Comments on the strategy of Tesla

[Cobos]

I do agree that Tesla has to do this right, but I fail to see why they have to use the same system as everyone else. You only buy your car once but get it serviced quite a few times if there's nothing wrong with it, and quite a few MORE times if there is. So I agree Tesla needs a decent service network combined with the service rangers. That might include training and equiping regular garages or doing their own people. Regardless for service you need a service bay or two and no fancy location which should lower the price for these service stations drastically.
Regarding trade-ins I don't see why Tesla should do it as that is just the sleazy part of the car salesman industry they don't want to be. If they have to I suppose they could hand out a business card for wholesale auction that will for a bad price take the problem away, but warn about the issues with that.
This might be a cultural thing I suppose. It might be our car salesmen are a lot more genuinely like here in Norway than they are in the US. The fact that they don't have huge lots full of cars removes a lot of the pressure I beleive. And improves margins quite a bit...

Cobos

 

[mattjs33]

The reality is, Tesla is not following in the same footsteps as other auto manufacturers. They are a leader in technology, and hopefully will be a leader in customer service. The current new car dealership model is a far cry from good customer service.

Great sound bites for the pep rally. How do you forsee Tesla generating the capital necessary to build a nationwide dealership network capable of distributing and servicing a fleet of 20,000 cars a year? What I'm saying is that it would be cheaper, quicker and easier to use one that is already in place. You may argue that Tesla wants to maintain control of the ownership experience, but really you can have below par employees even in that situation.

It's going to be a different sale than BMW sedan vs Mercedes sedan. You don't have to teach those customers about gasoline and spark plugs but Tesla will have to teach their customers about batteries and electricity.

Why? When I bought my cell phone the guy just showed me how to plug it in and told me to recharge it every so often. For the Model S to succeed it needs to function as any other car would in most cases. You just refuel it differently. Most people have no idea how their cars work, they just expect them to do so in the way that they require. It's not the customer's responsibility to confrom the product's needs. It's the product's repsonsibility to fulfill the customer's needs. So while it might be nice to explain the tech to the buyers (beyond the simple act of recharging), I don't feel it's really necessary.

 

[roblab]

Toyota "used the (model) already in place" when they started selling the RAV4EV. They had 20 some dealers approved for selling the EV, out of thousands, sort of like how Tesla might fit in to an existing network. The salespeople were trained for the EV, and there was an EV ready mechanic technician.
Buying that car was the worst experience I have ever had. Current car dealerships are horrible. The "EV trained" salesmen knew nothing of their product, and actually tried to talk me out of it. I had to jump through hoops for 2 months to get my car. The EV technician retrained for the Prius because there was *nothing* to fix on the EV. (How often do you take your cell phone in to get it repaired?) I was actually afraid that Toyota's attitude about the RAV4EV would extend to service visits: They could easily sabotage an electrical part, and you would lose the car. As it was, I went back to the dealer for service twice: 30 and 60 thousand mile service, where they rotated tires and checked my refrigerant. The cars that need maintenance are those that have 600 moving parts. I don't remember ever having to replace a switch or anything other than a headlight in any car, $10K to $100K. Sorry about your cruddy cars.
Your talk of high end dealerships is a little off. I would not own a Cadillac. The dealership network is why. If you don't want something that is ON the lot, it takes a couple weeks to dealer trade, or a couple months to fit it at the factory, no matter what. If you go to buy a Prius, you get level 6 trim package whether you like it or not. I would far rather decide what I want, order just that, pay for just that, and get just that, Thanks.

 

[qwk]

It definately won't happen overnight. Do people seriously think that other automakers dealerships opened at the same time in every state/city?

Tesla will take it slow and then ramp up production. There is very little chance of 20k units in the first few years. Just look at the Leaf rollout, very slow.

 

[strider]

The point to all of this is that after having spent untold millions of dollars developing and building the Model S, I just don't see how it's feasible or even a good idea for Tesla to attempt building a dealership network of this nature, when there are already others with the facilities and know how to sell the Model S for them. If the Model S is the home run that everyone here hopes it will be, you'll have dealers clamoring to be able to sell the Model S. All Tesla would have to do is crank 'em out and collect the money.

Please name one dealer network that has the "facilities and know how to sell the Model S". See roblab's post about the RAV4EV. Both Chevy and Nissan are screwing up the selling of the Volt and Leaf. The salespeople don't know anything about the cars, they don't know how to help people install charging stations in their homes, etc, etc. My contention is that you cannot just drop an EV product line into an existing network - they can't handle it. And it's not just because we're talking about Nissan or Chevy dealers. Ferrari dealers would struggle too. Ferrari probably hires above average salespeople but what do they know about local home electrical regulations?

Eventually selling EVs will be as simple as selling an ICE car. Someday we'll all have J1772 connectors in our garages so then it'll just be a matter of choosing the EV that drives the way you like, has the gizmos that you like, etc which is how ICE car sales work now. But we are a long way from that time.

 

[mattjs33]

I don't remember ever having to replace a switch or anything other than a headlight in any car, $10K to $100K. Sorry about your cruddy cars.
Your talk of high end dealerships is a little off. I would not own a Cadillac.

I make a living selling parts for cars, and it makes no difference who builds them, stuff wears out. People hit potholes. Kids hold window switches after the window is already closed. Sh*t happens. How it hasn't happened to you I have no idea. If I were you I'd start buying lottery tickets. Or maybe you are blessed enough financially to be able to buy a new car every year. The rest of us have to get cars repaired. This is why every car dealership has a service department, I don't care if it's Ferrari or Rolls Royce. And truthfully, engines rarely fail these days. So all that service is being done on other systems. Systems that the Model S will have. Complicated machines will require service, and like it or not, the Model S is a complicated machine, even if it doesn't have a gasoline engine. That's reality.

Even though I like American cars, I don't think that Cadillac rates very highly on the dealership rankings. I was thinking more of dealers that do, such as Lexus. Thanks though for your faux sympathy for what you assumed were my cruddy cars.

 

[mattjs33]

Please name one dealer network that has the "facilities and know how to sell the Model S". See roblab's post about the RAV4EV. Both Chevy and Nissan are screwing up the selling of the Volt and Leaf. The salespeople don't know anything about the cars, they don't know how to help people install charging stations in their homes, etc, etc. My contention is that you cannot just drop an EV product line into an existing network - they can't handle it. And it's not just because we're talking about Nissan or Chevy dealers. Ferrari dealers would struggle too. Ferrari probably hires above average salespeople but what do they know about local home electrical regulations?

Eventually selling EVs will be as simple as selling an ICE car. Someday we'll all have J1772 connectors in our garages so then it'll just be a matter of choosing the EV that drives the way you like, has the gizmos that you like, etc which is how ICE car sales work now. But we are a long way from that time.

Good points about the Volt and Leaf, and the installation of charging stations. I forgot about that. Like you said, in the future it will be different. But I'd still rather place my bets with dealers that are already in place.

 

[Talkredius]

I agree totally with strider.
When I bought my Tesla Roadster nobody from Tesla pointed me to the internet side where I could find private charging stations or could explain in more detail the differences between the Mobil Chargers, or which charging station with which adaptor, if one exists. That are things among many others, which a successfull salesperson for EV has to know and has to tell a potential customer of an EV.

 

[Doug_G]

I think Tesla's main customer base target will be the newer generation of people that are into tech. This is a good idea as your average older white male who buys a higher end vehicle could care less about the environment, energy waste etc. They are just too narrow minded.

You don't see to many baby boomers with Iphones, yet Apple has been very succesfull.

I suspect the average Tesla owner is an older white male with an iPhone. At least that's what I see when I look in a mirror...

 

[qwk]

I suspect the average Tesla owner is an older white male with an iPhone. At least that's what I see when I look in a mirror...

I was mainly refering to the model S and future vehicles. The roadster is a niche vehicle that starts at 109k, so most younger people either cannot afford it or it's just not practical to own.

 

[Doug_G]

I was mainly refering to the model S and future vehicles. The roadster is a niche vehicle that starts at 109k, so most younger people either cannot afford it or it's just not practical to own.

My slightly tongue-in-cheek point was that I don't think the demographics are going to tilt to young people. There are plenty of tech savvy baby boomers, eco-minded baby boomers, etc., and at the price point of the Model S it's still going to be a more established demographic that buys the car. I wasn't buying $60K cars when I was in my 20's.

 

[ckessel]

All anecdotes aside (since I have none), I'm very curious to see what Tesla does for sales/service as they go higher volume. When you have 1500 cars, everyone can get pretty much custom individual service. Selling 20,000 cars is a whole different thing. I'm really excited about getting my model S. I check the damn site every day for new videos. Still, I wonder what I'm going to do if, oh, a tail light stop working. I really don't want to have the car towed 190 miles from Portland to Seattle...

I know there's the Ranger service, but when you've got 10,000 model S, how many minor busted head lights from a truck-thrown rock, broken wiper, power window that stops working, etc. type things are they really going to be able to handle?

I can't escape thinking Tesla will need to partner with someone for those minor types of issues so that people have service centers somewhere nearby. Toyota certainly seems a reasonable choice given Tesla's relationship with them and the upcoming EV Rav4. Even just _one_ Tesla trained service person at a Toyota dealership in each of the major urban centers would help.

 

[mattjs33]

I can't escape thinking Tesla will need to partner with someone for those minor types of issues so that people have service centers somewhere nearby. Toyota certainly seems a reasonable choice given Tesla's relationship with them and the upcoming EV Rav4. Even just _one_ Tesla trained service person at a Toyota dealership in each of the major urban centers would help.

I agree with this. Lexus dealerships would probably be most suited for the level of service a Tesla owner might expect.

Of course, if I am correct in my speculation, and Tesla ends up being a wholly owned brand of either Toyota or Mercedes-Benz, service of the Model S should not be an issue.

 

[Doug_G]

I can't escape thinking Tesla will need to partner with someone for those minor types of issues so that people have service centers somewhere nearby.

They already do this occasionally for minor repairs. I had one of my tire pressure sensors replaced under warranty by a local independent garage, by prior arrangement with Tesla.

 

[smoothoperator]

They already do this occasionally for minor repairs. I had one of my tire pressure sensors replaced under warranty by a local independent garage, by prior arrangement with Tesla.

When I bought my car they said general maintenance such as brakes, tires etc can be serviced by any normal mechanic/tire shop. This will probably also be the case for the Model S, but I think people will have some apprehension taking their Tesla to a Firestone etc for wear and tear items.

 

[roblab]

Even though I like American cars, I don't think that Cadillac rates very highly on the dealership rankings. I was thinking more of dealers that do, such as Lexus. Thanks though for your faux sympathy for what you assumed were my cruddy cars.

i
To be a little fairer, I understand that parts wear out, and more importantly, you supply parts for cars manufactured in the millions, not a few cars in a lifetime. I don't seem to have that wide a base for my comparison. But even though you imagine that engines are the strong points, I need to bring up that the twice yearly auto service recommendations are mainly for oil change, transmission check, belts, and on and on for that little bit of 600 moving parts and their accompanying hardware. I remember replacing failed timing chains, blown alternators, catalytic convertors, doing valve jobs, etc. They have them now, *if* you take tender care of them, where they last up to the 60,000 mile warantee. On the electric, I replaced brake pads, but only because they squealed, and there were "quiet pads" made. I honestly can't think of anything else. My door locks and switches lasted fine on all my cars. The only fire I ever saw inside a car was a Caddy, caused by the front seat motor burning out. And to my understanding, the switches turn off when the window is completely up or down, so that doesn't happen any more. Not many electric steering pumps go out. I'm sure you're right, though, taking millions of cars into consideration. I see on the 'net that a gas car burns up in the US once in every 86 seconds, but that's not really all that many. Or is it?

 

[roblab]

Regarding not knowing how to replace a tail light. You go to your local auto parts store. There the guy or girl behind the register will find the right bulb, and if it's not too busy, even go out and help you put it in. Usually no screws involved. I see people driving around without a five dollar headlight bulb or two dollar tail light out, simply because they have no idea what to do, but your neighbor probably knows and would be glad to show you how. And I see people driving around with headlights mal adjusted (It's a personality problem) and aren't even aware. As an aware person, I keep wishing I could help all these people, but they don't know they need help. Just take it to the dealer. I don't know what to say. Just, PLEASE all you people who are thinking of getting this car, learn a little about it. Thanks.

 

[qwk]

I definately agree. Basic things like lights, wipers, tire changes etc. can be done anywhere.

The drivetrain is what Tesla would service.

 

[smoothoperator]

I definately agree. Basic things like lights, wipers, tire changes etc. can be done anywhere.

The drivetrain is what Tesla would service.

Or the specialty parts inside the vehicle such as instrumentation, electronics, door handles, trim etc. I don't think the drivetrain will be where most of the warranty claims will stem from, it will probably be from the auxillary systems as it is in the Roadster.

 

[stopcrazypp]

So far, besides from a few anecdotes, we don't really have any empirical evidence that proves or provides strong evidence which way is "better". We also have a couple of different metrics: quality of dealer experience, ease/speed of dealer deployment, net cost to Tesla.

The cost thing can probably be roughly figured out from store expenses in Tesla's financial reporting vs dealership expenses (including any difference in profit from the dealer taking the difference in MSRP and invoice) in another publicly traded luxury make, divided by the number of stores/dealers.

But at this point it seems those within Tesla will have to be the one to figure it out. I think what we will most likely see is Tesla sticking to the store model for a while (since initial demand definitely isn't going to be 20k in the first year). If demand gets so overwhelming that it starts to become apparent the store model isn't going to work, then Tesla could always switch to signing up dealers then.

But the recession probably helps implementation of the store, since there were many car dealers wiped out by the recession (I certainly seen plenty close in some of the areas I travel). The estimates I found put thousands closed in the 2008/2009/2010 period. From the GM/Chrysler bankruptcy alone, I think about 2000 closed.