Tesla is pushing toward a new delivery system where the automaker sends the car directly to the consumer, cutting out needless bureaucracy. CEO Elon Musk touted the new approach in a series of Twitter posts over the weekend, describing the move as “the way it should work.”
The proposal comes at a big time for Tesla, as it pushes out of what Musk described as “production hell.” The company has been working to produce the entry-level Model 3 vehicle at speed, which entered production in July 2017 with a backlog of nearly 500,000 reservations. Tesla reached a rate of 5,000 Model 3 cars per week by the end of June, far more than the standard rate of 2,000 Model S and X vehicles per week. Tesla now finds itself in a “delivery logistics hell.” Musk used the term to describe the company’s current situation last month, detailing how Tesla faces “insane car delivery logistics of the next few weeks.”
Musk’s solution to this problem is to cut out the middleman:
Musk also highlighted how a direct delivery system will cut back on other logistics issues:
Musk demonstrated how such a system may work last month, when he personally aided with the delivery of a Model 3 to Devin Scott in Los Angeles. Instead of wrapping a car up and sending it out to a distributor, Tesla sends an enclosed trailer directly from the factory to the home. The system means less plastic waste as well as a simplified delivery process. The company is also building its own car carriers to move vehicles faster.
The idea taps into Musk’s wider plan, outlined in a March 2017 earnings call, to make deliveries “more streamlined, less paperwork, less bureaucracy.” Tesla has also been experimenting with “sign and drive,” where instead of delivery appointments that take up an hour, the user signs and drives away with a series of videos to explain the basics of operation. Another idea suggested by Musk is to use the smartphone to digitally sign contracts. The company is also aiming to reduce repair times to just 24 hours, bringing collision repairs in-house to get users back on the road as soon as possible.
Tesla is expected to deliver its next quarterly earnings report at the start of next month, at which point the company may provide more detail about its goal to move out of the logistics hell.
