What Tesla’s ‘delivery logistics hell’ is like for Model 3 buyers

Elon Musk has described Tesla’s troubles in getting cars to customers as “delivery logistics hell.”

Jim Fyfe knows what Musk, Tesla’s chief executive, was talking about.

A 44-year-old technology specialist at a bank in Jacksonville, Florida, Fyfe paid a $2,500 deposit in June to order a black Performance version of the Model 3 priced at $70,000.

He was given a delivery date in early September, but when he went to collect the car, he was told that it was still in California, Fyfe recalled. Two weeks later, with no update, Fyfe called the delivery center and was given bad news: His Model 3 had been involved in an accident in transit.

Days later, Fyfe asked for his money back, but quickly received an email saying Tesla had another car for him. Delivery was set for Oct. 27, but as Fyfe was heading to the rendezvous, his phone rang. A Tesla sales representative said this second car was no longer available because it, too, had been in an accident. A Tesla spokeswoman said that was a mistaken reference to the original car.

Two false starts were Fyfe’s limit. “If they had been straight up with me, I probably wouldn’t have canceled,” he said. “I lost all faith in Tesla. I don’t think I’ll ever buy a Tesla.” He recently received a refund of his deposit.

Last month, Tesla reported a third-quarter profit of $312 million, driven by substantial increases in production and deliveries of the Model 3. That lifted Tesla stock, and eased concerns about the company’s finances.

The rapid rise in Model 3 sales even persuaded Andrew Left, an investor who had been betting against Tesla, to switch his view. On his firm’s website, he said he believed that the company’s stock was now a good investment.

Despite the good news, Tesla still faces many challenges. The Securities and Exchange Commission is examining past claims about production goals. The commission, in rejecting a request by The New York Times under the Freedom of Information Act for a transcript of Musk’s deposition in the case, said its release could interfere with “active and ongoing” investigations related to Tesla.

In addition, the quality of the Model 3s coming off its production line is being questioned. Customers have complained on Twitter and in press accounts of receiving cars with scratches, cracked windows, defective components and other flaws. Some Tesla owners have reported waiting a month or more for repairs because of a shortage of parts. In a quality survey published by Consumer Reports last month, Tesla was ranked 27th of 29 automakers, falling six places from last year.

On Thursday, Musk said in a message on Twitter that the company had “acquired trucking capacity” that would allow it to deliver Model 3 sedans ordered by the end of November by the end of the year in the United States.

Tesla may also be facing a new customer-satisfaction issue reflected in the experience of Fyfe. Tesla’s owner forums show that other consumers have encountered similar problems.

Dealers for established automakers rarely see damage to the cars trucked to their showrooms.

Doug Waikem, owner of seven dealerships in Massillon, Ohio, said he had hardly ever received a car too damaged to sell. “It’s not a problem for us,” he said. “It’s pretty rare.” Occasionally, his dealerships have to touch up paint on cars. More serious repairs are disclosed to shoppers before they buy, he said.

The Tesla spokeswoman declined to say how often the company’s cars are damaged in transit.

While working on these issues, Tesla is still moving ahead with plans to produce a new roadster, a semitrailer truck, a pickup truck and a small sport utility vehicle in the next few years. On top of that, Musk intends to build a giant car-and-battery factory in China.

Mike Ramsey, a Gartner analyst, said the delivery problems reflected the downsides of Tesla’s effort to build each car to match a specific order, and its use of its own delivery centers that were not designed to hold stocks of cars. Tesla has 104 delivery centers in the United States. BMW, by comparison, has more than 300 U.S. dealers.

“Tesla had a huge volume push in the third quarter, and they probably could have avoided a lot of this if they had traditional dealers,” Ramsey said.

Clearly, many Tesla customers are thrilled with their cars. Zachary Pernikliyski, a bartender at a Chicago hotel, took delivery of a Model 3 in June with no problems and is exhilarated by the ride. “The joy is like having sex,” he said.

Tesla’s spokeswoman said that of the customers who bought cars in the last 2 1/2 months, 90 percent said they would recommend Tesla after experiencing its delivery process.

But even some customers who love their cars have had unhappy delivery experiences. Russell Rabadeau, an investment adviser in Westfield, New Jersey, ordered a silver, all-wheel-drive Model 3 with the longest-lasting battery Tesla offers. His delivery date was supposed to be Sept. 25. The day before, looking forward to his new car, he sold the BMW 328 he was driving.

Two hours before he was to pick up the Model 3, Rabadeau got a phone call. A Tesla delivery associate said his delivery center didn’t have a silver car for him, and probably wouldn’t have one until mid-October. “That was frustrating because nobody called me to let me know sooner,” he said. “There was no communication.”

After walking to work for two weeks, he checked on the status of his car. Tesla had one — but it was still at the plant in Fremont, California. Tesla rented a Cadillac for him to drive in the meantime. He finally got his Model 3 on Oct. 26. “It’s very fun to drive, great pickup,” Rabadeau said.

Musk acknowledged that Tesla was having serious problems when he referred to “delivery logistics hell” in a Twitter post on Sept. 16. At the time, Tesla was scrambling to sell and deliver as many Model 3 sedans as it could, to help turn a profit in the third quarter. The chief executive also asked current customers to help out at delivery centers to ease the load on Tesla’s staff.

Jonathan Berent, a technology executive in California, recounted a particularly frustrating episode. He paid a $1,000 deposit in 2016 to reserve the right to order a Model 3, then $2,500 this year as a further deposit on a Performance version. In early September, he was told that his car was at a delivery center near Tesla’s Fremont plant, and he headed there with a cashier’s check for the balance. When he arrived, a sales representative showed him the car, and gave him his vehicle identification number.

“I thought, finally, it’s here,” Berent said. “I’d been waiting two years for this car.”

While his Model 3 was being detailed, however, a salesman said there had been a mix-up. The car Berent had just sat in was actually assigned to another customer, also named Jonathan. After a considerable wait, the salesman found another car in an inventory lot about an hour’s drive away, Berent recalled. When the car arrived, it had paint defects that had to be repaired, and he went home.

By then, some friends had told him about problems with their Teslas. Berent considered the paint issue with the car he was assigned, and the delivery frustrations, and decided to cancel his order.

“I didn’t want a car that might not work,” he said. “There was no way I was taking that car.”

Nevertheless, he was contacted repeatedly over the next two weeks by Tesla sales representatives who said they had a car ready for him. One woman phoned and offered to deliver the car within eight hours, to his home or even to a coffee shop if he preferred, Berent said.

He declined the offers, and is awaiting a refund. “If you’re buying an $85,000 car, it should be a great experience,” he said.

Tesla said it had no record of Berent’s canceling his order.