We Know Tesla’s Customers Love the Brand, But Now Suppliers Do Too

Save for a few unhappy owners and its unceremonious loss of Consumer Reports’ coveted red tick recommendation after higher-than-average faults in the magazine’s most recent Annual Auto Reliability Survey, Tesla Motors is a pretty well-loved brand.

Indeed, despite dropping its recommendation for the Model S electric car, even Consumer Reports had to acknowledge that respondents to its aforementioned reliability survey were happy with the brand, with 97 percent saying they’d buy another Tesla and praising the quick and efficient way in which problems were dealt with. Then again, you’d expect no less for a company making a premium electric sedan worth upwards of $70,000.

Tesla isn't just good with its customers: it is good to its suppliers too.

Tesla isn’t just good with its customers: it is good to its suppliers too.

But it turns out Tesla Motors [NASDAQ:TSLA] is also one of the best automakers to deal with if you’re a supplier, with Tesla tying with Toyota in the biennial North American Suppliers’ Choice Study.

Conducted by Deloitte and Automotive News (subscription required), the study polls automotive parts suppliers to find out which of automakers are the best to deal with and which ones are the worst, scoring them on five different factors: openness to new ideas, ease of working with the automaker, level of trust, willingness to provide financial incentives or rewards for supplier innovation, and ability to implement innovations.

Weighted depending on their contribution to the overall index score, with openness to new ideas accounting for 32 percent of the overall score, the scores for each section are added up and converted to a 1,000 point score.

While scores are up overall on the last survey, which took place in 2013, this is the first time Tesla Motors was included in the survey, highlighting its growth in recent years as an automaker and showing that it now has the same influence among parts suppliers as other, much larger brands.

While Tesla didn’t come first, it scored a joint third place with Toyota, coming behind BMW in first place and Mercedes-Benz in second. That placing puts it ahead of far larger automakers like Honda, which placed in fifth place, and Ford in sixth.

GM came in eighth place, demonstrating that despite the new approach to manufacturing, parts and collaboration demonstrated by its work on the upcoming 2017 Chevrolet Bolt EV, there’s some serious work to be done before it is viewed with the same kind of favour as Tesla.

Volkswagen came in eleventh place out of the fifteen North American automakers this year, criticised for its lack of openness.

Of Tesla, one supplier noted that “Tesla is extremely aggressive, but takes a position that they are the innovator and will drive technology to the supply base,” a factor which made the firm easy to work with. Yet, warned the same supplier, Tesla “could improve with a more collaborative approach.”

Tesla scored highly for openness with its parts suppliers, beating many larger, established brands.

Tesla scored highly for openness with its parts suppliers, beating many larger, established brands.

As the gold standard, BMW was praised for its clear development pace and established processes for parts and innovation, with one respondant saying that it had a “clear process” to reward technical advancement in parts supply chains.

While it’s nice to know that Tesla is favored well by parts suppliers as it is its customers, there’s an even bigger advantage to keeping suppliers on side. As AutomotiveNews notes, automakers who earn the trust and respect of their parts suppliers are more likely to be welcomed into the inner sanctum of a parts supplier’s inventory and future products. In other words, parts suppliers who are treated well will reciprocate by offering their best clients the latest technology and the best pricing.

Those who fail to keep their supplier in the loop, provide inaccurate or inconsistent production forecasts, or fail to communicate their needs properly, are kept in the dark.

While Tesla didn’t come first in this particular survey, we think its placing above far more established automotive brands shows us something very important: Tesla is now hitting in the big league, at least when it comes to procuring the parts it needs in the way it should. More importantly, by keeping parts suppliers on-side, it means the automaker can continue to ramp up its production until it is churning out the same kind of volumes required to make it truly compete with much larger brands in the marketplace.


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