NADA full page ad in back to LA Times today

[Red Sage]

Elon has said that dealerships may be required when a sufficient volume is reached. Whether that is with Model III or later we will have to wait to see.

I'm very certain this was 'lip-service'. There is absolutely NO reason why Tesla Motors should EVER have to use 'independent franchised dealerships'. I believe that Elon continued, saying that that Dealers never had a satisfactory answer when he asked them how many cars they wanted to order... He takes the phrase 'in good faith' very seriously when it comes to business negotiations.

"How many cars do you want to order?"

• Think you can move two, maybe three cars per quarter?

Get out.​

• Think it would be cool to put in a standing order of 10,000 per year?

Tesla can move that many in under three months, in Los Angeles County alone.​

• Projecting a 150,000 unit minimum target over the first three years?

Now you're playing with electricity!
​

I believe that Dealers are afraid Tesla won't be like Apple at all. They are afraid that there will never be a wider distribution channel. They are afraid that Tesla will hit it big, and they won't be at the table, let alone get a slice of the pie. But until such time that Tesla Motors is free to operate in the grand majority of states, it is prudent to at least give them the slightest glimmer of hope.

 

[flashflood]

Laughed so hard reading that ad. Kept thinking of this classic:

people skills office space the bobs - YouTube

 

[Zythryn]

Is the OP sure it wasn't really an ad, but the Comics??

 

[Ven Rala]

I'm very certain this was 'lip-service'. There is absolutely NO reason why Tesla Motors should EVER have to use 'independent franchised dealerships'. I believe that Elon continued, saying that that Dealers never had a satisfactory answer when he asked them how many cars they wanted to order... He takes the phrase 'in good faith' very seriously when it comes to business negotiations.
I believe that Dealers are afraid Tesla won't be like Apple at all. They are afraid that there will never be a wider distribution channel. They are afraid that Tesla will hit it big, and they won't be at the table, let alone get a slice of the pie. But until such time that Tesla Motors is free to operate in the grand majority of states, it is prudent to at least give them the slightest glimmer of hope.

Agreed. I think Elon just mentioned the possibility of dealerships in the future to try to have a compromising stance. It would be a travesty for Tesla to start working with dealerships. They have a great new model that makes common sense. Everyone I speak to about this issue (even those that know little or nothing of Tesla) agree that they should be able to sell anyway they want. NADA is in a losing battle. But of course since they have the state legislatures in their back pocket, so it is still a fight Tesla (and we as owners/enthusiasts) need to make sure they don't win.

 

[James Anders]

If not independent franchised dealers then how about Tesla owned and operated "dealers" that are equipped to do more than the current arrangement? Like, handling trades, inspections of used Teslas (I did read on this forum that someone tried to get Tesla to inspect a used MS and they wouldn't do it).

 

[ItsNotAboutTheMoney]

If not independent franchised dealers then how about Tesla owned and operated "dealers" that are equipped to do more than the current arrangement? Like, handling trades, inspections of used Teslas (I did read on this forum that someone tried to get Tesla to inspect a used MS and they wouldn't do it).

I think they'd prefer not to handle them, but most states (not CA!) allow you to deduct sales tax on a trade-in. The problem with any hook-up with a used car dealer like CarMax or AutoNation would be that the used car dealer would need to know that you're doing the trade to get a Tesla and they'd exploit the leverage. However, the value depends on the level of sales tax and the value of the car, a d given the difference between private party and trade-in offers it could be better simply to try to facilitate private party sales instead.

 

[Ssssly]

While most on the forum can see thru this propaganda, there are visitors to the site that might need a point by point rebuttal. Feel free to add as I'm not the most eloquent debater.

10 REASONS TO BUY A CAR FROM A DEALER

1. Expert advice
Dealers can provide a wealth of expert advice to help you determine which vehicle best suits your need and budget.
Rebuttal - The internet and other resources provide a much broader source of Expert advice. How many times have you known more about an auto than the sales person? A Dealer is mostly interested in what suits your needs that is on their lot.

2. One-stop shop
Typically, dealers have a variety of vehicles to choose from, new and used, at a wide range of prices.
Rebuttal - How many "one-stop shops" does one have to visit to get the best price? How much pressure and sales tactics will the customer be exposed to during their visits? If a consumer has done their research and decided to buy a Tesla, their is only one stop, which could be bought from the comfort of their home.

Most dealers also have experts on staff to assist with financing, vehicle protection plans and accessory options.
Rebuttal - Tesla offers all of the above in many cases without having to go to a location. http://www.teslamotors.com/

3. Code of ethics
Dealerships adhere to a strict code of ethics and many are members of organizations such as the National Automobile Dealers Association.
Rebuttal - Here is a link to the NADA code of ethics - http://www.nada.org/Publications/CodeOfEthics/. Appears to be standard business ethos that any reputable auto company would employ. To be fair, I could not find a published code of ethics for Tesla, but can find multiple accounts of Tesla's customer service.

4. Greater convenience
Dealers offer a wide selection of vehicles,, financing options, fully-equipped service departments and expert advice - all in one place.
Rebuttal - Repeat of # 2 for the most part, except added Service departments. There is a reason dealerships combine Sales and Service; to provide more opportunity to sell you a new car and the service that comes with it.

Tesla has their service centers as well, but does not always locate them with their Stores. Additionally, Tesla offers valet service where they will pickup your EV and leave you with a loaner. Now that's convenience!

5. After-sales service
Nearly every dealership has a staff of certified car service professionals to help you maintain your vehicle and repair any damage that may occur. .
Rebuttal - So does Tesla. http://www.teslamotors.com/findus/service

Plus, many dealers offer service discounts and specials to customers that have purchased their cars from them
Rebuttal - Why? Does it cost more to service a car bought from another dealer? Because dealerships profit from service and can reduce their return if you're willing to buy a new car from them. Elon Musk has made it a principle with Tesla to not make a profit on service. See the 7th paragraph in this post from Elon. http://www.teslamotors.com/blog/people-new-jersey

6. Vehicle trade-ins
Almost every dealer will take your trade-in vehicle, no matter what its current value is. Even if you still owe money on your car, the dealer can make the finance process price and simple - without an expensive "bridge" loan. And contrary to popular belief, dealers will pant top market value for vehicles in good condition.
Rebuttal - Tesla works with established used car networks; Autonation and CarMax.

7. Vehicle warranty
The majority of dealerships attach warranties on all cars less than 10 years old and less than 100,000 miles. Many dealers also offer extended warranties for up to five years.
Rebuttal - Tesla offers a comprehensive warranty which is competitive with the industry. http://www.teslamotors.com/sites/de...ts/model_s_quick_guide_-_na_rev_d_for_web.pdf
Depending on your state, Tesla also offers extended warranties.
http://www.teslamotors.com/service#/service-plans

8. Guaranteed title
When you purchase a vehicle from a licensed dealer, you're guaranteed the title to that vehicle. Any money the previous owner still owes on the vehicle is covered by the dealer -- not you.
Rebuttal - Tesla does the same.

9. Used vehicle inspections
Dealers subject used vehicles to strenuous inspections before selling them to the public to ensure the highest quality control for every car on their lot. The last thing a dealer wants is the reputation for selling "lemons".
Rebuttal - Tesla's Pre-owned fleet currently consists of Roadster's that also come with the same strenuous inspection.

10. Community involvement
Many dealerships have been active in their communities for years and have sponsored local businesses, hospitals, athletics and more.
Rebuttal - Commendable and appreciated. Tesla Stores and Service Centers are staffed with talent from their communities who are undoubtedly involved in their communities.

DON'T LEAVE YOUR NEXT VEHICLE PURCHASE TO CHANCE.
Rebuttal - Do you're own research, question, and find what is right for you. Do not rely on one dealer or source of information including this presentation.
VISIT YOUR LOCAL DEALER TODAY
Rebuttal - Based on your research, buy where you find the best value.

 

[yobigd20]

right! and soooo I'd love to hear them explain their code of ethics and convenience when this dealer refunded this woman IN PENNIES: Dealerships are awesome and protect their customers... Not!

 

[AnOutsider]

For buying a used car, I actually agree that going to a dealer has some advantages over buying from a private party.

Yeah, as I was reading it, I was like "Yeah, good reason to go to a dealer for a car instead of an individual". Doesn't really change anything about buying from Tesla though.

 

[ItsNotAboutTheMoney]

If not independent franchised dealers then how about Tesla owned and operated "dealers" that are equipped to do more than the current arrangement? Like, handling trades, inspections of used Teslas (I did read on this forum that someone tried to get Tesla to inspect a used MS and they wouldn't do it).

Sad thing is that if laws didn't entrench the independence of dealers you would likely end up with large independent sales and service companies with FM agreements. But the current position instead means that it is against Tesla's interest to use independent dealers.

 

[Red Sage]

If not independent franchised dealers then how about Tesla owned and operated "dealers" that are equipped to do more than the current arrangement?

I think it's been reported that one or two locations in Tennessee may be of that sort. I think it was described as an older, abandoned Lexus or Acura dealership location that was acquired by Tesla Motors. So for that site, both the Service Center and the Tesla Store will be at the same location. I imagine such a location having an open, empty parking lot, except for a handful of demonstrators & loaners, and those who have come in for service. There would also be a bank of HPWCs or Supercharges available for travelers. New cars on the site would be there awaiting Customers who have already completed a purchase. Never a lot full to the brim with existing inventory for purchase.

Like, handling trades, inspections of used Teslas (I did read on this forum that someone tried to get Tesla to inspect a used MS and they wouldn't do it).

I think that what Tesla Motors really wants to avoid at all costs is being seen as yet another of the traditional dealership lots that have 'acres and acres of cars' for sale with 'we carry our own contracts' banners, those stupid pennant streamers, red & white balloons, and a gigantic inflated gorilla on the roof. I don't think they want to have a lot full of used cars from Lexus, Infiniti, Acura, BMW, Mercedes-Benz, AUDI, or anyone else piled up on their lots. They don't want to be responsible for inspection, maintenance, or sales of ICE vehicles at all.

I say this because I think things really started going downhill for Honda when they started mentioning competitors cars in their advertisements. For a long time their ads promoted their cars as if they were the only vehicles in the world. I think that Tesla's marketing should always focus on educating people about their own products, as if they are the only logical choice anyone should make.

Too many car dealerships put far too many used cars on display from competing marques. Yes, Tesla could certainly make the transition a bit smoother, but I agree they should not handle used car transactions for other marques anytime it can be avoided. If someone is trading in an older Tesla product, they can work with that just fine. That way it can really be a Tesla Certified Preowned Vehicle if they offer it for sale. Avoiding trade-ins also allows Tesla to sidestep another issue with traditional 'independent franchised dealerships' because they are always perceived as a rip-off, no matter how 'easy' they may be.

 

[James Anders]

I wasn't thinking about a Tesla "Dealer" selling non-Tesla used cars - but used Teslas. If someone wanted to trade in their non-Tesla car then this Tesla "Dealer" could assist the customer. At the very least, these non-Tesla used cars could be sent to auction or to the appropriate dealer, etc. Many people just like the convenience of having things taken care of for them. And if the Tesla customer would get a bit less from their trade-in compared to their native car dealer, I don't think this would be a problem. It would also be nice to have this Tesla dealer be able to handle typical things like financing, tags, etc.

And none of this would have to compromise the Tesla experience and independence.

There will be a lot of used Roadsters and Model S cars available on the used car market when the Model X ships. As someone who would consider buying a used MS, I would certainly value being able to go to a Tesla dealer and know that the vehicle was inspected and updated, etc. And when the Gen /// comes out it will be even more important.

 

[CHGolferJim]

Couldn't some of the Tesla Service Centers morph into corporate-owned "dealers" rather easily for the purposes of streamlining Tesla owners moving into their new offerings? Might also be somewhat effective in supporting market prices of used vehicles which would support sales of new vehicles (lower depreciation risk).

 

[Red Sage]

I wasn't thinking about a Tesla "Dealer" selling non-Tesla used cars - but used Teslas. If someone wanted to trade in their non-Tesla car then this Tesla "Dealer" could assist the customer. At the very least, these non-Tesla used cars could be sent to auction or to the appropriate dealer, etc.

I think that is the role taken by used car 'brokers' such as AutoNation, AutoTrader and CarMax.

Many people just like the convenience of having things taken care of for them. And if the Tesla customer would get a bit less from their trade-in compared to their native car dealer, I don't think this would be a problem. It would also be nice to have this Tesla dealer be able to handle typical things like financing, tags, etc.

I have no objection to these options, if certain potential pratfalls can be avoided.

And none of this would have to compromise the Tesla experience and independence.

Therein lies the rub.

There will be a lot of used Roadsters and Model S cars available on the used car market when the Model X ships. As someone who would consider buying a used MS, I would certainly value being able to go to a Tesla dealer and know that the vehicle was inspected and updated, etc. And when the Gen /// comes out it will be even more important.

If, as I suspect, a higher capacity battery pack is available for the Tesla Model S 1.0 in 2016, used versions will be very, very rare. I believe that with the announcement of what I expect will be an 85 kWH battery pack for the Tesla Roadster, people who have them now and get the upgrade will never let them go.

Couldn't some of the Tesla Service Centers morph into corporate-owned "dealers" rather easily for the purposes of streamlining Tesla owners moving into their new offerings?

I think that would be done primarily at locations that are shared by the Tesla Store and Service Center.

Might also be somewhat effective in supporting market prices of used vehicles which would support sales of new vehicles (lower depreciation risk).

I've been certain from the outset that Tesla Motors efforts toward warranty repairs and annual service has always been geared toward maintaining both resale and tradein value. If competitors routinely lose 30-60% of value within five years... Tesla products will look like superstars if they only decline by 20-40% instead, over six-to-eight years. Not so good for people who are waiting to pick up used cars, great for people who intend to keep them for a while.

 

[Olle]

This is funny. Are you sure this wasn't in the Comics section of LA Times?
3. Code of Ethics and
6. Vehicle trade ins are my favorites. "contrary to popular belief dealers pay top market price for trade ins" ) Sounds like a pretty bad business model to pay top for trade ins. What do you then sell them for? Top top+?

 

[Doug_G]

This is funny. Are you sure this wasn't in the Comics section of LA Times?
3. Code of Ethics and
6. Vehicle trade ins are my favorites. "contrary to popular belief dealers pay top market price for trade ins" ) Sounds like a pretty bad business model to pay top for trade ins. What do you then sell them for? Top top+?

LOL those are both hilarious. Saw some incredibly sleazy behavior when I tagged along with a friend who bought a new car last year. He was dealing with a total slime-bag. The lies were so brazen it was hilarious.

As for "top dollar", I've always been able to get significantly more by selling cars privately.

 

[tdelta1000]

The NADA is running scared.

 

[mknox]

As for "top dollar", I've always been able to get significantly more by selling cars privately.

Agreed, but to be fair, I got significantly "low-balled" by Tesla when I traded my last car in on the Model S. They gave me a quote sight unseen which turned out to be the very bottom of the "Blue Book" range for my make/model. I am fastidious when it comes to my cars and dealers in the past have always recognized that when it came to determining my trade-in value.

 

[Olle]

Agreed, but to be fair, I got significantly "low-balled" by Tesla when I traded my last car in on the Model S. They gave me a quote sight unseen which turned out to be the very bottom of the "Blue Book" range for my make/model. I am fastidious when it comes to my cars and dealers in the past have always recognized that when it came to determining my trade-in value.

What do you mean by "Tesla traded my last car in"? One of their assigned dealers? I don't think you should be surprised by the low-balling. That is obviously what any dealer has to do to make money on the trade.
I sold my two last ICE cars privately and found it a lot easier than going to a dealer. I drove by dealers with both cars partly for fun and partly to survey what I could get. As expected, the lying and cheating was so blatant that it could have been taken straight out of a comic book.

The Volvo dealer offered me 60% of KBB dealer out price for my S80. Once confronted with the KBB numbers he told me "nobody uses Kelly Blue Book any More". I put it up for sale privately and sold it right in between KBB private and dealer out value. It was in extremely good condition though.

Stopped by with my Audi A6 at a Subaru dealer. Sales man called manager out to appraise car. He offered me 50% of the KBB dealer out price with the motivation that the car was soon in need of major service and engine renovation. I asked the manager if he could elaborate on the need for renovation. He went into the car, pretended to press some buttons on the dash and said "your car's LCD screen states major brake overhaul and engine repair needed" When I tried to look at the screen over his shoulder he desperately moved his obese body into my line of sight so that I couldn't see anything. The whole show was true SNL material. After all of 10 minutes I left the dealership, nauseous.

I happen to know a thing or two about cars and have VAG-com on my computer at home so I can check, diagnose and program VW and Audi cars. This particular Audi was in good condition and had no error codes.

I sold it privately right on the KBB private party value.

 

[GoBlue88]

The NADA is running scared.

I love the smell of desperation in the morning. Smells like....victory.