Tesla is cutting out more middlemen. On Monday, CEO Elon Musk revealed that the company has started building its own multi-vehicle car carrier trucks to speed up deliveries and push through the backlog of orders. The announcement comes as Tesla pushes through what Musk refers to as a “delivery logistics hell.”
Musk made the announcement in response to customer Chris Barker, who said on Twitter that he “leased a Model S for two years in 2016. Have a day one reservation for a M3 AWD. Placed order at end of June. Still don’t have M3 AWD. Lease ends in one week! New customers getting M3 AWD before me? No help from Tesla. I helped keep the lights on at Tesla! Please help?” Musk replied by offering his apologies, stating that “we’re upgrading our logistics system, but running into an extreme shortage of car carrier trailers. Started building our own car carriers this weekend to alleviate load.”
Tesla has faced big challenges in a bid to expand its output. The Model 3 launched in July 2017 with a starting price tag of $35,000, by far the cheapest car the company has ever produced. With a backlog of around half a million orders at the time of production start, Musk aimed for a production rate of 5,000 cars per week by the end of that year, far more than the 2,000 per week production rate of the Model S and X combined. The company met this goal in June, pulling the company out of what Musk referred to at the vehicle’s first handover as “production hell.”
As one “hell” finishes, another is beginning. Tesla plans to produce up to 55,000 Model 3s in the current quarter, but Musk said earlier this month that the company is now in “delivery logistics hell” due to the influx of new vehicles. The company is bringing collision repairs in-house to speed up turnaround times to just 24 hours, while also rolling out sealed truck delvieries to send the cars directly from the factory to the consumer.
Tesla is expected to report its latest quarterly earnings at the start of November, when it may become clear whether the company has pulled off its expansion while retaining high levels of customer service.
Just in time for the next mass market vehicle, the Model Y.