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Tesla Inc. (TSLA) has quietly rolled out its own body shops – which has big implications for the company's ability to evolve into a mainstream automaker.
At first glance, it does not appear that the body shops owned by the company are important. But in Tesla's case, being able to repair the damage done to the body is a crucial part of the transition from an exotic niche car manufacturer to a manufacturer capable of competing with its larger, more established peers.
Why are body shops so important? This has a lot to do with the fact that, according to USA Today, the Tesla Model S is the most expensive car model to insure.
The reason for these high insurance bills is actually something quite commonplace: bodily injury is extremely expensive to repair.
A mudguard can cost five digits, a number due to the aluminum construction of cars, the limitation of stores approved by the manufacturer and the scarcity of parts. (Tesla is not the only builder to see higher repair costs due to aluminum construction – the hugely popular Ford F-150 is another example of a more expensive repair model than steel cars .)
At the same time, Tesla's bodily repairs were known to take longer than the standard (another factor in the high cost of repairs).
Because car insurance is one of the most important direct costs of owning a vehicle, it makes sense that Tesla pays close attention to the insurance rates that customers pay. .
And even though we can expect higher insurance rates for an expensive sedan like the Model S, they are not acceptable for an ordinary vehicle like the Model 3.
At Tesla's annual meeting in June, Elon Musk revealed an innovative solution to the problem of the body shop: Tesla would operate its own body shops to reduce costs and turnaround times.
A few months later, Tesla opened or is about to open company-owned body repair centers in nine cities nationwide.
Until now, the results have been well received.
Tesla YouTuber "Like Tesla" has recently released a video about his experience repairing his new model 3 in Marietta, Georgia, after he was hit while parked.
In the end, the internal repairs lasted about 25 hours.
Musk said earlier this month that Tesla planned to bring in most of the collision repairs in-house. And he emphasized the firm's ability to specialize in only three car models so that Tesla service centers can repair repairs faster than outside repair shops.
Outdoor repair shops are all-round jobs, which means supporting thousands of brands and models. Tesla collision repair specializes in three. Having all the parts in stock and not waiting for the approval of the insurance also makes all the difference.
– Elon Musk (@elonmusk) September 16, 2018
If the trend continues, Tesla's body shops could be the silver bullet to solve its insurance problems and keep Tesla at the forefront of customer satisfaction.
In the meantime, we'll see how quickly Tesla will expand its bodywork program outside of the nine launch markets.
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