Tesla Admits to More Customer Problems

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Tesla Inc. (NASDAQ: TSLA) has admitted it has more problems that will affect its car buyers and owners. One is the logistics of car delivery and service. The other is the slowness of repairs. It is another set of issues that will raise skepticism about whether Tesla can handle customers as sales rise toward the company’s goal of 500,000 in annual sales.

CEO Elon Musk tweeted:

Sorry, we’ve gone from production hell to delivery logistics hell, but this problem is far more tractable. We’re making rapid progress. Should be solved shortly.

He also tweeted:

If these problems continue to plague customers as it rolls out tens of thousands of its new Model 3 this year, and hundreds of thousands in 2019, people will lose faith in Tesla’s post-purchase treatment. As word of this gets out, buyers may opt for another luxury car, including luxury electric cars made by other manufacturers.

For Musk, this is another chink in Tesla’s armor with both consumers and investors: that production of the Model 3 has been late. Musk also has roiled investors with rumors he would take the company private. There has been speculation for some time that he will need to raise more money this year, which could reduce the value of Tesla’s stock.

Musk has a short time to fix the problems he has admitted to in public. If that period passes, Tesla will have another black eye it can ill afford.