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GM’s Latest Business Model: Fixing Cars for Tesla

published: 2022-12-06 9:30

General Motor (GM) may not be as successful as it hoped in terms of catching up to EV sales of Tesla, but the centennial auto manufacturer has found another opportunity on the market, which is EV repair.

GM has started providing Tesla repair services from its distribution system, which to the surprise of many, is quite a lucrative business. “This is a fast-growing business, and a brand new market, as commented by GM President Mark Reuss on GM’s Investor Day.

GM distributors have repaired 11,180 units of Tesla vehicles so far, and the reason is fairly simple, since according to the calculation of the company that there is definitely a GM distributor within 10 miles (16km) of where 90% of US residents live, and it would be the most convenient option whether you are looking to repair a fossil-fuel car of EV.

GM service is distributed all around the US. (Source: GM)

On the contrary, Tesla who adopts direct online sales, does not have such dense distribution network, and merely has in-house service centers, which are not as handy as what traditional auto manufacturers offer in terms of repair access.

Tesla does not fully shut off its after-sales system. Instead, the company offers repair manuals and service instructions, allowing third parties who wish to operate repair services for Tesla vehicles to handle most situations. It is a no brainer for GM distributors to seize this opportunity.

Such development has also introduced a new subversion in status quo. The current general understanding is that it is usually pricier for vehicle repairs and maintenance at OEMs, though the popularization of EVs in the future may turn the existing status upside down, and it would become cheaper for repairs and maintenance at OEMs under a slower duration (assuming that one does not have to wait for the arrival of components).

Tesla is probably delighted to see this development, since the company is not a big fan in buyers going back for extra services. After all, there are few components that need to be maintained for EVs, and it usually has something to do with warranty or repair whenever an EV goes back to the OEM, which are quite difficult in making a return.

It would be a manifestation of resource maximization if GM is able to somewhat increase its revenue through its enormous distribution and service systems, should there be advantages in prices and time.

 (Cover photo source: GM)

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