AutoNation CEO: Tesla Delivery Hell Issue Could Be Avoided With Dealerships

SEP 21 2018 BY VANJA KLJAIC 119

This comes right in the middle of Tesla’s shift from production hell to delivery logistics hell.

For those of you that have been hiding under the rock for the recent few years, Tesla doesn’t do dealerships. The automaker does Tesla Delivery Centers and Tesla Stores. However, it seems that just that might be hurting the company’s long-term success. Mike Jackson, the CEO of AutoNation, America’s biggest auto dealership group, claims that if Tesla hadn’t insisted on handling its own retailing, the automaker could have avoided the recent delivery struggles the company is facing.

Last week, Tesla CEO Elon Musk tweeted that his company had shifted from production hell to delivery logistics hell. While Mike Jackson states that Musk should be free to run his business however he wants, he didn’t resist taking a jab at the electric carmaker and its recent growing pains.

“For a boutique-y model, what he’s doing is fine,” Jackson said of Musk in an interview on Bloomberg Radio. “As soon as he wants to do volume, it’s gonna be an issue. Well, here we are, we’re now at the issue. It is hell.”

For Elon Musk, the main problem with traditional dealerships is commitment and cost. After all, most of these dealerships have spent decades selling ICE (Internal Combustion Engine) vehicles. Nobody knows how committed they would be in selling fully electric vehicles. Furthermore, the cost of selling the car through your website and through company-owned stores is minimal when compared to franchise dealerships. The company, in the end, gets to keep a large chunk of change in its pocket by effectively cutting out the middleman.

However, the decision to circumvent the franchise model has put Tesla on a collision course with dealer associations in several states, including Connecticut and Michigan, but also, it put the company in a bit of a bind in markets such as Canada as well. While Tesla managed to win several court cases elsewhere, Tesla and other carmakers face restrictive laws that prevent them from delivering or servicing vehicles.

But ultimately, Mike Jackson may be right. These are still low production numbers (though 7,000 deliveries in 7 days is surely impressive) compared to legacy carmakers. If Tesla is to survive the upcoming onslaught from the likes of Audi, Mercedes-Benz, BMW or VW, it will need to address the rising concern regarding delivery capabilities.

But, in the end, we’re sure that Musk is on the right path to solving this conundrum as well. Meanwhile, with the growing number of Tesla vehicles being delivered, it seems some future owners (Model 3, especially) will have to stay put, hold tight and wait a bit longer, which is likely not a concern, seeing as how dealing with dealerships can be among the most frustrating experiences.

Source: Auto News

Categories: Tesla

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119 Comments on "AutoNation CEO: Tesla Delivery Hell Issue Could Be Avoided With Dealerships"

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Maybe Mike needs to mind his own business.

Go Tesla Go !

Sure, delivery hell could be avoided but another kind of hell that is much worse would be substituted.

I for one have no desire anymore to deal with sleazy Stealership tactics (such as the lies that GM stealership employee MadBro tries here rather frequently) as a customer and I’m sure Tesla doesn’t want to likewise deal with such leaching rent-seekers taking a cut.

Right? Let’s replace a simple 15 to 45 minute delivery experience with HOURS of sitting there watching the sales guy and his “manager” play games with you.Even the one time we got a good price on a car right away, it still took hours to get through it.

Thank you, no.

Go to a better dealership then? I bought a car last year. I spent 15 minutes emailing several dealerships for their “on the road” price of a vehicle I was interested in. I compared the replies, rang the best dealer, spoke to them on the phone for 10 minutes and then organised a test drive. Two days later I spent half an hour in the dealership being shown the details of my new vehicle before driving off.

I was shown it on my own, not with a crowd of other buyers, as is becoming the case with Tesla deliveries.

Yes, some dealerships are crap, but you don’t have to deal with their games and you can benefit from it. I saved several $$k with a few minutes email work, telling x dealer that y was offering me $$ less than them, could they match or better it – which they did.

And besides all that a third party sales system doesn’t have to be a standard dealership system – stop being so closed minded.

“And besides all that a third party sales system doesn’t have to be a standard dealership system – stop being so closed minded.”

What are you trying to say here? A dealer by definition is a middleman who buys from the producer to sell to the general public. The dealer is the third party, and a forced one at that, here in the U.S.

No you can have third party that focus on selling Tesla and know it’s products. Just like a Tesla store with more vehicles

These are all atypical examples of interaction of traditional auto dealers.
I too had such a good experience but had to drive 1 hour to that dealer.
Tell me you can get the same good experience if the vehicle you desire is POPULAR.
Haha!
It’ll be dealer markups and dealer addons.
So no thanks!

In short: you “just” had to know exactly what to do, and spend considerable extra effort, to get a decent experience in the end… Sorry, I’d much rather go to the nearest Tesla store, without having to worry whether I’m doing it “right”.

The only thing I get from your comment, Andy, is that it appears very likely your income is directly or indirectly dependent on one or more auto dealerships.

At Tesla you get the best price straight away from a website and you can order it from your home. Why would I want to go through the hustle of contacting a number of dealership, haggling to get a better price when you can have a business model where the best price is given directly?

Emailed the highest volume GM plug-in dealership in QC and Canada. Had a few e-mail exchanges and one phone call later had a driver leave a demo Volt and he took away my vehicle. I test drove the Volt demo for two weeks no commitment. Decided I liked the Volt and agreed to the offer on my vehicle. The delivered another Volt demo and took away the one I was to purchase to prepare for delivery. When the paperwork and car was ready I drove the Loaner Volt back to dealer and took mine after a few signatures. Best Dealer experience ever. SO when TESLA is ready to come and deliver a demo M3 to me I’ll be ready.

(⌐■_■) Trollnonymous

I emailed a stealership about a Volt quite a while back, said they had one, scheduled a test drive, came in and they “couldn’t find it” and offered to let me test drive a “better car, the Cruze”.

When they did have one a few weeks later there was a $3000 markup.

Effen STEALERSHIPS!!!

If the demand for Tesla’s TM3 was as low as the demand for Chevy’s Volt, then quite possibly Tesla would allow you to take an extended test drive. Fortunately for Tesla, there is much, much higher demand for the TM3.

Dude I went to get my car fixed for one of your airbag defects fixed at your stealership that you said would be for free and I’m down $1,500 in the hole and the airbag light still flashes.

Not to mention your dealership tried to hold my car’s inspection sticker hostage for $3,000 dollars in repairs that two other local places said I didn’t need.

In terms of Tesla getting cars delivered it’s really not that bad in that they are having no trouble delivering them they are having no trouble whatsoever finding people to deliver them.

Circumstance is unique. Tax credit ending, order back log. On the off chance demand peels back a little, when things normalize, Tesla shouldn’t want to bloat itself with dealers.

They would also have to share better service manuals. Eek.

Maybe if they would be allowed to open all the stores that they want to open, they would not have the issues that they are currently having.

The stores aren’t the problem. Sales is fine. They don’t need more stores. It’s the delivery centers that are the problem.

One of the ways to get out of delivery hell is to ask help from Tesla Owners who will be more than happy to put some volunteer hours in exchange for talking about their vehicles.
The DAs can take care of paper work and vehicle inspection and the Tesla owners can take care of vehicle familiarization which can speed up the process quite substantially without incurring additional expenses.
Dealers, man I hope that Elon doesn’t consider this option as we are all very happy to deal with Tesla and I don’t want to deal with the dealers. This is just going from one small hell to another bigger hell for everybody

I did apply for several local jobs to deliver Teslas for the local Tesla Service Center and they sent me several rejection letters and with that said I think they are having no trouble finding paid people to deliver cars.

Logistics hell is not very nice, neither is dealership hell. But when my Tesla arrives I am certain that my waiting hell is over, whereas in 30 years of driving I never managed to escape dealership hell.

“You should quit doing something because is hard” Mike Jackson 2018

That’s what Autonation pays Mr. Jackson “$12,186,944 in total compensation” for. $12 million dollars a year for gems like this one.

https://www1.salary.com/Mike-Jackson-Salary-Bonus-Stock-Options-for-AUTONATION-INC.html

What a Waste of money. So he Works 10yrs & Retires Rich ! Good for Him…

Autonation dealers are the worst. No one i know will buy or service a car there.

I did back in December.

They lied and said my credit union turned me down, but they had me approved at another CU. Interesting!

Turns out I was never turned down by my CU, in fact they approved me, but the other CU was paying 2% to the dealer, and mine was only paying 1%. Go figure!

Some people STEAL from Others their Entire Lives and make Lots of money and have a Good Living Doing this …I Hope There is a Heaven in the Aftelife ….. AND A HELL TOO !

Yeah and it’s no wonder why most people equate the average car dealership to the equivalent of pond scum

Teslas one price direct to consumer business model is perfect for this modern-day world. Quite refreshing actually.

Of course, had Tesla gone the dealership approach in the USA, most potential customers would have been persuaded to buy ICE cars instead. What dealership wouldn’t like to have the problem of having to hire extra staff and staying open til 10:00pm just to process sales, and with no time spent haggling!

Why would a TESLA dealer go and persuade someone to buy something from another brand?

I guess this argument is a hangover from other dealerships persuading people to buy ICE vehicles of the same brand, but it makes absolutely no sense for a dealership selling exclusively Tesla vehicles, unless the salespeople are a special kind of awful.

The whole anti dealership argument really boils down to cost. Tesla think they can make more money selling direct, by cutting out the middle man. The rest is just fluff – sales tactics can be controlled by strict dealer requirements, if the dealer falls foul of them they lose the option to sell Tesla vehicles and go out of business for example (as the dealer is selling ONLY Tesla vehicle).

So you would like to have dealer margins on top?
Do not forget dealers need big margins on tesla because of the changed service requirements.
(I know where „my“ mercedes dealer makes money. It is not the sale of the car. More like refilling adblue at service, and for 4times the price you pay at gas satation. Company car, but still…)

Depends if the dealer margins were more than the economies of scale and efficiencies of selling though a third party network.

The direct sales method isn’t something no other manufacturer could do, yet all those manufacturers (not just car manufacturers) see it as a more successful method of sales. There’s a reason direct sales are primarily left to small (volume) independent companies and TV shopping channels. If it was a viable, cheaper method of selling/delivering your product then large companies would be doing it.

That’s not to say I like the way many dealers do their business now, just that a third party sales system is generally beneficial for the company involved (and subsequently, usually, the consumer).

If there was no advantage to selling cars directly, the dealer associations wouldn’t have lobbied to install “franchise laws” just to keep them in business.

You are describing a vacuum of perfrct supply and demand all balanced in the market.
In Yankee land there are actual laws that stop manufacturers from doing this…
Regulate for the rich and degruglate for the poor the Yankee way!!

Exactly. Dealerships are franchises and the franchisee does have some control. Think about all the franchised restaurants across the nation that nearly everyone eats at from time to time. Most have consistent food quality, consistent service and consistent ambiance. Usually the only discernible difference coast to coast is regional price differences. In theory, a Tesla dealership anywhere in the world could provide the exact same experience as any other. Just because they are a franchised dealership doesn’t mean they automatically have to suck. It all comes down to the contract agreement that Tesla would have with it’s franchises and the level of control that Telsa would maintain.

A serial Tesla basher defending the stealership business model.

What a surprise… NOT!

A serial name caller calling somebody a serial basher and not reading for comprehension. What a surprise… NOT!

Once again, Andy, your comment reads like an advertisement for your local auto dealership.

Dealers make most of their money on service, not on sales. That means they want to sell you the car which will need the most service. If the dealership sold both EVs and gasmobiles, you can bet they’d be trying to “steer” customers into gasmobiles rather than EVs.

And contrary to the rosy picture you paint of a “painless” car buying experience, most car buyers — not just some, but the vast majority — say it’s a very unpleasant experience. The fact that we can find lists and advice all over the internet for how to avoid the shady and even outright dishonest tactics that stealerships try to pull when selling a car, or trying to overcharge you for service, is a pretty good indication of just how common those scams are.

See, for example: “10 Biggest Reasons Why People Hate Car Dealerships”

https://www.cheatsheet.com/automobiles/10-biggest-reasons-people-hate-car-dealerships.html/

It will be Tesla exclusive. I didn’t know Tesla make gas mobile

Pu-Pu doesn’t read very well or think much about concepts beyond his rigid beliefs.

It’s amazing how commonplace it is to find unintentional irony, accusing others of what they themselves are guilty, in serial Tesla bashers’ comments.

Reality is, growing pains are growing pains. When you’re on an exponential growth curve like Tesla, there are going to be some stretch marks from time to time, regardless of what distribution model they are using. The nature of the rEVolution is that demand is going to far outweigh production for a while and the rest of the automakers are going to experience this too and even worse, since most of them are totally unprepared for the brutal competition and the inevitable obsolescence of their entire ICE product lines. They will need to invest quite a lot into this transition and many of them simply can’t afford to, especially as their existing profits get eaten away. Dealerships are worse on almost all levels and are a detriment not an asset. The old guard automakers are trapped in this model, since the dealerships would fight them if they tried direct sales. Tesla will be able to continue to have all the benefits of a direct sales model: online orders and customization, better control of their prices and margins, control of the sales and delivery experience (no sleazy salesmen) and lower costs to customers by cutting out the middle man. I have… Read more »
The “dealership” model isn’t restricted to cars, in fact outside of small volume more bespoke operations I can’t think of any industry that doesn’t have some form of third party sales system in place. Even a company like Apple, who run their own flagships stores, sell most of their products through third parties (coverage providers and third party shops). Expansion is a lot easier and quicker if you as a manufacturer let someone else deal with parts of the process – in this case the delivery. Tesla aren’t being “unique” here, they’re just rehashing something that has been tried hundreds/thousands of times – and every time when sales volumes increase the system has been found wanting, with manufacturers eventually farming out significant parts of the process to increase growth. It’s unlikely Tesla will be any different. The benefits you cite are not generally exclusive to direct sales either: ” online orders and customization” – Most manufacturers allow this. You can go on to their website and spec a car any way you want, a couple of months later it’s delivered to a dealership and you can go and pick it up. The reason it’s not more popular (at least in… Read more »

I hear a lot of “can” and “could” here, yet pretty much everyone agrees that car dealerships are terrible. Clearly the model does have flaws that are very real, and hypothetical solutions do not help.

You’re spending an awful lot of time and effort writing multiple long posts, Andy, to defend an outmoded and soon to be obsolete business model. The only reason local auto dealerships were able to create local monopolies for car sales is because they arose in the age before the Internet, when people couldn’t get accurate information on what they should be paying for a car.

Now that it’s fairly easy for anyone to find the dealer’s costs, and what the average selling price is, by spending a few hours or at most a few days researching online, the dealership model is a dinosaur, headed for extinction. Monopolies, even on the local/regional level, are no longer possible for automobile sales. People these days can and do drive hundreds of miles to get exactly what they want and to find a better deal, if needed.

The question isn’t whether or not selling automobiles will, sooner or later, cut out the middleman of the commissioned dealership; the question is how long that will take.

Tesla isn’t merely leading the way in the future of automobiles; it’s also leading a revolution in how automobiles will be sold in the future.

“The Tesla Semi will also offer a unique ability for Tesla to also cut its delivery costs, by providing its own transport services.”

I missed this part.

Tesla aren’t unique in building large lorries as well as consumer vehicles, yet those other companies still employ third parties to deliver their vehicles because it’s cheaper in the long run. They sell the lorries they could be using to deliver their vehicles to others, gaining money they can then invest back into expansion, paying off over a number of years. It’s another fairly standard part of most industries. Sometimes it’s cheaper to use your own product, others it’s cheaper to sell your product and bring something else in to do the work you could have done.

Yes and no. Many large organizations, like Volkswagen that owns a number of brands in a number of industries does not want to compete with the exisiting customer base but also wants to cut cost.

That’s for historical reasons as well as practical.

With everything in house you can cut costs and margins in some ways. With outdourcing, you can by cheaper because smaller companis does not require corporate governance. Who asks the local delivery serive if they are accoutable to standards and tdo they care if they use conflict minerals. Most don’t, as long as it’s cheap.

Using smaller comapnies makes larger comapis have distance to the dirt.

True, but the main reason is usually that they can make use of the money/equipment more efficiently.

What’s better for a company? Saving 1% on cost now by using $1B of vehicles for your own use, or selling those $1B of vehicles and putting most of it into a second factory so you can build $2B of vehicles in the same time frame, while spending $100M a year for 10 years on leasing other vehicles/companies to do the job your $1B of vehicles were going to do?

Obviously the answer is not a given, as we agree, it all depends on the companies forecasts and specific situation, just as the question of up front cost of building a battery factory or longer term costs of contracting someone else to provide the batteries.

OK, I’ll bite. How does “Conflict Minerals” come into play with an automobile delivery service?

Probably an anti-EV talking point that got slipped in by mistake (cobalt). Never mind that the world’s number one conflict mineral is petroleum.* But, I digress.

* (Yes, I realize it’s technically not a mineral.)

I do hope that tesla does not give in to dealerships.

Hahaha! Dealership model is the way to go?? Yeah, ok. If I recall, the only reason that dealerships gave to refute the Tesla direct sales model was that they “protect the customer.” From what, Lord only knows. Kinda like the Mafia thug who shakes down businesses monthly in order to “protect” them.

Dealerships = Rats in the maze, protecting their maze.

Tesla has many options outside of using a franchise dealer network to distribute its EVs.

For example… Amazon.

Considering Tesla’s MO to-date likely Tesla’s delivery system will eventually evolve to be factory direct to home eliminating all the steps in-between. When full autonomous driving becomes a thing perhaps the car will roll off the factory assembly line and deliver itself to its owner. The exterior protective paint shrink-wrap could be left on for the owner to remove at delivery… like unwrapping a present. Perhaps the delivery point instead of home will be the nearest Tesla Supercharger.

Very cool alternative.

Great until you realise your car has just been delivered with a few hundred km on, not been washed, and possibly damaged on the way to your house.

How terrible — it’s in a state it would otherwise be in only after a few days of use…

I think the majority of car buyers would be happy to accept a car that needed to be washed immediately after purchase, if that would save them a few hundred dollars.

Regarding damage en route, the customer always has the option to refuse delivery.

You’re rather desperate, Andy, to grasp at straws to find reasons to defend the stealership model. Why is that? C’mon, fess up: Your income is directly or indirectly dependent on a traditional auto dealership, isn’t it?

Car company would go bankrupt

Stop these insinuations, please. While Andy clearly has some favourite topics he likes to argue in surprising depth, he is also one of the few people here who always do so in a rational way, and actually listens to what others say, rather than just repeating already refuted arguments over and over.

Insinuations? This isn’t merely an insinuation: It’s obvious that “Andy” is vigorously offering apologia for the dealership model because his income depends on it.

Still far out in 50s think now

Of course AutoNation wants a piece of the pie, now that they feel that the pie is worth eating. But how many pieces have they sold in the past? How many sales people have been able to spell EVs? So far most dealers have only shown that the react to money. They have and still totally miss what people want.

Screw dealers. I can solve this problem in a jiff. Just parter with Costco. Have them be exclusive distributor of the car and offer the car as an appliance. You go to Costco, they’ll keep 20 or 30 cars in stock at their lot… you see the one you want… give your membership and your check from your bank, and charge or write a check for downpayment, Costco can streamline the registration and you drive away, easy as buying a mattress. If the car is a mess, they’ll give you a coupon where you can get the car washed or detailed. Tesla sells the cars to Costco in bulk at a discount rate and Costco will sell them at the MSRP.

Congratulations. You’ve just turned Costco into a Tesla Dealership.

So much for screwing dealerships… 😉

You’re welcome.

Not at all. Tesla could give Costco a fixed amount for selling one of its cars. Very different than the stealership model. No haggling, no attempt to “steer” the customer into buying a car that will give more profit to the stealership, no playing games with financing, no “upselling” of overpriced or even useless options, no artificially inflating the MSRP with “dealer holdback” to make sure the buyer pays an inflated price even after haggling.

But this would have to be different from the existing Costco Auto Buying Program, which according to the article linked below, still leaves you with the hassle of dealing with a local auto dealership; possibly a stealership which can still add on useless “upsells” and still cheat you by padding the cost with fake “fees”.

http://www.realcartips.com/newcars/340-buying-car-costco.shtml

I think that’s how dealers get thier cars from the facilities is by fixed price for allotted amounts

@TJKR said: “…Tesla sells the cars to Costco in bulk at a discount rate and Costco will sell them at the MSRP.”
————

No need for Tesla to sell the cars to Costco. The sale could remain a Tesla direct sale with Costco serving as the “delivery agent”.

Though Costco partnering with Tesla may get some objections from Costco’s existing franchise dealer partner program for pre-owned and new cars… a big business for Costco.

That’s not unique, several manufacturers already do that, selling direct but using the dealer as the delivery agent.

Please name one, and what state they are doing it in.

Only in Europe, not in the US.

Tesla Wants Zer0 Partners ..and I Can’t Blame them..

Tesla is quite happy with their battery making partner, Panasonic.

But partners with whom they would have to split their profits, like independent dealerships, need not apply.

Partners Like Dealerships That Can “ROB THEM BLIND” By doing or NOT DOING all kinds of Unnecessary and/or Fake Warranty Work So That they Can get Paid Free Money & Free Parts Instead of Really installing them , They stock them & Sell Them Separate.. There is BIG MONEY In These and Other Dealership Scams . Fake Parts and Labor Charges & Etc: & So On ..

Panasonic is not always so happy with Tesla, though.

Only an idiot would agree to be a Tesla dealer. Make a huge investment, suffer losses when Tesla completely screws up the logistics, then have Musk publicly blame you and set up a Tesla store down the street.

Just ask the body shops who invested in custom equipment to repair Teslas.

“Panasonic is not always so happy with Tesla, though.”

Good point.

I totally disagree with the author. Auto Dealers are the worst places to go. I cant stand talking to the sleazy salesman. I just dont like being there for even a minute.

It doesnt matter if we are talking about Toyota or Porsche Dealership. Every minute spent there is hell.

Well, he’s right in one aspect. If Tesla would rely on stealerships, there would be no delivery hell. Because they would have had made sure years ago to get Tesla out of business. Just look at the structure of staelerships in US. In many places, there are stealerships that sell different brands on different lots but belong to the same parent company. There are cities where all stelaerships are controlled by the same company. Whichever brand one buys there, one always gets the “best deal” (a.k.a. “taken to the cleaners”). And without production, clearly no delivery hell to be expected. Problem solved, greedy sleazy person’s way, continuing ICE sales until eternity (except Florida, LA and NY, cause those will be submerged once the polar ice caps melt). Luckily, we have Elon Musk and Tesla, and hopefully he succeeds, so the only polar ice caps to melt will be the ones on mars (in that case, required for terraforming to make the planet habitable).

You can restrict the license to only Tesla cars and if they owned others just be real tight with them

He is right. Delivery WOULD be easier. However, the car prices would be 5-10K higher and the service would SUX against what Tesla has given.
IOW, No thank you.

Sadly, like the fricking UAW, I think that Dealers will be screaming to get a chunk of tesla. IOW, they to make money for nothing.

Why would anyone call the coming cars from other manufacturers an onslaught.
Analysis is that the are able to make those cars only in small numbers and those cars are inferior to the Model 3.
Tesla will solve this problem like it does every other. Eventually they will figure it out. Delivering cars is not rocket science.

Because they know the market extends more than two years into the future.

And yes i’m sure Tesla will solve the issue. They’ll probably do what virtually every company has done when they get into this position. Start contracting third parties to deal with the delivery and consumer sales part of the business.

Right, maybe they collude with each other not to make cars too competitive stopping improvements to their vehicle, because other manufacturers can’t afford to do so. Like they did with anti-pollution equipment.

No thanks, that just adds a layer of nearly-useless middlemen.

Yup. It was pretty telling when that auto dealership association rep made that public statement defending dealerships by claiming dealerships are the best way to protect car buyers. Talk about brazenly shameless!

Yeah, they “protect” customers from getting a fair deal!

https://www.forbes.com/sites/pikeresearch/2013/06/05/dealers-fight-tesla-via-legislatures/#67d994d61037

Well, whatever the point or model is, one thing I can say is that Tesla directly controls its own store so its staff knows far more about the car it sells than any typical employee of dealership for their respective stuff.

It is like comparing the Apple store staff vs.Walmart staff on selling of the iPhone. They aren’t even close.

Tesla wants to control the entire experience. The dealerships just can’t do that. That is the point that Tesla should use to go after dealership.

I don’t deny that there are some good dealership. But overall, the bad or subpar dealerships overwhelm the good ones. On company directly controlled stores, they are at least specialized in the product that they are trying to sell, unlike many dealerships out there.

Yet would Apple be as successful as they are now if they didn’t sell through Walmart and only through their own stores?

I don’t know anybody who bought an un-subsidized iPhone at Wal*Mart. Everybody I know with an iPhone got it from their carrier service, such as Verizon or AT&T or T-Mobile, all of which have their own specialty stores… which are a lot like Tesla stores, and not even remotely like Wal*Mart.

If Wal*Mart sells phone subscription services which include an iPhone, then Wal*Mart is acting as an agent for the phone carriers… not for Apple.

So… analogy FAIL. A true analogy would be some service which includes a Tesla car as part of a package deal you get by paying for a monthly subscription. Good luck finding an example of that!

Mike Jackson should not be wasting his time worrying about how Tesla is going to solve its delivery problems. Every time Tesla overcomes one of their problems they create another one for the rest of the auto industry.
He would be better off concentrating on how to sell the kind of used cars people will want in ten years.

Oh. Maybe that’s exactly what he’s trying to do…

Screw dealers – the last time I went to buy a car stealership tried to defraud me of an equivalent of +-20% of cars price.

Rebel44, Same Here . I Got Mercedes Lemon yrs Ago , After a BIG To Do & Fight With Mercedes ,,Mercedes Exchanged the car for another New car …The Crooked Dealership Principle Attempted to Charge Me The Sales Tax “TWICE”….He Said, “Because it was a Different New Car” ….l m a o ..What a Stupid Crook !

No thanks, we are very happy going through delivery hell, instead of scam hell.

I HOPE DELIVERY HELL STAYS FOREVER & NEVER GOES AWAY.! …Not Being Able to Keep up With a Crazy High Volume Number of Deliveries is The Greatest Problem that any Company Could Ever Have !

Why is it a hell? It is a “heaven” for Tesla. It would be a hell if there are only 1 order per month and they can only deliver 1 car per week…. With all that revenue flowing in, it would be “heaven on earth”… Any other automakers would love to have that “hell”.

Maybe it is a “hell of good time”…

Right! Delivery “hell” is a problem that nearly all manufacturers in the world would love to have; a problem which leaves Tesla crying all the way to the bank! 🙂

I Believe dealerships would be a good solution. However, electric car dealerships must be revolutionized to fit this new product.

This would give way to a new generation of EV enthusiast to partake in this venture. Away with the old, in with the new. A new electric car “eco system.”

When production ramps up and delivery gets real crazy Tesla’s attention would be divided between it’s core expertise and Human Resources.

Imagine if the other manufacturers owned all their dealerships, they would have a tremendous amount of employees to manage. Not to mention labor union problems

I would suggest, to stay relatively small on Human Resources and big on production.

Tesla and Musk have definitely considered franchise dealerships in the past to handle volume production and delivery.

I wouldn’t worry about a Tesla dealership being anti-EV. Think of the absolute Tesla fanatical extremist that would love to own and operate an independent Tesla store!

“O’Connell tells PopMech that the EV-maker is not ruling out the possibility of establishing its own dealer network once the company grows large enough. “Elon and I have both said that there is a time when we will also want to sell our cars through franchise dealers,” O’Connell says. “When we’re selling a high-volume vehicle, hundreds of thousands a year, it’s going to make a lot more sense to place 100 cars at once with a franchise dealer than to sell them one by one as we do right now.”

https://www. popularmechanics. com/cars/a9265/do-we-really-need-car-dealerships-anymore-15748322/

And if that does happen suddenly many of the people so vehemently opposed to them will decide that they are actually a great way of selling now Tesla have grown…

Not unless Tesla starts using commissioned salesmen using high-pressure sales tactics who treat customers like con men treat “marks”, the way stealerships do. And not unless Tesla starts making each of its service centers rely on making its own profits to stay in business, which would give them a motive to cheat and overcharge customers just as legacy stealerships’ service centers do.

Even if Tesla does resort to dealerships, that doesn’t mean they have to abandon their no-haggle policy, nor their policy of paying sales staff an hourly wage rather than a commission, nor their policy of making service centers revenue-neutral, so they have no incentive to overcharge their customers.

You cited an article from 2013. Since then, Tesla has come up with the “Delivery Center” business model, which hopefully will work far better for them than resorting to the outmoded “middleman” business model of the traditional dealership.

Quoting from a much more recent (Dec. 2017) article:

The inside of the new delivery center could handle about 100 deliveries at a time, while another several hundred or more could happen in the parking area in front of the building. This is a very important step for Tesla since it doesn’t have a vast network of traditional dealerships throughout the country.

https://insideevs.com/first-look-inside-teslas-model-3-delivery-center/

Why would Tesla get sucked into a century of Dealership Hell just to avoid a quarter or two of Delivery Hell that they will eventually figure out? Just like all the problems they’ve overcome over the years that the automotive industry said Tesla could never survive.

What is wrong with dealers? Its all there in the movie “Used Cars.” Its laugh-out-loud funny because its just a small exaggeration of the ridiculous antics and claptrap that dealers say to sell cars. (Kurt Russell: “No mam, it wasn’t a taxi. That’s yellow primer.”)

One of my favorites! Among the many memorable scenes in this hilarious farce from 1980 is where they use a pirate TV station to broadcast a commercial which, shall we say, uses language and pyrotechnics not normally seen and heard in locally produced TV commercials:

JEFF (Gerrit Graham): Yessir, that’s New Deal Used Cars… Now wait just a G–d— minute. What the hell is this? Is this a 1974 Mercedes 450SL for twenty-four thousand dollars!?! That’s too f—ing high! [blows up car with dynamite.]

Tesla didn’t really have a choice. When you look at how Nissan dealerships are sabotaging Leaf sales by refusing to sell them, you realize that it was a no-good option.

I tried looking at a bolt, volt, ionic and new leaf. No dealer new a dam thing I had to educate and or argue in every single dealer I went to.
I turned around and walked out of Nissan half way through one of the morons sentences after he told me I would need a charger and my office. This was directly following me telling him I have a 13km commute one way……
I ditched my model 3 reso and bought a used leaf private sale, cause I only buy used private. Been six months and the 100km real world range is killing me.

(⌐■_■) Trollnonymous

Eff you STEALERSHIPS!!

Yes and the stealerships would see the demand and use it to jack up prices, scamming Tesla owners

Yup. Some Chevy dealers were tacking on a “dealer markup” as much as $5000 during early months of Bolt EV sales. Can you imagine how much they’d jack up the price on a car with as high a demand as the Tesla Model 3? 😯

*shudder*

If Tesla were able to deliver the base Model 3 for $35k today, in a fictitious scenario with limited numbers (no more than 5k per month), and the Stealership consortium were able to somehow appropriate and scalp 1k per month of the Tesla 5k supply stream, the ICE OEM Stealerships would potentially make out Bandits.

A $5k markup or possibly more, would be easily extracted by these “dealers”.

Such a predictable swipe… Except it’s total BS. Independent dealerships wouldn’t have helped in any way with the issue of delivery volume suddenly going up by a factor of more than five within a few months. Coordinating the sudden scaling at just the right moment, after months of waiting and several false starts, is something that would have been outright impossible with a network of independent dealerships.

Tesla is just not geared for high volume, it was OK for Model S and X, but now with so many M3 to be delivered, they need to rethink the way they operate, taking regular employee to deliver cars is just not feasible in the long run

Tesla has the solution: dedicated Delivery Centers. They do need to open lots more of them nationwide, rather than just a few in California.

https://insideevs.com/first-look-inside-teslas-model-3-delivery-center/

“Tesla Delivery Hell Issue Could Be Avoided With Dealerships”

CEO of AutoNation, America’s biggest auto dealership group, suggests Tesla should abandon its clearly superior direct sales model, and adopt the traditional stealership dealership “middleman” business model, where Tesla would have to split its profits with independent dealers, and subject customers to the hassle and stress of high-pressure salesmanship.

BWA HA HA HA HA!!

In other news, makers of typewriters and adding machines suggest we should abandon personal computers.

😆 😆 😆

You still have to deliver them to the dealer, it sounds a bit self serving to me.

Go Tesla! Not only are you killing the horrible internal combustion engine but the awful auto dealership that has mistreated, lied and stolen from me my whole life! Seriously my Model 3 delivery couldn’t have been easier and with so little maintenance required don’t think I will miss dealerships.

And let me guess, the want the “opportunity to take on that hell”, right?

Maybe Musk pay dealerships for places to land his rockets as well. Just think, he wouldn’t have the headache of having to pay for all those expensive landing pads up front.

The answer is not dealerships. A better solution, which solves two problems for Tesla is to roll out Delivery/Service centres near concentrations of populations. Customers can collect their cars from the location where they will go for service or repairs. Dealers will dilute Tesla’s profit margins when there is no reason to. Tesla has to solve the problem of establishing local service centres. Why not locate deliver services there too?

I’d take delivery hell over sales manager runaround hell every day.