Tesla has grown its base of fans and well wishers to a vocal and sizable group in part by promising much in the way of a new kind of electric luxury car.
It has consistently attempted to communicate at a level expected by those who’ve plunked down a $40,000 deposit – instead of the regular $5,000 Model S reservation – for their place in line for the top-of the range Signature Series model Tesla presently lists as sold out.
The company manages an enthusiast forum, issues regular blog posts written by its senior executives or chief executive, and aims to show it is a new kind of company as well, as evidenced most recently by a letter to Signature Series reservation holders.
These folks are more or less patiently waiting their place in line in the first wave of buyers for their new cars as Tesla admittedly learns how to be a full-on automaker at its Fremont, Calif. plant, and says it is adopting some lessons as it goes.
Earlier this month, Elon Musk also wrote explaining general company news was better than had been reported, and Tesla would be profitable by the end of November. He said he’d been unable to counter negative published accounts due to SEC gag rules during a stock offer, and as Tesla was also trying to satisfy others in line – including the U.S. government which was (nicely) asking when it would see repayment of its $465 million loan, and investors, who reacted to the stock offer to raise money as it downgraded projected production for this year.
Tesla may be putting out minor fires – but these are probably better than literal fires – and it has been credited with managing expectations on all fronts well by most, not so well by a few. Indeed, it has a department for the “experience” its car buyers will receive as the company models its retail experience as an automotive parallel to Apple.
This week we received a copy of the aforementioned e-mail intended for Signature Series reservation holders. Dated Oct. 17, it was sent by one of the Signature buyers who said he wanted to share his personal cyber correspondence (with name removed) to give insights into how Tesla was handling delays and demands.
It was signed by George Blankenship, vice president of worldwide sales and ownership experience, and rather than reinterpreting it for you, we’ll let the company do its own talking. Below, reprinted in full, is a letter otherwise only meant for those who have placed significant cash on file and have thus paid for the privilege to see it:
Dear Signature Purchaser,
We have been receiving a lot of very specific questions lately regarding the delivery timing of Signature cars. I have received many inquiries personally, and the Delivery Specialists and Ownership Experience teams are both receiving questions regarding this issue on a daily basis. Given our recently modified 2012 production plan and the information we now have, after several weeks of digging into this issue, I thought it would be helpful to send a personal message to all Signature reservation holders who have not yet received their car to give them an update and explain exactly what is going on.
As you probably know, our initial estimate of 5,000 cars by the end of 2012 has been re-estimated to between 2,500 and 3,000 cars. This change was announced several weeks ago and is the result of several factors, including a number of global supplier issues and our own in-house quality expectations. This change does not impact the number of Signature cars that will be built, and we will still produce cars in “series order” as originally planned. This means we will still produce Model S Signature cars first, then move to General Production cars.
The primary impact of this revised production ramp is that early Model S deliveries have been moved out approximately 4 to 6 weeks. For some of you, this change means that the estimated delivery date on your order paperwork has now passed, and you may have had the delivery date of your Model S scheduled and then re-scheduled to a later date. This is very unfortunate and is not something we are happy about or taking lightly. I apologize for this inconvenience. We are now actively resolving the issues that have caused delays, and over the next few weeks you will see a substantial improvement in the accuracy of our projected delivery dates. We know what needs to be done, and we appreciate the patience you have shown as we work through these early-stage growing pains.
There is another issue I’d also like to address briefly that has hit my inbox a few times recently and has surfaced on a few forums. The issue surrounds the sequence in which we are building and delivering Model S. This is an issue we take very seriously. Many Model S reservation holders I have met during the past two years actually introduce themselves by name and then follow their introduction by giving me their Model S Reservation Sequence Number. Their sequence number is something that is very important to them, and is very important to us. That being said, let me explain what has happened during the first three months of production and what is happening now.
We have been working very hard to build cars in the perfect sequence order while managing our way through a few supplier quality issues and a few key vendor delays. As you may recall, we had quality issues early on with Banana Leaf décor, and moved away from that option to Obeche Wood Matte. Shortly thereafter we added Obeche Wood Gloss to the list of available decors and made a few changes to the Performance Model exterior. All these changes impacted the sequence in which we could send orders to the factory. Another variable that impacts delivery is the length of time customers take to finalize their configuration. Some customers decide on options and sign their paperwork within 24 hours after receiving the invitation to configure. Others take a month or more to finalize paperwork. While this may not affect your delivery timing, it is a variable that has impacted others.
As much as we tried to juggle all the changes with the move away from Banana Leaf, the addition of Obeche Wood Matte, then the addition of Obeche Wood Gloss, and making changes to the Performance Model, we still needed to send orders to the factory every week. In some weeks it meant we had to reach forward in the sequence order to find cars that were not impacted by a particular décor or option, and in some cases the absence of a particular décor or option pushed cars back. We also had to work with how long it took some customers to configure their car. So what does all this mean? It means that when all is said and done, there will be about 26 Model S Signature cars that are built earlier than they should have been (most of which have already been delivered), and about 28 will have been built later than they should have been (all of which are now under a microscope everyday to make sure they get through production immediately and have delivery expedited). I wish we could have provided a more seamless experience, but we tried our best to prioritize weekly production orders while taking into account the quality we insisted upon, the parts we had, and the all-important sequence number.
With all this now taken into account, what should you be expecting next? For most of you (some of you are already beyond this point), two things will be happening very soon. You will be receiving an email to start prepping for your delivery, and you will be receiving a revised target delivery date from the Delivery Experience Team. The email will ask a few questions about where you would like to take delivery, if you plan to finance your Model S, if you have a trade-in, and will confirm your registration information. This email will be coming out soon and is the start of your delivery process.
I hope this helps explain a little about what has happened to date, what is going on now, and what you can expect in the near future. I believe our communication to date on this subject has been weak at best. I’m sure for some of you it has been very frustrating as well. Again, I apologize for any frustration this has caused. I firmly believe we have solutions in sight, and going forward, while we will still not be perfect, we will be better because of what we have learned.
Thank you for your patience.