Tesla is experimenting with a new way to deliver the Model 3 (TSLA)

July 31, 2018

Tesla is experimenting with a new way to deliver the Model 3 (TSLA)

Tesla CEO Elon Musk delivered a Model 3 sedan directly from its Fremont, California, factory to a customer's home and indicated the company will continue to deliver vehicles in this way.
"We tried out a new delivery system using an enclosed trailer straight from factory to owner’s home, so super convenient & car arrives in pristine condition without wasting plastic wrap," Musk said on Twitter.
Traditionally, Tesla customers pick up their vehicles from the nearest Tesla service center, or, if they live more than 160 miles from their nearest service center, they can have a vehicle shipped to their home.

Tesla CEO Elon Musk delivered a Model 3 sedan directly from its Fremont, California, factory to a customer's home and indicated the company will continue to deliver vehicles in this way.

"We tried out a new delivery system using an enclosed trailer straight from factory to owner’s home, so super convenient & car arrives in pristine condition without wasting plastic wrap," Musk said on Twitter.

The delivery was made in Playa Vista, Los Angeles, according to a location tag on a tweet posted by the Model 3 customer. Playa Vista is around a 350-mile drive from Tesla's Fremont factory.

When asked if Tesla would continue delivering cars directly from its factory to customers' homes, Musk said, "Yes."

Traditionally, Tesla customers pick up their vehicles from the nearest Tesla service center, or, if they live more than 160 miles from their nearest service center, they can have a vehicle shipped to their home.

According to Jeremy Acevedo, a manager of industry analysis for Edmunds, Tesla's new delivery strategy illustrates the company's effort to speed up delivery times, but is unlikely to be scalable or cost-effective.

Tesla did not immediately respond to a request for comment when asked how many vehicles would be delivered directly from its factory, which vehicles would be eligible, which cities would be eligible, how much time a direct-from-factory delivery saved, and whether customers would be able to ask for a direct-from-factory delivery.

As Tesla has increased its rate of vehicle production, some Twitter users have described delivery problems resulting from contract issues .

On July 23, Musk said the company is attempting to eliminate contracts for its customers and simplify the return process, and said in the past year the company has increased vehicle deliveries in the US from around 1,000 per week to around 6,000 per week, which he suggested has been difficult.

"It's like hitting a square wave," he said .

We tried out a new delivery system using an enclosed trailer straight from factory to owner’s home, so super convenient & car arrives in pristine condition without wasting plastic wrap https://t.co/exNyhb0zOT
— Elon Musk (@elonmusk) July 30, 2018

The Model 3, Tesla's first mass-market vehicle, has put a strain on the company's finances, as it has posted significant losses in the quarters since it was launched. But Musk has said the company will become profitable in the second half of this year. During Tesla's first-quarter earnings call in May, Musk said the Model 3 would earn around a 20% profit margin by the end of this year and a 25% margin in 2019.

Tesla will report its second-quarter earnings on Wednesday.

If you've worked for Tesla and have a story to share, you can contact this reporter at mmatousek@businessinsider.com.

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