Tesla Dealership Idea

[Longhorn92]

First off: I know nothing of the legal aspects (which I expect would be huge) nor of the requirements for owning a car dealership, so this is very far-fetched, and I also expect this is not Tesla’s preference, but…

I am sure that, for every Tesla store or gallery (current and future), there is a Roadster or Model S owner who would be happy to buy from Tesla each store/gallery and become the owner of an official Tesla dealership. The contract with the manufacturer could be something like this:
1. I will buy the store/gallery for the price of $1.
2. I will give Tesla full control of operations and management of my dealership.
3. Since dealerships are profit-making ventures (and I surely don’t want this to look like a artifice), we can negotiate the business terms such that I will hopefully make a 14% return on my $1 equity investment over the term of the contract.

Again, I know this is much easier said than done, and the legal, liability, tax consequences, etc are probably a nightmare, but at least it would allow Tesla to continue their mission and control the customer education.

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Plus, how much fun would it be to walk into a Tesla store and say “I own this place.”

 

[brandonmbeard]

Its the control of the Sales chain that Tesla does not want to let go of.

 

[Longhorn92]

Its the control of the Sales chain that Tesla does not want to let go of.

This is what they said on their blog post regarding NJ yesterday:

We strongly believe it is vital to introduce our own vehicles to the market because electric cars are still a relatively new technology. This model is not just a matter of selling more cars and providing optimum consumer choice for Americans, but it is also about educating consumers about the benefits of going electric, which is central to our mission to accelerate the shift to sustainable transportation, a new paradigm in automotive technology.

In any case, they can still be fully in charge of the sales chain.

 

[SteveG3]

First off: I know nothing of the legal aspects (which I expect would be huge) nor of the requirements for owning a car dealership, so this is very far-fetched, and I also expect this is not Tesla’s preference, but…

I am sure that, for every Tesla store or gallery (current and future), there is a Roadster or Model S owner who would be happy to buy from Tesla each store/gallery and become the owner of an official Tesla dealership. The contract with the manufacturer could be something like this:
1. I will buy the store/gallery for the price of $1.
2. I will give Tesla full control of operations and management of my dealership.
3. Since dealerships are profit-making ventures (and I surely don’t want this to look like a artifice), we can negotiate the business terms such that I will hopefully make a 14% return on my $1 equity investment over the term of the contract.

Again, I know this is much easier said than done, and the legal, liability, tax consequences, etc are probably a nightmare, but at least it would allow Tesla to continue their mission and control the customer education.

- - - Updated - - -

Plus, how much fun would it be to walk into a Tesla store and say “I own this place.”

I like the idea Longhorn, even if, like yourself, I have no idea if it could be done.

 

[yobigd20]

This wouldn't work because the new rules prohibit automakers from selling directly to consumers as it requires them to go through franchised, third-party dealerships. So all retails shops that sell cars in NJ (retail stores, aka dealerships) must have a franchise agreement with the automaker. Thus you'd have to enter a franchise agreement with Tesla. And that's never going to happen. Ever. We need to do away with this ancient franchise law system, not accept it and encourage it further. Tesla will never buy into this system. Neither should we.

 

[Al Sherman]

^^^Agree. The franchised (3rd party) dealership thing is why buying a new car has always been a living hell for me. I've never had even a remotely pleasant experience with it. Dealing with Tesla has simply been a joy from start to finish.

 

[eepic]

First off: I know nothing of the legal aspects (which I expect would be huge) nor of the requirements for owning a car dealership, so this is very far-fetched, and I also expect this is not Tesla’s preference, but…

I am sure that, for every Tesla store or gallery (current and future), there is a Roadster or Model S owner who would be happy to buy from Tesla each store/gallery and become the owner of an official Tesla dealership. The contract with the manufacturer could be something like this:
1. I will buy the store/gallery for the price of $1.
2. I will give Tesla full control of operations and management of my dealership.
3. Since dealerships are profit-making ventures (and I surely don’t want this to look like a artifice), we can negotiate the business terms such that I will hopefully make a 14% return on my $1 equity investment over the term of the contract.

Again, I know this is much easier said than done, and the legal, liability, tax consequences, etc are probably a nightmare, but at least it would allow Tesla to continue their mission and control the customer education.

- - - Updated - - -

Plus, how much fun would it be to walk into a Tesla store and say “I own this place.”

#2 would make it legally sketchy whether or not it's an arms-length 3rd party dealership. A much cleaner way is to set up a non-profit organization to "raise awareness" about the best EV choices out there. Said non-profit organization could operate a fully independent 3rd party non-profit "dealership" to educate consumers on how to purchase some of these EVs. The non-profit model means that employees can still get paid a wage, while keeping the dealership from adding to the end cost. Heck, you could probably crowdfund this idea.

 

[Ludus]

States typically have regulations that require franchised dealerships to have specific service facilities and other things that aren't part of Tesla's model...so a Tesla store in a mall wouldn't qualify as a location for a dealership franchise. Part of what Tesla is fighting is that the rules impose a very specific way of doing business. They don't want to have on hand inventory sitting there, they don't want service profits to pay for it, they don't want the lot and service requirements to mean that the showroom can't be in a high foot traffic location like a downtown or a mall...because they want people to just walk in and ask questions.