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Are Supply Chain Shortages Impacting Tesla Quality? Time Will Tell

Tesla's beaten the odds more than once. The electric vehicle (EV) manufacturer still makes more EVs than any other company, and they've built a nationwide network of dealerships and service stations that will be hard for any newcomers to compete with.

Supply chain woes that impacted other auto manufacturers haven't caught up with the EV company's profits just yet, but they did report their first production slowdown since the start of the pandemic. It begs the question:

Have supply chain disruptions impacted Tesla quality? 

A previous Tesla report and webinar focused on how far Tesla customers traveled to reach a location. In the third quarter of 2021, the locations with the highest distances traveled were dealerships in Mississippi and Tennessee. These dealerships also included repair stations, with visitors coming from median distances over 225 kilometers, or about 140 miles, from neighboring Southern states. We assumed a level of service need for these visits, i.e. visitors did not have access to local Tesla repair stations for their vehicle.

Service need per area can be assessed by breaking out Tesla locations that only repair vehicles, but this doesn't tell us how the foot traffic compares to the wider population. In essence: what is the relative need for Tesla repair per U.S. county compared to the total county population? We expressed this in terms of the actual proportion of a county's land size that relates to Tesla visitation: 

(If you're on a mobile phone, flip your phone sideways!)

Let's focus on Repair Only sites first: 

An obvious service pocket emerged in the first quarter of 2021 for Southern California. Specifically San Diego, San Bernardino, and Monterey Counties. A neighboring service hot-spot in Maricopa County, Arizona -- home of Phoenix -- is also present.

The Los Angeles metro area has some of the highest rates of EV ownership in the U.S., and Phoenix ranks in the Top 10 for ownership. It's no surprise that as EV purchases rise, so does the need for repair service. Combining external data sets like total EV registration or purchases with actual service demand as visualized above can be an essential part of site selection for additional service locations.

Has Tesla been able to meet their service demand? 

The data for the rest of 2021 suggests "yes", but of concern is the return of service demand in the same areas for the first quarter of 2022. Are Tesla service needs cyclical (i.e. annual check-ups?), or have supply chain shortages created a recurring need for repair? Quarter two data will tell us whether this level of service requirement is maintained.

Looking at the total number of counties serviced per quarter tells us Tesla can breathe easy...for now. Repair users visited from a greater range of origin counties (equivalent to total service footprint) in Q1 2021 compared to Q1 2022, and in fact, when we break down the service footprint based on the proportion of square meters per county represented by Tesla service visitors, it shows the following service footprints per quarter:

+ Q1 2021 = 1,233,938,801 sm

+ Q2 2021 = 950,262,506 sm

+ Q3 2021 = 951,225,445 sm

+ Q4 2021 = 726,320,410 sm

+ Q1 2022 = 640,348,892 sm

In the first quarter of 2022, Tesla repair locations are servicing half of the total area they serviced in Q1 2021. When we look at the numbers this way, it shows need for repair has shrunk every quarter, even if the total number of counties repair users visit from has gone back up in 2022.

What does data around combination dealership-service locations show? 

There's more good news for Tesla here. Since these locations also include foot traffic for consumers interested in purchasing a Tesla, Tesla's growing number of origin counties shows continued interest in the brand. The first and second quarters of 2021 saw foot traffic from over 1,100 distinct counties. There was a slight reduction in the latter half of the year, but overall foot traffic origins improved again in Q1 2022.

Bakersfield, California just north of Los Angeles shows the highest visitation footprint for 2022. This is insightful market data Tesla can use for future site selection.

Key Takeaways

+ Any business can evaluate total need by combining measures of foot traffic relative to county size and type of location

+ Combinations of total foot traffic and origin locations create a Shopper Journey that can be used for site selection and site performance evaluation

+ Tesla's not only meeting current service need but appears to be reducing its total service footprint

+ A main area of focus for Tesla to keep an eye on for both service need and consumer interest is Southern California

Data for this piece used our Venue Data Package. Want a data sample or have questions? Schedule a meeting with one of our location data experts!

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