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Tesla Becomes Victim Of Its Own Success

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And it's happening in the one country where business is best.

Tesla has certainly had its share of ups and downs over the years. Its biggest issues were production and having enough money in the bank to keep things floating. But now Bloomberg reports the California-based EV automaker has sort of become a victim of its own success in its best European market: Norway. Thanks partly to attractive government tax incentives and enough financially comfortable buyers, the Nordic nation has become a hot market for Tesla. It's also the world leader in the number of EVs per citizen. Typically, that's good news. However, local customers have begun complaining about poor service. It apparently started when the highly anticipated Model 3 went on sale and high demand was good for business.

The problem now is that Tesla is having difficulty coping with demand. Norway also has the most consumer disputes per Tesla unit of any automaker. The number of complaints is also expected to rise this year following reports of Model 3 quality issues, such as slopping paint jobs. But there is some good news. The ratio of complaints per vehicle is expected to drop after the number of Teslas in the country went above 25 percent to nearly 40,000 this year. In other words, Tesla's efforts to improve service are beginning to pay off.

Tesla is fully aware of its problems in Norway and it has already fulfilled a promise to double its customer service staff as well as opening new service centers. Although Tesla retains a high consumer-satisfaction score, according to a new survey, its service department problems continue to earn low marks.

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Adding the additional staff and service centers is not proving to be enough. Tesla's solution for not just Norway but all countries where it does business is simple: improve quality control. Easier said than done, of course but now that Tesla has "made it" so to speak, the excuse that it's just a start-up automaker no longer flies. Customers rightly demand a high-quality product, just as they do from any automaker. And because Norwegians are so keen on EVs, it may not take all that much for them to begin shopping around elsewhere if Tesla can't get its act together. There are many new players, such as Polestar, that will be more than happy to unseat Tesla's Norwegian sales status.