Tesla's 'Logistics Hell' Was Made In Palo Alto

Summary

Elon Musk says Tesla has transitioned from "manufacturing hell" to "logistics hell."

Customer complaints have been flooding Twitter, creating a risk to Tesla’s brand image, likely its greatest asset.

This logistics hell is a problem of Tesla’s own making, and many of the problems don’t have simple fixes.

How does “logistics hell” impact Tesla in both the short and longer term?

In the words of its CEO, Tesla (TSLA) is now experiencing “logistics hell.” While some of the largest production issues may or may not have been resolved, what's certain is that Tesla is having a difficult time getting the cars it does produce to the customers who want to buy them.

My already bearish take on Tesla’s valuation aside, the logistics issues pose a huge risk. Tesla has been able, to this point, to protect its brand image by having a client base that's primarily early adopters. Many car quality issues that would be completely unacceptable from a legacy automaker have been shrugged off by these early adopters who support the brand and Tesla’s stated mission.

However, as Tesla aims to sell products to a larger and less-forgiving public, these issues pose a serious risk to Tesla’s most prized asset: Its brand image.

Indeed, frustrated customers are taking to Twitter to lodge complaints with Tesla and Elon Musk directly, many after failing to get any sort of resolution or response from Tesla’s overwhelmed customer support channels. Below is a small sampling I was able to find in short order on both Twitter and in the TMC forum. Plenty more to be read here, if you're interested.