Friday , October 7 2022

“The Model 3 is a fantastic car – but the organization behind it is a match”


Stefan Moeller began this year with an ambitious goal: to make his car rental company Nextmove the largest Tesla Inc. customer in Germany by adding 100 Model 3s to its fleet. He likened the electric car's arrival to Europe's shores to a tsunami washing over a region that was slow to embrace battery-powered autos.

But the powerful wave Moeller expected has collapsed to a trickle. After weeks of back and forth over unfulfilled repair work and quality issues bringing the initial 15 sedans that Tesla delivered – from scratched bumpers to moisture trapped behind the headlights – the order of the remaining 85 Model 3s was called off. Tesla also tried to deliver cars that were previously registered, which would have locked Nextmove out of Germany's electric-car incentive program and potential tax refunds, Moeller said.

“The Model 3 is a fantastic car. Some of our customers have totally fallen in love with it, "said Moeller, whose Leipzig-based company has more than 300 electric vehicles in its fleet, including 38 Model S and a Model X dozen." But the organization behind it doesn't match that. "Really sobering."

Subpar service could be a barrier to Tesla making more impact in Germany, where exacting car owners value how painstakingly their BMWs and Mercedes are cared for just as much as the speed of the Autobahn. Chief Executive Officer Elon Musk, who is famously inimical to Twitter critiques, acknowledged earlier this year that a lack of service centers in Germany was hampering the company's growth there.

Tesla believes Nextmove's decision to cancel its remaining Model 3 order was entirely due to quality issues, and was largely affected by frustration with an unrelated dispute earlier in the year, according to a spokesperson. The carmaker was in the process of making repairs and had loaner vehicles provided to the customer at the time the order was canceled.

The Tesla spokesperson blamed the registration issue that Nextmove described on a temporary issue with matching identification numbers for vehicles and said the issue was resolved for impacted customers.

Norway Woes

Poor service is an issue already plagued by Tesla in Norway, Europe's largest electric car market per capita. Dented and sloppily painted vehicles have fueled the highest level of complaints per unit among all automakers, according to the nation's consumer watchdog.

In Europe, Tesla is racing against time as more established players wake up to the electric future. The continent is projected to be the world's second-largest electric car driver in the next decade, trailing only China. Customers can already choose between a growing number of battery-powered models from the likes of Mercedes-Benz, Jaguar and Audi.

Moeller said the remainder of Nextmove's Model 3 order was canceled after he demanded an improved process for handovers and fixes. And he says the carmaker's issues extend beyond the Model 3.

He spent two years waiting for the carmaker to replace the seat in a Model X that was delivered in July 2017 with a hole in it. A Model 3 arrived more recently with a protruding bulge on one tire. Moeller shared with Bloomberg News his email correspondence with Tesla and photos of the blemished vehicles.

The Tesla spokesperson said the company's data indicated any unusual vehicle quality issues specific to Germany or anywhere else in the world. The company said a small chance cars were blemished during transportation to customers and that it addresses those issues quickly.

'Seriously Worrying'

Nextmove considered an isolated case. German social media platforms and online forums are abuzz with customers airing complaints about faulty parts from sensors to suspensions. Many also describe Tesla's sales organization in the country as unresponsive.

“I'm still thrilled by the car because it's just so much better than anything I've driven before, but the quality of service and some technical parts are seriously worrying,” Rouven Volk, who said by email that he ordered his Model 3 in February and was slated to take delivery less than a month later.

A wolf chronicled an odyssey with Tesla that started with a car that started being handed over because of a defective main display. The company opted to source another Model 3 from its European pool and set a new handover date for a month later. Then, the car had stains on the outside and in the interior, and a cable dangled from where there should be light for the back seats. The charging cables and winter tires he ordered were nowhere to be found.

The Tesla spokesperson said unhappy customers can return their cars for a full refund up to seven days after purchase. The company's data shows German customers are largely satisfied with their vehicles, including the quality and condition of the cars upon delivery.

"Generally, early-adopter customers forgive unconventional newcomers like Tesla a lot of things," said Stefan Bratzel, a researcher at the Automotive Management Center near Cologne. "But the more Tesla enters broader customer segments, the more distribution and service have to function."

Climbing the Charts

Sales of the Model 3, Tesla's most affordable model, helped make the brand the fastest-growing in Germany in the first seven months of the year, according to industry watchdog data KBA. While 6,816 registrations are still well behind market leaders, Tesla outsold brands including Jaguar and Alpha Romeo.

Tesla is in the process of doubling the number of service centers in Germany in 17 locations, with a focus largely on urban areas including Berlin, Hamburg and Munich, according to the company's website. The carmaker is also branching out into mid-size cities such as Kiel, Ulm and Mannheim, and separately lists 16 retail stores in the country.

The brick-and-mortar presence is still a far cry from the sprawling infrastructure that established carmakers have built in Germany over decades. Volkswagen AG, the top-selling automaker in the country, has hundreds of dedicated sales and repair outlets.

Then again, Musk is betting the looming shift towards electric cars and digital services will upend the retail and after-sales business. Battery-powered autos have fewer components that are at risk of breaking down. Tesla also plans to expand its fleet of mobile service vehicles by 50% and increase mobile service coverage by fivefold this year in Europe, according to a spokesperson.

Rust, Scratches

For the Volk, the rust started showing between the front fender and the driver's door of his Model 3 after about 100 days and 15,000 kilometers, which he attributes to sheet metal friction that sloped properly. Getting a Tesla service staff is challenging because some employees familiar with his case have left the company, Volk said.

Malte Ahl said in an email that he had canceled the purchase contract for his Model 3 in March after Tesla had responded to his concerns about glitches including poor paint quality, scratches on the passenger seat and dysfunctional switches.

“I view this way of dealing with the most loyal Tesla fans as unfair and not sustainable,” he wrote in an attached letter addressed to the company’s German unit.

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