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Tesla's fight with America's car dealers

money.cnn.com

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Re: Tesla's fight with America's car dealers

#21

Post by mayneack »

jack-r-abbit wrote: post #10

> Until then, said O'Connell, Tesla will sell its cars the way it wants. If some states don't allow that, then Tesla will simply sell them elsewhere. I think this last line of the article is very important. This has the power to get the consumer on Tesla's side of this fight. If enough of the right people in Texas (and other problem states) want this car and think the laws are stupid... they'll need to find a way to…

This is especially relevant at this stage of Tesla. I would guess that there aren't a lot of people wandering through the mall to buy a tesla or making it one stop on their trek through the dealerships. People (right now) are setting out to buy a Tesla. It's also expensive enough to warrant going to one of the already established outlets, even if that involves travel. I doubt not being able to sell physically in North Carolina will really hamper their sales too much.

Re: Tesla's fight with America's car dealers

#22

Post by bdclimber14 »

gnoway wrote: post #16
maeon3 wrote: post #9

Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket of Car Dealers? I loathe buying cars so much because of the snakes that run those Dealerships. They want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away". How far a…

I don't see how this will stand up if Tesla chooses to fight it. I don't think the laws were intended to guarantee the extension of the dealership model to entirely new manufacturers. The laws were intended to protect dealers from having the manufacturer come in and undercut them after they were established in the market. On the other hand, I think the dealership model exists for a reason. There's a racket aspect to…

To your latter point, it's certainly possible. You could replace "Ford or GM" with a large 90s computer manufacturer, e.g. HP, but Apple eventually decided they wanted to via Apple stores.

Re: Tesla's fight with America's car dealers

#23

Post by [deleted] »

axus wrote: post #6

The article brought up the point that Tesla owns all of the service centers. I don't care if Tesla owns all the dealers, but having a monopoly on Tesla repair would be bad for consumers. If the process for becoming a "Tesla mechanic" allowed competition with the Tesla service centers, that would be OK.

[deleted]

Re: Tesla's fight with America's car dealers

#24

Post by mayneack »

gnoway wrote: post #16
maeon3 wrote: post #9

Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket of Car Dealers? I loathe buying cars so much because of the snakes that run those Dealerships. They want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away". How far a…

I don't see how this will stand up if Tesla chooses to fight it. I don't think the laws were intended to guarantee the extension of the dealership model to entirely new manufacturers. The laws were intended to protect dealers from having the manufacturer come in and undercut them after they were established in the market. On the other hand, I think the dealership model exists for a reason. There's a racket aspect to…

> On the other hand, I think the dealership model exists for a reason. There's a racket aspect to it, but would a Ford or GM really want to manage customer sales and showrooms all over the US?

Yeah, that's a great reason for the dealerships to exist, but not one for them to have some sort of legally protected chunk of the market.

Re: Tesla's fight with America's car dealers

#25

Post by mtgx »

maeon3 wrote: post #9

Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket of Car Dealers? I loathe buying cars so much because of the snakes that run those Dealerships. They want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away". How far a…

I don't think he will, and I hope he won't. But Elon tends to be a guy who thinks very long term, and I think he knows the future for Tesla would be much better if they sold their own cars, and never depended on the dealers again. Plus, it's not like he's in a bad position with Tesla right now, and he's desperate.

Re: Tesla's fight with America's car dealers

#27

Post by beat »

This is a straight-up technological disruption of an existing sales channel. The third-party dealerships are an artifact of primitive 20th century supply chain management - they're basically a caching mechanism to handle latency in the network, to put it in computerese terms. With the power of computers and online ordering, Tesla has no need for these dinosaurs. They can "cut out the middleman and pass the savings on to you", terms every consumer can understand.

The fear for the dealers is not that Tesla will go around them, but that other manufacturers will follow. The big car makers already have experience setting up alternative brands to play with techniques that are too radical for their mainstream business (remember Saturn?), so it would be easy enough for something like GM spinning the Volt off as a new car company, not just a Chevy, and running Tesla-style sales.

If that happens, dealers are doomed.

Re: Tesla's fight with America's car dealers

#28

Post by interurban »

atourgates wrote: post #19
axus wrote: post #6

The article brought up the point that Tesla owns all of the service centers. I don't care if Tesla owns all the dealers, but having a monopoly on Tesla repair would be bad for consumers. If the process for becoming a "Tesla mechanic" allowed competition with the Tesla service centers, that would be OK.

Do the provisions of the Magnuson-Moss Warranty Act, which basically say you can get your car serviced anywhere you want without voiding your manufacturers' warranty, not apply to Teslas?

I don't see how that law comes into effect in this situation unless they left something out of the article. It didn't say Tesla is preventing others from opening services centers, just that Tesla owns them all so far.

There's probably a non-trivial amount of model specific knowledge needed to repair a Tesla that can't be picked up at a general mechanics' school. Maybe when Tesla's sales volume increases there will be a higher demand for mechanics that Tesla couldn't fill and 3rd party shops will open.

Re: Tesla's fight with America's car dealers

#29

Post by gnoway »

bdclimber14 wrote: post #22
gnoway wrote: post #16

Earlier quoted context omitted.

I don't see how this will stand up if Tesla chooses to fight it. I don't think the laws were intended to guarantee the extension of the dealership model to entirely new manufacturers. The laws were intended to protect dealers from having the manufacturer come in and undercut them after they were established in the market. On the other hand, I think the dealership model exists for a reason. There's a racket aspect to…

To your latter point, it's certainly possible. You could replace "Ford or GM" with a large 90s computer manufacturer, e.g. HP, but Apple eventually decided they wanted to via Apple stores.

I don't know that Apple is a good model. They have high volume of relatively inexpensive gadgets that they've managed to convince people should not last very long. The lifetime and service expectations of a car are completely different. If I bought a car and the battery went dead, and the manufacturer's solution was 'ship it to us and we'll send you a replacement in x days' that would be a unacceptable. Likewise, people aren't going to put up with streamlining support by saying stuff like 'no you can't replace your battery, if the car dies you just buy a new one.'

My experience with the HPs of the world is on the business purchase side, but I've never bought 'from HP'. I could initiate the conversation with HP, but they always hooked me up with a solution vendor or whatever were calling a dealer at the time. Same w/ Cisco, Dell, IBM, EMC, Microsoft etc.

Re: Tesla's fight with America's car dealers

#30

Post by beat »

mtgx wrote: post #25
maeon3 wrote: post #9

Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket of Car Dealers? I loathe buying cars so much because of the snakes that run those Dealerships. They want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away". How far a…

I don't think he will, and I hope he won't. But Elon tends to be a guy who thinks very long term, and I think he knows the future for Tesla would be much better if they sold their own cars, and never depended on the dealers again. Plus, it's not like he's in a bad position with Tesla right now, and he's desperate.

If he was going to cave, he'd have caved already. There's nothing in it for Tesla now. The whole attempt to force Tesla into the existing supply chain model, at ZERO demonstrable benefit to consumers, looks bad politically. No politician will want to be seen publicly defending the dealers.
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