems to be at the brink of reaching even more impressive milestones in vehicle delivery and production. In 2019, for one, Tesla aims to produce 10,000 Model 3 per week, resulting in a yearly output of more than 500,000 vehicles. Such a fleet requires a strong network of service centers in all areas where Teslas are being sold.
Tesla’s service centers are admittedly one of the company’s biggest points of improvement. Over the years, Tesla’s vehicles have developed the notorious reputation for being incredibly difficult to repair. Anecdotes from Tesla owners from the initial days of the Model S alone indicate that getting vehicles serviced, particularly for repairs, could become a taxing experience, partly due to the lack of spare parts and the number of certified body shops that can actually service the electric cars.
Elon Musk has since pledged to address this issue. In the 2018 Annual Shareholder Meeting, Musk discussed the expansion of Tesla Service Centers and authorized body shops. Addressing the company’s shareholders, Musk noted that year-over-year, Tesla expects to see a doubling of service center capacity for Tesla.
“We’re rapidly expanding service centers. Year over year, probably see a doubling of service center capacity for Tesla. We’re making major progress on the body-shop front. This is quite a big deal. We’re creating Tesla body shop repair locations. We should have by the end of the month in at least the Top 10 metro areas in the US being able to be serviced by a Tesla body shop. This will be a dramatic improvement in the cost and time of body repair,” Musk said.
Musk also teased the idea of launching in-house body repair shops to address damages from minor accidents quickly. Tesla launched the first set of in-house repair shops earlier this year, and so far, they seem to be working well. A Model 3 that got damaged from an accident at a parking lot, for one, was fully restored by an in-house body shop in just 25 hours.
Norwegians are right to be upset with Tesla. We are having trouble expanding our service facilities in Oslo especially. Can solve quickly with Tesla mobile service vans, but awaiting govt permission to do so.
— Elon Musk (@elonmusk) July 5, 2018
That said, Tesla’s service network still has a long way to go, particularly in foreign regions. Last July, reports emerged that Tesla owners from Norway are getting aggravated by the company’s slow service. Responding to the reports on Twitter, Elon Musk admitted that “Norwegians are right to be upset with Tesla” considering that the electric car maker is having trouble expanding its service facilities in the region.
As the impending global rollout of the Model 3 approaches, Tesla seems to be preparing itself for a massive influx of vehicles abroad. In Tilburg, Netherlands, for example, the company recently acquired an expansive facility located close to its assembly plant and delivery center. The facility, which spans 387,500 square feet (36,000 square meters), is speculated to serve as a hub where parts for vehicles are stored and distributed to surrounding regions. Considering that a shortage of parts is among the problems that plague owners, the Tilburg hub would likely play a vital role in ensuring that Tesla’s service networks are fully equipped and ready to address owner’s concerns in a timely manner.
Tesla stock (NASDAQ: TSLA) closed at an all-time high on Tuesday, jumping over 3 percent during the day and finishing at $489.88.
The price beats the previous record close, which was $479.86.
Shares have had a crazy year, dipping more than 40 percent from the start of the year. The stock then started to recover once again around late April, when its price started to climb back up from the low $200 level.
This week, Tesla started to climb toward its highest levels ever, as it was revealed on Sunday that the company was testing driverless Robotaxis in Austin. The spike in value pushed the company’s valuation to $1.63 trillion.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
It is the seventh-most valuable company on the market currently, trailing Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, and Meta.
Shares closed up $14.57 today, up over 3 percent.
The stock has gone through a lot this year, as previously mentioned. Shares tumbled in Q1 due to CEO Elon Musk’s involvement with the Department of Government Efficiency (DOGE), which pulled his attention away from his companies and left a major overhang on their valuations.
However, things started to rebound halfway through the year, and as the government started to phase out the $7,500 tax credit, demand spiked as consumers tried to take advantage of it.
Q3 deliveries were the highest in company history, and Tesla responded to the loss of the tax credit with the launch of the Model 3 and Model Y Standard.
Additionally, analysts have announced high expectations this week for the company on Wall Street as Robotaxi continues to be the focus. With autonomy within Tesla’s sights, things are moving in the direction of Robotaxi being a major catalyst for growth on the Street in the coming year.
Elon Musk
Tesla needs to come through on this one Robotaxi metric, analyst says
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Tesla needs to come through on this one Robotaxi metric, Mark Delaney of Goldman Sachs says.
Tesla is in the process of rolling out its Robotaxi platform to areas outside of Austin and the California Bay Area. It has plans to launch in five additional cities, including Houston, Dallas, Miami, Las Vegas, and Phoenix.
However, the company’s expansion is not what the focus needs to be, according to Delaney. It’s the speed of deployment.
The analyst said:
“We think the key focus from here will be how fast Tesla can scale driverless operations (including if Tesla’s approach to software/hardware allows it to scale significantly faster than competitors, as the company has argued), and on profitability.”
Profitability will come as the Robotaxi fleet expands. Making that money will be dependent on when Tesla can initiate rides in more areas, giving more customers access to the program.
There are some additional things that the company needs to make happen ahead of the major Robotaxi expansion, one of those things is launching driverless rides in Austin, the first city in which it launched the program.
This week, Tesla started testing driverless Robotaxi rides in Austin, as two different Model Y units were spotted with no occupants, a huge step in the company’s plans for the ride-sharing platform.
Tesla Robotaxi goes driverless as Musk confirms Safety Monitor removal testing
CEO Elon Musk has been hoping to remove Safety Monitors from Robotaxis in Austin for several months, first mentioning the plan to have them out by the end of 2025 in September. He confirmed on Sunday that Tesla had officially removed vehicle occupants and started testing truly unsupervised rides.
Although Safety Monitors in Austin have been sitting in the passenger’s seat, they have still had the ability to override things in case of an emergency. After all, the ultimate goal was safety and avoiding any accidents or injuries.
Goldman Sachs reiterated its ‘Neutral’ rating and its $400 price target. Delaney said, “Tesla is making progress with its autonomous technology,” and recent developments make it evident that this is true.
Investor's Corner
Tesla gets bold Robotaxi prediction from Wall Street firm
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Tesla (NASDAQ: TSLA) received a bold Robotaxi prediction from Morgan Stanley, which anticipates a dramatic increase in the size of the company’s autonomous ride-hailing suite in the coming years.
Last week, Andrew Percoco took over Tesla analysis for Morgan Stanley from Adam Jonas, who covered the stock for years. Percoco seems to be less optimistic and bullish on Tesla shares, while still being fair and balanced in his analysis.
Percoco dug into the Robotaxi fleet and its expansion in the coming years in his latest note, released on Tuesday. The firm expects Tesla to increase the Robotaxi fleet size to 1,000 vehicles in 2026. However, that’s small-scale compared to what they expect from Tesla in a decade.
Tesla expands Robotaxi app access once again, this time on a global scale
By 2035, Morgan Stanley believes there will be one million Robotaxis on the road across multiple cities, a major jump and a considerable fleet size. We assume this means the fleet of vehicles Tesla will operate internally, and not including passenger-owned vehicles that could be added through software updates.
He also listed three specific catalysts that investors should pay attention to, as these will represent the company being on track to achieve its Robotaxi dreams:
- Opening Robotaxi to the public without a Safety Monitor. Timing is unclear, but it appears that Tesla is getting closer by the day.
- Improvement in safety metrics without the Safety Monitor. Tesla’s ability to improve its safety metrics as it scales miles driven without the Safety Monitor is imperative as it looks to scale in new states and cities in 2026.
- Cybercab start of production, targeted for April 2026. Tesla’s Cybercab is a purpose-built vehicle (no steering wheel or pedals, only two seats) that is expected to be produced through its state-of-the-art unboxed manufacturing process, offering further cost reductions and thus accelerating adoption over time.
Robotaxi stands to be one of Tesla’s most significant revenue contributors, especially as the company plans to continue expanding its ride-hailing service across the world in the coming years.
Its current deployment strategy is controlled and conservative to avoid any drastic and potentially program-ruining incidents.
So far, the program, which is active in Austin and the California Bay Area, has been widely successful.
Tesla stock closes at all-time high on heels of Robotaxi progress
Tesla needs to come through on this one Robotaxi metric, analyst says
