Monthly Plug-In Sales Scorecard

Plug-In Vehicle Buyers Typically Not Satisfied With Dealership Experience – Tesla Is Exception To Rule

3 years ago by Eric Loveday 16

Ratings of buyer satisfaction with new vehicle purchase experience

Ratings of buyer satisfaction with new vehicle purchase experience

Once again, Tesla’s direct-sales model wins.

A recent study conducted by researchers at the Institute of Transportation Studies, UC Davis suggests that “buyers of plug-in vehicles (PEVs) are substantially less satisfied with the dealer purchase experience than buyers of conventional vehicles—with the notable exception of Tesla buyers. A fundamental problem appears to be divergent expectations regarding the level of support buyers receive from dealerships,” according to Green Car Congress.

As the UC Davis study states:

“Presently, 19 different models of PEVs from 10 different manufacturers are available for purchase in California, but only three of these models are available nationally. Although automakers have made PEVs available for purchase by private consumers in California since late 2010, only a minority of dealers in core PEV markets currently offer them. Further, the quality of the purchase experience has come under scrutiny. An April 2014 Consumer Reports investigation, in which it dispatched 19 mystery shoppers to 85 dealers across four states, found many dealers knew little about the PEVs they sold. In some cases, dealers outright discouraged PEV purchases. In a number of states, dealer groups have moved to block start-up EV automaker Tesla from introducing its direct-to-consumer retail model. Limited engagement by dealers, poor purchase experience, or efforts to block innovations in the automotive retail sector could adversely impact sales and slow the growth of the nascent PEV market.”

“Policies and incentive programs do not currently account for the key role dealers play in new vehicle transactions. There is also little available information that describes the extent to which new car dealers are embracing PEVs or that examine the quality of the purchase experience witnessed by PEV buyers. Data is needed to compare the purchase experience for plug-in and conventional vehicle buyers and consider whether differences may impact PEV adoption.”

As for Tesla, the study concludes:

“We found that on average, plug-in vehicle buyers rated dealers much lower in sales satisfaction than conventional vehicle buyers. In contrast, buyers ranked Tesla much more favorably. The magnitude of these disparities is extraordinary by industry standards and indicate the problem is likely systemic. … Tesla’s industry-high marks suggest new retail approaches could lift satisfaction scores, engendering positive word of mouth that could hasten consumer adoption.”

It seems direct sales are the way to go when it comes to plug-in vehicles.

Some details on how the study was conducted, via Green Car Congress:

“In the working paper, they present preliminary findings from a study of the retail market for PEVs in which they conducted 43 interviews with six automakers and 20 new car dealers in California’s major metro markets for PEVs. They also analyzed national and state-level J.D. Power 2013 Sales Satisfaction Index (SSI) study data on customer satisfaction with new car dealerships and Tesla stores.”

“The SSI study captures 12 different PEV models from eight vehicle manufacturers, including GM (Chevrolet Volt); Nissan (LEAF); Tesla (Model S); Ford (Focus EV, C-Max Energi and Fusion Energi); Honda (Fit EV and Accord PHEV); Toyota (Prius Plug-in and RAV4 EV); Mitsubishi (i-MiEV); and Daimler (Smart Fortwo ED). It did not include CODA and Fisker nor models introduced after the survey period such as the Chevy Spark; Fiat 500e; BMW i3 and i8, or the Cadillac ELR. While Tesla Motors was 23 part of the study, California data was unavailable since Tesla opted out of providing data in the state of California.”

“The ITS team also examined exploratory data from survey questions co-developed with the Center for Sustainable 28 Energy (CSE) and incorporated in the PEV Demographic and Diffusion questionnaire disseminated to PEV purchase rebate applicants.”

This finding truly caught our attention:

“Plug-in vehicles returned higher gross profits but place greater demands on dealers and salespeople, including the provision of support services beyond traditional offerings.”

And this is intriguing too:

“For plug-in vehicle buyers, total transaction times at dealerships average 251 minutes (4 hours and 11 minutes), slightly less than the average for conventional car buyers at 255 minutes (4 hours and 15 minutes). In contrast, Tesla buyers on average spent half as long (at just over two hours) interacting with retail representatives.”

Tesla Store

Tesla Store

Basically, the whole study seems to be easily summed up like this…Tesla does it right!

Source: Green Car Congress

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16 responses to "Plug-In Vehicle Buyers Typically Not Satisfied With Dealership Experience – Tesla Is Exception To Rule"

  1. MDEV says:

    I love the purchase experience I had with Tesla but the facility in Rockefeller VA is king of ugly.

  2. pjwood says:

    Dealership experience often has a lot to do with what people are offered for their trade. Carmax was receiving that ire, and now Tesla is just beginning to make a few friends, and enemies, valuing its own used cars.

  3. David Murray says:

    Having dealt with several dealers… This has been my experience.

    Nissan dealers barely care about selling Leafs. But they have some on the lot and will definitely sell you one.

    GM dealers basically pretend they don’t even have a Volt, you practically have to beg them before they’ll even admit they have one on the lot, and it will be hidden in the back.

    Ford dealers proudly display their Energi cars and attempt to sell them. But they don’t care at all about the Focus electric. You have to beg them before they’ll even talk about it.

    BMW Dealers actually care about the i3. They have them on the showroom and actually train their sales guys about not only the i3 but the competition (namely the Leaf and Volt) They are genuinely enthusiastic about selling them.

    1. Scramjett says:

      Interesting. I generally agree, however, the Nissan dealership I got my Leaf at had staff trained on it and were fairly enthusiastic about selling it, not Tesla level enthusiasm, but not like “fine, I’ll sell it to you if you really want it that bad!”

      The one time I stumbled into the neighboring Chevy dealership, I was curious about the Volt and asked about it and the guy looked at me like I was from another planet. I don’t think I’d want to get a Volt from them, especially considering they put their Silverados and Suburbans front and center and everything else is hidden in the back (especially the Volt).

  4. taser54 says:

    So the solution is for all dealers to charge full MSRP for their cars. That way, like with Tesla, time will not be wasted haggling.

    🙂

    1. David Murray says:

      There are many advantages to that model. I think buying a new car should be just like buying a new iPhone. I should have the choice to buy it direct from the manufacturer or from a dealer. But the price should be more or less consistent unless the manufacturer is offering a sale.

      The real problem with dealers isn’t haggling over the price so much as it is all of the other crap they try to sneak into your payment. Useless warranties, dealer add-ons, etc.

    2. Scramjett says:

      Actually, a better idea is to have all dealers charge invoice. I never pay more than a couple hundred over invoice anyway and dealerships already get markdowns from the manufacturer that make the actual price paid to the manufacturer lower than invoice anyway.

    3. Rob Stark says:

      When dealers have a hot car like Model S they have a “market adjustment” plus ~$20k on the MSRP.

  5. Banzai says:

    When I test drove a Volt (and ended up happily leasing one), the salesman said that the Drive Mode button just adjusted the stiffness of the suspension and did nothing else.

    He was at a loss to explain what suspension effects “Mountain Mode” and “Hold” entailed. Heh.

    GM nor the dealers are actively promoting the Volt so it’s moving at low enough volume that they don’t have to worry much about actually understanding the car. The initial learning curve is a bit steep for traditional car guys who aren’t interested in tech and their lack of interest and effort shows.

    People that are interested in the Volt educate themselves rather than rely on the salespeople so the buyers that do trickle in don’t need their help anyway. But that severely limits the Volt’s potential market. Damn shame.

    GM should’ve spent the last four years bragging on national TV that they have an amazing high-tech car from the future that all its buyers love.

    1. ModernMarvelFan says:

      Well, Fox News have been spending the last 4 years bashing the Volt…

      I think GM decided NOT to fight that “political battle”…

  6. RedLeafBlueLeaf says:

    The experience varies greatly by dealer, which is why the franchise model is horrible (and why dealership associations require strong state laws to protect their business viability).

    On my one Volt visit (early 2013) the dealer had a Volt specialist on staff who knew all about the car and was extremely helpful. But others have had really bad experiences trying to get Volt information from the dealer.

    On my two Focus Electric visits (early 2013) one dealer literally knew nothing about it but admitted as much up front, and tried all he could to gather info from his sources. The second dealer claimed all their salesmen were trained on the FFE but I knew more about it that the one who gave us a test drive.

    I’ve been at many LEAF dealers for charging and have met three salesmen who were trying to specialize in the LEAF and asked me all kinds of questions. They told me that they got an hour video presentation to train them to sell the LEAF and learned the rest on their own. Two of them were actually very knowledgeable. Except for those three you can forget getting info from any of the Nissan salespeople I’ve run into.

  7. Kaleb says:

    My local Ford dealers knew nothing about the Focus electrics, but in general the Nissan dealerships had at least someone around that was surprisingly familiar with the LEAF product. However, my purchase/lease experience was terrible–it had nothing to do with the LEAF and everything to do with the typical salesman BS. The first dealership wouldn’t come below $550/mo if you can believe that. The next dealership was around the $400/mo mark. I finally pit one dealership against another and got down to the $2xx/mo I was expecting in the first place.

    Learning how to negotiate takes precious time and I would very much appreciate a no-haggle experience like Tesla has. It’s frustrating to think you are being cheated every step of the way, which I think adds a lot to customer dissatisfaction.

    In the end I couldn’t bring myself to spend $90,000 on a car I would be using for commuting, so I put up the non-Tesla dealership BS. Tesla just has so many things right.

  8. CD says:

    Definitely Supreme Court time! I can buy almost any product from a manufacturer over the internet or over the phone and have it shipped to my home even though the same product is sold locally in stores. That’s legal!! But because it’s a car, I can’t order it and have it delivered to my home?????????????? Time for the Supreme Court!!!

  9. Spec9 says:

    This is great ammunition for Tesla in its court cases. The thing is, a general dealership that sells several cars is going to push the gas cars because they get a bigger profit on gas cars.

  10. ModernMarvelFan says:

    It all varies from dealer to dealer.

    I bought my Volt 50 miles away from my zip code and I drove past 5 Chevy Dealer along the way for a good reason.

    The dealer that I bought my Volt from sells on average 20-30 Volt per month back when I bought mine. Just about every sales person was knowledge about it and they had TWO VOLT on the lot for test drive and they almost couldn’t keep the car charged up b/c the test drives were so busy…

    Then my local Chevy dealer, when I wanted the car, they didn’t have enough inventory. There was only one guy knows a little about it. The Volt was only charged once per day and sometimes they won’t let customer drive it b/c it “ran out of charge”. (Hello?!?!? it got a gas tank, that is one of the selling point just in case you need it!!!!!)

    Anyway, the Nissan dealers seems to be slightly better on average as just about every one of those dealers always has a LEAF expert… Most of the time, when you ask them about it, they direct you to that person.

    Of course, there is the experience only limited to the SF Bay Area…

  11. David Smith says:

    Remember, when you buy a Tesla there is no negotiating. You are paying full sticker price. I work at a Chevrolet store and if we told a customer they have to pay full sticker they would say we are crazy and leave. When Tesla has millions of cars on the road they will have to have franchised dealers. The factory will not be able to handle service, parts, used car sales and new car sales.

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