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Can Herbert Diess or Any Other Car Executive Help Tesla Fix Years of Mistakes?

When Herbert Diess left Volkswagen on August 31, I thought it would not take long for him to land a new job at Tesla, possibly even replacing Elon Musk there. In the lawsuit against the Tesla CEO’s $56 billion compensation, James Murdoch said Musk found a successor. The Tesla board member noted it happened in the “last few months.” Supposing these pieces of the puzzle match, can Diess fix Tesla’s years of mistakes?
Herbert Diess and Elon Musk seem to be pretty close: it is not unlikely that Diess eventually runs Tesla 7 photos
Herbert Diess and Elon Musk seem to be pretty close: it is not unlikely that Diess eventually runs TeslaHerbert Diess and Elon Musk seem to be pretty close: it is not unlikely that Diess eventually runs TeslaJerome Stoll was the man who fixed Renault's quality control in Brazil. Could Diess do the same for Tesla?Jerome Stoll was the man who fixed Renault's quality control in Brazil. Could Diess do the same for Tesla?Jerome Stoll was the man who fixed Renault's quality control in Brazil. Could Diess do the same for Tesla?Jerome Stoll was the man who fixed Renault's quality control in Brazil. Could Diess do the same for Tesla?
Tesla investors love to brag about how profitable the company is, even if it never paid dividends to shareholders. They praise its technology despite the glitches and recurrent defects in allegedly innovative stuff such as heat pumps and motors. They talk about long backlogs, even with the evident demand issues the company is now facing. Finally, they glorify Tesla’s Full Self-Driving as being years ahead of the competition despite the lack of sensors and 1.2 MP cameras. Some are finally (and publicly) acknowledging Tesla is not where it was supposed to be with the technology.

The first and most pressing issue Diess – or anyone else eventually replacing Musk – will have to fix is Tesla’s lack of quality control. There are vehicles heading to delivery with severe and shameful defects, such as loose trim pieces, serious paint blemishes, and misaligned or even dented panels. Some shortcomings only show up a bit later, but 69% of all brand-new Teslas have to go to Tesla Service Centers for repairs in the first 30 days of ownership, as Troy Teslike warned Musk on Twitter in July.

That is not something easy to accomplish. Tesla would have to hire specialists or train its workers both to prevent these issues and to catch them in quality inspections. Jérôme Stoll stopped Renault’s only factory in Brazil for 40 days to fix production and quality control. Can you imagine Tesla doing the same with Fremont or Giga Shanghai? Yet, it may be necessary.

To make matters worse, there are several stories of Tesla rushing suppliers to deliver parts as soon as possible, even with known quality issues. PingWest published an article on December 25, 2020, about the dire working conditions at Giga Shanghai. Apart from being a “giga-sweatshop,” the factory would rush to make EVs with whatever parts were available. It even lowered quality standards just to speed things up. Anything customers complained about should be fixed later, another proof of Tesla’s motto: “Deliver now, fix later.”

On May 20, Twitter user @WayneBHay shared his experience working at the quality department of a Tesla supplier, and his report matches what PingWest published. For the record, Tesla sued the Chinese outlet demanding it to present new evidence of what it wrote until February 8, 2021. The story is still online.

If any new Tesla CEO had the strength to fix quality control at the company, they would have to deal with expanding the company’s lineup. Four models are not enough to compete in an increasingly more aggressive market, where other car companies are presenting electric options in most market segments. However, that would generate another concern.

Tesla Service Centers are bustling with quality defects, with only four models available. Preventing them would give these repair shops a welcome break, but defective vehicles already delivered would still keep them pretty busy for a while. When that was sorted out, new cars – especially affordable ones – could get Tesla Service Centers back to difficult days. In other words, a new CEO would have to expand Tesla’s repair network. Either that or it should make a deal with GM. The competitor is already repairing Tesla vehicles even without any formal agreement.

Getting Elon Musk out of the equation would bring immediate reputation benefits to Tesla. It could eventually bring back customers that now refuse to buy cars from the company because of Musk’s controversial actions. However, a new CEO would have to reinforce Tesla’s advantages, which demands the company to have a working marketing and PR department. In other words, Tesla will have to stop complimenting itself for not spending a dime on advertisements, which is already untrue in China, where the company also has a PR department.

One way for a new CEO to immediately tackle the demand drop Tesla is experiencing would be to reach new markets, just like BYD is doing. The issue is that Tesla would need to establish new Tesla Service Centers and Supercharging stations in these new markets, which may be a heavy investment to do on your own. BYD is just making deals with dealership groups.

The issue with hiring Herbert Diess is that executives in such high ranks usually have to wait a quarantine period before they can work anywhere else. Just see what happened with Luca de Meo before becoming Renault CEO. He left his Seat CEO job at the beginning of January and only started his new role at Renault in July.

Being the CEO of the entire Volkswagen Group, Diess certainly had much more access to crucial strategies at the German company than De Meo. That means he may have to wait more than six months to work for any direct competitor. Tesla’s true fans may only hope he still has time to fix everything wrong with their beloved EV maker.




 
 
 
 
 

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