Luxury car sales rely on product appeal and the outstanding customer service buyers expect in exchange for high purchase prices. Tesla Inc. (NASDAQ: TSLA) admitted shortcomings in the second category, a threat to its efforts to sharply increase sales.

Elon Musk, the electric car company’s CEO and founder, tweeted:

Due to a large increase in vehicle delivery volume in North America, Tesla customers may experience longer response times. Resolving this is our top priority.

— Elon Musk (@elonmusk) September 12, 2018

[in-text-ad]

The irony is that high volume has undermined one of the things most critical to continued demand. Tesla buyers expect that, even though the company does not have traditional service centers at new car dealerships, it runs a service system that allows it to match or exceed those of BMW, Mercedes and Lexus, to name a few.

And Tesla argues that its approach to service is superior to others because of its high-tech advantages:

Over-the-air updates help to improve your Tesla over time, while remote diagnostics and the support of our Mobile Service technicians reduce your need to ever visit a Service Center. In the rare case that your car requires a shop visit, service will be quick and seamless—and likely be complete before you finish your coffee.

The service centers are hard to find, particularly outside large cities. For example, Tesla has no service centers in Oklahoma City, Memphis, Detroit or Norfolk.

Musk did not make it clear what he considers “longer response times.” This is almost certainly the rate at which it upgrades its software. That means service that involves humans is overburdened. That, in turn, means Tesla must quickly find and train qualified service staff. As sales soar, that may be very hard to do.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.