Growth Opportunities in Tesla's Global Aftersales Strategy

OTA Update Capabilities that Leverage in-car Data, a Fast-growing Mobile Service Fleet, and an Ultra-lean Physical Service Network Define Tesla's Vertically Integrated Aftersales Service Delivery Model

Having delivered close to a million battery electric vehicles (BEVs) globally in model year 2021, Tesla is clearly leading the worldwide shift towards electric mobility. The company's vertically integrated sales format that eliminates third-party intermediaries in the downstream automotive value chain has received a lot of press coverage. However, not much has been written about Tesla's aftersales strategy, barring a few articles highlighting aspects that are by-products of the company's convention-defying approach to vehicle delivery.

Frost & Sullivan has performed an extensive analysis of this relatively less-spoken-about aspect of Tesla's automotive business and attempts to build a signpost of things to come, for both Tesla and other pure-play BEV start-ups during what is widely acknowledged as the decade of the xEV. This research identifies and thoroughly analyses the standout features of Tesla's aftersales strategy, thereby uncovering valuable insights for both independent aftermarket participants and legacy OEMs foraying into the xEV space.

Research Scope:

The study takes a global view, with the key markets for Tesla (North America, Europe, and China) discussed in detail. For these geographies, Frost & Sullivan offers an in-depth quantitative analysis of Tesla's service infrastructural preparedness vis-à-vis its burgeoning vehicle fleet.

Drawing upon historical trends reported in company financial statements, the study briefly outlines Frost & Sullivan's perspective on Tesla services' anticipated gross margin trajectory in the short-to-medium term.

The study discusses key constituents of Tesla's services and other revenues segment, including (but not limited to) its expanding mobile service network, telematics-backed usage-based insurance product, and over-the-air update capabilities.

The evolution of Tesla's collision repair infrastructure is also analysed to help readers gain an understanding of what the future might have in store.

Additional revenue streams such as B2C service marketing contracts, B2B service subscriptions for independent aftermarket repairers, accessories portfolio, and battery end-of-life management are also discussed.

Research Highlights:

Through extensive primary and secondary research, supplemented by an annual report study, Frost & Sullivan has gathered several crucial data points that were subjected to rigorous analysis to yield rich qualitative insights on an aspect of Tesla's automotive business that has not yet become a prominent subject of market research titles. This study attempts to fill a gap in existing aftermarket research literature, thereby facilitating strategic decision-making by stakeholders in the EV aftermarket, in both the independent and OEM channels.

Key Issues Addressed:

• What are the key differentiating aspects of Tesla's approach to aftersales?

• How will Tesla's profit orientation on vehicle service likely evolve in the medium term?

• How is Tesla addressing challenges inherent to the disintermediated vehicle and service delivery model?

• How are Tesla's partnerships with other stakeholders in the aftermarket ecosystem evolving as its active fleet grows in size?

• How is Tesla leveraging connected vehicle technology to improve its OTA update capabilities and usage-based insurance products?

• How is Tesla monetizing proprietary repair information as the right-to-repair movement gains traction across the world?