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Confirmation of Tesla's Sales Strategy
- Thread starter Arnold Panz
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- Tesla Inc.
It does say in faint gray on gray writing "After $7,500 Federal Tax Credit"
Model S Options and Pricing | Tesla Motors
but I agree, it should be a little more obvious though.
All car manufacturers charge delivery fees separate from the cost of the vehicle. I have a feeling this is based on taxes, and can't be combined in the price of the vehicle, but do not know. And as far as I know all the cars sold in the US have the same destination charge (not between manufacturers, or models but constant per model). I know that buying a Ford in Atlanta has the same delivery charge as in Anchorage AK, and Hilo, HI. They average out their distribution costs evenly among all cars sold in the US. I personally like this concept, even though I would pay less for delivery living in a huge city and rail hub.
Oh and I agree about the Fed Tax rebate. Everyone else is just sowing the full price. But then again I don't think they are 100% behind electric. If they were they would probably discount that $7,500 too.
So the main adventage of the Tesla Model that you can't haggle? That you don't have to compare prices? Is that really so? Would it be cheaper to buy the car in America an import it yourself to Canada? I live between Switzerland and germany. If I the car will be cheaper in germany and I buy it there will they still service me in Switzerland wich would be one houre less drive? If the import from germany into switzerland would be cheaper than buying it at Tesla, would Tesla allow the swiss people to buy their cars in germany? As they are all from the same company they might forbid that. (A bath suplier here wich operates in switzerland and austria will sell his stuff to not austrians only for the swiss price wich is over 1/3 more expensive, and as they only have an austrian showroom you see that price difference everytime)
All the ohter complains about dealership seemed to be cases where the dealer tried to cheat you. As at Tesla also humans are at work nothing in the brand name will protect you from that.
All the ohter complains about dealership seemed to be cases where the dealer tried to cheat you. As at Tesla also humans are at work nothing in the brand name will protect you from that.
It's much harder to cheat when all the prices are known. If you go into any non-auto store there is a price tag and that's the price. Neiman Markus may have the same item priced higher than JCPenny does but neither is cheating because you can go to both stores and compare prices. At a car dealer you don't know what the price is because it varies by customer. About the only thing you know is that a Rolls is going to cost more than a Subaru. The only place in Tesla where cheating could happen is in the trade-in and that's really not Tesla but AutoNation.
But shopping for a car you can negotiate at several dealerships, the same way you can compare the price of an appliance at several retail stores. You can walk out when they do sleazy stuff, and you can ask for an "out-the-door" price. ("What's the full amount of the check I'll have to write to own this car and drive away?")
Yes, it's easier and more pleasant with the Tesla flat-price model. And at present, Tesla is providing wonderful service. But this is balanced by the inconvenience if you live three hundred miles from the nearest service center, and by the fact that Tesla's required maintenance costs about ten times as much as a conventional car.
There are advantages and disadvantages between the conventional sales model (walk in and drive it away) versus the internet sales model (configure it on the net and wait for it to be delivered, and no test drive unless you can get to a sales office). I can walk into the sales office of any other car maker right here in Spokane, and test drive any model from Leaf to Suburban. But to test-drive a Tesla I have to fly or drive to Seattle, 300 miles away. I'd have driven a Roadster two years before I did, if there'd been a Tesla outlet in Spokane.
There are definitely advantages to Tesla's model. But there are disadvantages as well. The disadvantage of the conventional model is dishonest dealerships, but that's balanced by the multiplicity of dealerships, allowing you to walk out of one and find one that's not sleazy. Harder, yes, but doable. And with a flat price, you know you're paying the same as everyone else, but you still don't know if that's a "fair" price. Like anything else, it will be the price the market will bear.
The nearest service center is attached to my house. And please don't exaggerate about the costs. My ICE requires four service visits per year, the cheapest of which is more than 1/10th the cost of Tesla service. The most expensive service interval costs several hundreds. Tesla service is a bit more expensive and a heck of a lot less hassle.
The Roadster was a niche market car, so it's hardly surprising there were relatively few stores.
I personally don't care about competition between dealers who are selling identical products that they bought at the same price. The anti-competition laws that try to enforce this silliness are misguided.
The auto manufacturers are competing against each other with their various vehicle models and price points. Even if all cars were sold fixed price there would still be plenty of competition in the automotive market.
That's a very popular sentiment, but I think it's overly cynical. We love to hate car dealers. As I said, with the exception of my first new car purchase, when I was very young, and my opinion of that dealer is colored by the abysmal quality of the car, the dealers I've bought cars from have been decent and have treated me well. There are honest dealerships and salespeople out there. You just have to be willing to walk away from the ones who are not.
You are lucky in your location. Mine is 300 miles away. I do not drive a lot of miles. My Prius needs an oil change, at about $23 once a year. There's a member on the board who will have to have his Model S serviced twice a year due to his annual mileage.
But the nearest store and service center are still 300 miles from me. I think it would be really cool to see and drive a Model S. But I'd have to drive half an hour to the airport, wait a couple of hours for the flight, fly 300 miles in an uncomfortable turbo-prop plane, and then get to the dealer. Test-driving a Leaf, a Volt, and an iMiev involve a ten-minute drive to the respective dealerships. (And I just found out there's a Th!nk City half an hour away that I can drive next time I'm out that way.)
Fair enough. I'm not sure how this relates to my points.
I like fixed pricing. I just think that being 300 miles from the nearest store and service center is a big "price" to pay for it.
My point is that there are good and bad sides to both models. Tesla does not need Spokane in order for the Model S to be a success. But Spokane definitely needs Tesla, and I'm afraid that with the present sales model it may be a long time before we get a service center, or I get to see a Model S.
You missed my point there... the service center attached to my house is my garage, which is where my Tesla gets serviced. I'm 400 odd km from the service center.
Which also suggests the solution to the lack-of-stores problem: ranger service for test drives.
Not feasible at roadster-level sales volumes, but if you get up to the level of enquiries that a roaming sales car can give several drives in a day (having batched up appointments over a couple of weeks), then it could work. The average car plus associated salesperson at a store doesn't give that many drives in one day to walk-up customers, and carries the overhead of the location, so a roaming sales car can make fewer calls and so end up at the same cost per customer.
bonnie
I play a nice person on twitter.
They did that with the Roadster. I received an email saying that they'd be in the Granite Bay area (5 miles from my house) on a certain day and 'would you like an appt for a test drive?. YES! -ahem- I mean, yes. (I kind of knew at that point that their ruse worked.
)Note that this wasn't at the beginning, when people were waiting for a Roadster (similar to the backlog of S reservations today). This was November 2010.
NigelM
Recovering Member
They did that with the Roadster. I received an email saying that they'd be in the Granite Bay area (5 miles from my house) on a certain day and 'would you like an appt for a test drive?. YES! -ahem- I mean, yes. (I kind of knew at that point that their ruse worked.
Note that this wasn't at the beginning, when people were waiting for a Roadster (similar to the backlog of S reservations today). This was November 2010.
Ditto. Except my test drive was about 30 miles away in February 2011. After the test drive I said my wife should also drive it (she wasn't with me) and the answer was "No problem, that's understandable. I can bring the car to your house one day next week, which day works for you?" We live >200miles from the store.....
Daniel, for me it's a time value of money situation. I don't have the time, nor do I want to spend the time, going from dealership to dealership comparing prices and how they treat me to see which dealership in my area is the one who is going to get my business. Who wants to spend hours or days trying to make this purchase? Back in the pre-internet days, my friend and I bought a book that was intended to help us with our first new car purchase. It basically described every underhanded tactic the dealerships would use to try to wring more money out of us, and by the time I was done reading it I felt like I was going into battle against Attila the Hun rather than going to my friendly local car dealer!
I don't think it's a coincidence, either, that young people are foregoing the car buying (and ownership) experience altogether. Generation Y and the Millenials don't see the value in spending that much time on any particular purchase, and expect their car purchases to be just like buying something on Amazon or iTunes -- no hassle, no fuss, and little time expended. One of the many great benefits of the internet is that you can order something from Amazon (or most online retailers) and get exactly the same information and pay exactly the same amount as someone in a dense urban environment. If anything, Tesla's model is far superior for someone in a rural location -- I've got dozens of car dealerships within 20 miles of my home and if I was so inclined I could comparion shop for days, which is probably not an option for you or others in more rural areas.
But I'd rather spend as little time as is absolutely necessary in shopping for a car (or any material item), and Tesla's sales strategy is geared towards that approach, as opposed to every other carmaker where one feels compelled to either invest ridiculous amounts of time or assume they're going to get ripped off.
> ... the service center attached to my house is my garage, which is where my Tesla gets serviced. I'm 400 odd km from the service center.[Doug_G]
Exact same situation here. But the Shop needed a few days to do an upgrade so I put in 1600km pulling the trailer to accommodate them. They put in: new fan, new redesigned rollbar, new fan housing, new 12v batt, replaced shift circuit board, cleaned out filthy PEM, plus a host of fine-points that only they could've come up with. All this for the cost of an Annual. More like them accommodating me!!
Should the need arise, I'd do it all over again- plenty of excess satisfaction here. :biggrin:
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Exact same situation here. But the Shop needed a few days to do an upgrade so I put in 1600km pulling the trailer to accommodate them. They put in: new fan, new redesigned rollbar, new fan housing, new 12v batt, replaced shift circuit board, cleaned out filthy PEM, plus a host of fine-points that only they could've come up with. All this for the cost of an Annual. More like them accommodating me!!
Should the need arise, I'd do it all over again- plenty of excess satisfaction here. :biggrin:
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We are all Tesla fans here. Now put yourself in the mindset of someone who does not begin with the premise that he wants an EV and that Tesla is the premium EV. He's going to shop around. Tesla is just one of many companies he's going to consider. But all the others have local test drives and local service.
Yes, I could have gotten a Roadster test drive in Spokane if I'd been willing to wait six months or a year. This is fine for someone planning their car purchase a year in advance. But I had reached the end of my rope waiting on two other possible EVs (the Porsche and the Leaf) and both had disappointed me so many times that I was desperate. If I was going to test drive a Roadster, I had two choices: wait six months to a year, or fly to Seattle. I'm retired and I can afford it, so I flew. Your average GenIII customer won't feel that way. And they still have not offered test drives of the Model S in Spokane. I imagine they will eventually. Maybe in a year. And maybe someone drives it and tells their friend, but the friend has to wait another year before they come again so he can drive one.
Travelling test drives may be cheaper for Tesla than opening more stores, and some buyers will avail themselves of that. But many car buyers do not plan so far ahead. They decide it's time for a new car, maybe because their old car died and they need a car now. They cannot wait a month or two for the test-drive car to come to their city. But Nissan has the Leaf at a dealership down the block if they want an EV, and all the other auto makers have dealerships in their city. Tesla is the one that does not.
And while my experience with the ranger has been fabulous, John Q. Public will want to know that he can get service locally. Annual maintenance can be scheduled in advance. Breakdown repair cannot. And if there is a problem the ranger cannot handle, the car has to get shipped to the service location (300 miles away, in my case) and it will likely take several days just to schedule the shipping. And after the warranty, or for non-warranty issues, the owner will have to pay for that shipping.
That's all well and good for the Roadster. But people will not buy the GenIII without local service. An they won't buy it without a test drive. Which means Tesla loses all the impulse buyers and people who need a car right away.
Try telling a prospective GenIII buyer that he'll have to pay a dollar a mile to ship his car to Seattle if there's a non-warranty repair item that the ranger can't fix. Oh, and it may be a week before the ranger can get to his home to look at a car that won't go. And a week to schedule shipping if the ranger can't fix it. People expect some hassle and expense with a high-performance sports car. Not with a family sedan.
I've said and I repeat: There are advantages to Tesla's system, as have been pointed out above. But there are serious disadvantages as well, unless and until they have service centers everywhere. That's the key.
Tesla has articulated a plan to have service centers placed across the country, scaled to the local market size. As a company with relatively low sales volumes, it's a given that there will be fewer Tesla service centers than, say, Ford's. It will be interesting to see how this evolves. If I were at Tesla, I'd look at where Jaguar has put their dealerships as a starting point. (And, yes, there is a Jaguar dealer in Spokane. )
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