Tesla Has Plans To Have 50 Boutique Stores In Play By Year's End...Provided They Can Keep State Law At Bay
With Tesla facing some strong opposition to their direct-sales model, the company is bulking up its business development team according to a report filed by Reuters.
CEO Elon Musk Vows To Make A Larger Personal Effort Talking Up Tesla's Reasoning Behind Going It Alone When It Comes To Sales
Tesla's CEO Elon Musk feels that more interaction with local politicians in the key battle states is needed, and that the fight the company is facing might not be the fairest:
"At the state level, very often, the car dealers are the biggest funders of local state politics. That's been a problem for us obviously."
To that end, more personnel will added be to Tesla's business development team that is currently waging both a legal and a PR battle in states such as New York, Massachusetts, Colorado, Virginia, Texas and most notably in North Carolina - where the automaker is even facing being banned from selling and communicating with potential customers via the Internet.
How large a battle will this team face? According to Mr. Musk, pretty big:
"We need to apply more resources to this because we're finding that it's a multi-front war. They outnumber us at least 10 to 1, maybe 20 or 30 to 1."
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To aid in the fight, Elon says that he will also get more personally involved in talking up the company's direct sales-boutique store strategy. Without it, the Tesla boss says the company will not succeed.
"It's a tough battle we face. We don't necessarily have all the answers. I certainly believe that if we were to go through the regular franchise system that we would not succeed." - Elon Musk at the Reuter's Global Technology Summit on Tuesday
Tesla feels that direct sales help to even the playing field on electric cars versus traditional cars that have much lower production costs, as well as salespeople and dealerships that really do not want to sell them at all. According to Musk, "It's (electric cars) harder to sell, and then they (dealerships) make less money on service, so for sure we would be the last thing they would sell."
Tesla currently operates 34 boutique stores worldwide, but will expand that number to about 50 by year's end.
According to the Center for Automotive Research, and reported by Reuters, auto dealerships across the country actually paid more corporate income taxes and license fees to their home states than the automakers and part suppliers themselves; and at $458 million to $295 million...it wasn't even close.
Tesla is in for a tough battle indeed.