Even with the release of the highly anticipated Standard Range Tesla Model 3, the announcement of the Model Y unveiling, the date given for the Supercharger V3 launch, and an over the air firmware update to increase your cars performance, TSLA’s shares are significantly down. Your customer relations are playing a major role in that as many are currently unhappy.
Disrupting a market that took over a century to establish in just a decade has garnered Tesla cult followings of both fans and skeptics. One outweighed the other as you always kept customers happy and continued to revolutionize the industry. Your early adopters are what shared your mission and helped you sell cars. They stuck through the toughest times and continued to help you grow to achieve what many considered unachievable. Now, many are feeling bruised.
In order to attain your $35,000 price point you chose to close your stores and shift to online sales. Doing so allowed for an average price decrease of 6% throughout the entire lineup. While that’s absolutely great for future customers, this change came as a surprise with many customers buying just days before feeling cheated.
This is not the first time Tesla has pulled such a stunt. It happens on almost a monthly basis as no product or price changes are ever disclosed beforehand. With each and every minor change, the same thing occurs. Some larger cases were in the transition from AP1 to AP2, MCU1 to MCU2, pre face lift to post, and now this. Each time leaving customers burned. The only difference is that this time it’s not minor, it’s thousands of dollars.
In areas where more drastic price changes occurred, your very own customers are literally protesting. As you’re closing your stores, they’re standing right outside making a statement. So many have gathered at Superchargers that police have been involved. Rightfully so as now reports are coming out that customers were pressured into picking up their cars before this extreme price change took effect. This is just morally unacceptable.
Taiwan Tesla Owners protesting about the price adjustment outside of the Supercharger Station and Store/Service Centre in Taiwan. Blocking the entrance using their cars. (Video Part 1/3) #Tesla #TeslaTaiwan #Protest #特斯拉 $TSLA pic.twitter.com/qTS7X8ZGV5
— JayinShanghai (@ShanghaiJayin) March 4, 2019
“I received Tesla’s Model X on February 25, and I only drove this car for five days before Tesla announced a price reduction of 174,300 yuan ($25,989.87). I’m probably the most unlucky new buyer … That’s unfair,” said Tesla owner Luweijuzi on Weibo.
To a company with over a billion dollars in cash, $26k might not seem like a lot. But to the average person, that’s pretty significant. People are upset the same way they were when the price of the performance Model 3 was lowered by $5,000. In that case, you caved in and refunded customers after just a few tweets were typed.
Worst of all is how you’ve supposedly been handling this situation with rumors now spreading that you’ve hired a Chinese censorship firm to delete all negative posts on Weibo, one of China’s largest social media platforms.
In what seemed like an attempt to make things right, you lowered Autopilot and the Full Self-Driving upgrade costs for previous owners. Clearly aimed at those least affected in the price change spectrum but even they weren’t too pleased. While backed by good intention, in hindsight, it probably made things worse.
If you are a current Tesla owner and do NOT currently have EAP, you can buy FSD for $5k right now. While I have to pay $2k more to get the same thing. That is the issue.
— Marc Benton (@marc_benton) March 4, 2019
Many felt like this was just a quick cash grab rather than anything else. Offering a massive discount for those who have yet to purchase either package while ignoring the early adopters. The ones you used data from to improve and update your systems are those who ended up paying the most. Customers purchased non existent features years in advanced in order to secure what you made out to be the low price before it was increased. Instead, the opposite happened and the price decreased. These customers purchased your non existent product years ahead for a higher cost with no added benefit.
usually early adopters have the benefit of using the product before everyone else does. But now, for owners who purchased Full Self-Driving before delivery, but still have never used the system at all (because it hasn’t been enabled), they are being left out of a price drop of a product they haven’t even used, simply because they took Tesla at their word that they would benefit from ordering it earlier rather than later.via Electrek
Warranted or not, your customers aren’t happy all around. They feel deceived by a company they backed and put their faith in. Tesla is a company built on a fan base. You pride yourself in retaining customers as many stick with the brand. These mistakes might not have a simple solution but you should learn from them because they seem to continue to repeat themselves.
As Teslatunity and M3OC put it, one of your biggest mistakes was caving into that $5,000 refund for the performance Model 3. No other manufacturer would have done anything similar and it set a poor precedent for future cases. Everyone affected by Tesla price decreases now feel they’re owed the same.
Understanding how it could positively impact finances, discounting Autopilot for previous owners was not the right move. If it was not done fairly, it should not have been done at all. Everyone agreed to their purchase price and were fine with it but now you have people arguing over its fair value. There is no case where some previous owners should receive a discount larger than other previous owners. No discount for anyone would have been better than this “solution”.
Reality is, prices move up and down all the time in the automotive industry. But you specifically should be more open about upcoming changes. With each and every update to your vehicle lineup, there’s always an ordeal with upset customers. Always due to a single fact, lack of communication. With every other manufacturer, we know months in advanced what exactly is changing in their vehicles. With Tesla, it’s always a last minute thing. You can order a car today and receive something completely different on delivery. While it’s great to constantly be improving and adapting, doing so in secret leaves customers feeling bamboozled when it negatively affects them.
With the discontinuation of your referral program and your quest to leave customer unsettled, you’re slowly ridding of those who are willing to back your products. Tag that with your stores now closing and lack of marketing budget and you have a recipe for disaster. I’ve been here chugging along side watching Tesla topple over legacy automakers with a smile on my face but these last few decisions leave a bad taste in my mouth.
This is a company that doesn’t advertise. This is a company that’s laying off most of its salesforce. You would think that this would be the worst possible time to alienate the existing customers.
Whatever you decide to do, I truly hope your next decision is thoroughly thought out and not just tossed out of another hat.
@RyanCasburn We always try to maximize customer happiness even if that means a revenue shortfall in a quarter. Loyalty begets loyalty.
— Elon Musk (@elonmusk) April 3, 2016