By Keith Crain, Crain News Service
DETROIT (Nov. 25, 2013) — When you decide to get involved in the automobile industry, you quickly discover that there are more touch points with government, both state and federal, than probably in any other industry in the world.
So when Tesla Motors Inc.'s CEO Elon Musk said—following a series of collisions resulting in vehicle fires—that "there's definitely not going to be a recall" of the Model S electric car, my guess is that he was mistaken.
Unfortunately, as he is discovering, he doesn't get to decide.
When the question of retailing and the need for auto dealers came up, Mr. Musk was and is quite definite that he does not immediately plan to have any retailers other than his own retail outlets.
He's fighting hard on that point. I don't know Mr. Musk's specific win/loss record but he has established a few stores where you can purchase a Tesla. If there is not one near a customer, it would appear that arrangements can be made for delivery. Tesla has some designated U.S. service centers.
If and when, and it's bound to be when in my opinion, his car is recalled—if not for the three Model S fires since Oct. 1, it will be something else—he's going to find it increasingly difficult to take care of all his customers in a timely manner. As his sales increase, he'll have more customers scattered all over the world.
I doubt that the National Highway Traffic Safety Administration (NHTSA) will allow just anyone to repair a recalled Tesla or let the company ship parts to customers and tell them to install the replacements at their leisure.
There are plenty of good reasons for Tesla to have a retail network, but now it looks like we have found one more.
I hope that for the sake of all those customers no recall is needed, and that after a thorough investigation of the Model S, everything is OK.
But if a recall is needed, it's going to be a tough and potentially expensive fix if Tesla has to travel to each and every owner's location.
There will be many more local and federal challenges ahead for Tesla—as for any new automobile manufacturer.
Mr. Musk is extremely innovative. It seems like such a waste of his productive time to have to worry about the retail side for a car that has captured everyone's attention.
By appointing as few as 40 dealers, he could concentrate on what he is best at: creating innovative products.
Keith Crain is editor-in-chief of Automotive News, a Detroit-based sister publication of Tire Business, and chairman of Crain Communications Inc., TB's parent company.