Will Tesla need car dealers? Well, it depends.

No doubt Tesla’s go to market strategy is very different from the other car manufacturers.  They are opening up their own stores (showrooms) in states to sell their cars direct.  Which means they are bypassing the dealerships/middle man to sell their cars.  Car dealers and their lobbyist don’t like the fact that they are being cut-out. So what do they do? Why they start crying to the states saying “it’s not fair” in an attempt to ban Tesla from selling cars direct.  Existing laws state that car manufacturers must sell through dealerships or middle men in order to protect the consumer. So why is there such a fight between the dealers and Tesla?

If you start peeling back the layers of the onion you will see that dealers aren’t really scared of Tesla, they’re afraid that if they approve unrestricted direct sales for Tesla, then that will allow all manufacturers to sell directly to the consumer.  I personally feel we would be much better off buying direct from the manufacturers than the dealer network.  First off, the dealers are never there for the consumer.  They will lie, cheat and steal to get a “deal” done.  Secondly the car manufacturers can do a better job explaining the car brand than the dealer due to high employee turnover and or the lack of money they want to spend to train their sales people.  I promise you 100% of the time I can walk into a dealership and know more than their so called “top salesman” does about any of the cars they represent.  I get it, dealers have invested millions in their market to have the right to sell certain manufacturers car brands along with marketing and training expenses.  If manufacturers decided to sell direct, the dealers would be out of business overnight.  Dealers listen up, this is called “COMPETITION” suck it up and do a better job with the customers.  This means the customer has to come first, not your pocket book!  None of this was a problem until Tesla started overtaking car sales from competing manufacturers.

So what does the future hold for Tesla v’s dealers.  I know this will be hurtful or might even be a disappointment to those hoping Tesla will disrupt the traditional car-buying experience, but Elon Musk has hinted on record saying “that there is a time when Tesla might need to sell cars through franchise dealers”.  I tend to agree even though I think the franchise dealer system needs to go away or do a complete reboot.  Here’s my crazy thought process and it really isn’t that difficult to understand.  When Tesla starts selling a high-volume vehicle, lets say the Model 3, it’s going to make a lot more sense to place a large amount of cars at once with a franchise dealer that to sell them one by one as Tesla does now.  Now if Tesla wants to just sell a couple of models then build to order makes more since and a dealer is not needed. The questions that really needs an answer: If Tesla entered into the franchise model, what would they do differently?

 

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