In 2016, Elon Musk Said It’s ‘Terrible To Make A Profit On Service.’ Now, Repairs, Parts And Superchargers Are Beginning To Drive Its Profits

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In 2016, Elon Musk Said It’s ‘Terrible To Make A Profit On Service.’ Now, Repairs, Parts And Superchargers Are Beginning To Drive Its Profits

In 2016,

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said something that might surprise you today: “Our philosophy with respect to service is not to profit from service. I think that it’s terrible to make a profit on service.”

By 2024, however, it appears that things are going the other way. As Electrek’s Fred Lambert reports, a significant portion of Tesla’s revenue comes from auto repairs, components and its network of Superchargers – exactly the sectors Musk had insisted would not be centered on profit.

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According to Tesla’s Q3 2024 financial

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, “services and others” profits soared over $250 million, a staggering 90% increase over the previous year. What comprises these earnings? The Supercharger network, Tesla’s auto repair facilities, and selling replacement parts account for most of them.

This shift marks a big change from Tesla’s previous approach. Musk had always said that Tesla aimed to improve its cars so they’d hardly need any service. As Electrek reports, his famous line was, “The best service is no service.”

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If Tesla could make its cars super reliable, owners wouldn’t need to worry about spending time (or money) on repairs. But the reality today seems a bit different.

Many Tesla owners have reported long wait times for service and repairs aren’t cheap. Customers are becoming irritated by even standard equipment like suspension components. For instance, one Tesla owner shared that he was quoted over $2,400 to fix his Model S front suspension, but he bought the parts online for just $365.

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Tesla’s Supercharger network is also changing. Initially, Musk stated that the Supercharger network would “never become a profit center” for Tesla – it was meant to make Tesla ownership more convenient, not to add to the bottom line. However, Supercharger prices have been increasing and Tesla openly pointed out that profits from the Supercharger network were a major factor in their improved results for Q3.

Of course, there’s more to the story. Tesla recently opened

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to non-Tesla electric vehicles, which means new revenue opportunities. According to Electrek, it’s possible that Tesla is just changing its approach to accommodate this network’s expansion. However, many Tesla owners find that the price increases don’t match their initial expectations when they purchased their vehicles.

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