So the point is, don't just go to the hearing and rant about how great Tesla's are. Try to focus on giving testimony that the public interest requires a Tesla owned sales/service location and that inserting a dealer in the process will benefit no one except the dealer and will harm the Virginia customers.
Thank you! +5000 on this. I have watched other hearings in other states and while it is awesome that owners are willing to speak on the issues, we have to make sure that we are speaking directly to the matter at hand.
What I had written to the Secretary of Transportation when I had sent them a message was largely following this idea that it was based on public interest.
"
in a manner consistent with the public interest". I think the issue and what is even up for debate is the interpretation of this by the person presiding over the hearing, since "public interest" can mean many different things to many different people.
The two main areas is going to be sales and service (since this is what a dealership functions for):
Sales:
1: Dealerships are incentivized to mark up the pricing. The only time a dealership cuts to a cost that is "at cost" to them, is when they either
A: Get kickbacks from the manufacturer. E.g. Manufacturer rebate. Therefore the dealer continues to make the same profit they would have otherwise on the markup.
B: Get kickbacks from the manufacturer to sell product X in order to be able to get larger inventory of product Y. They will happily lose, for example 1,000$ on product X if they are able to make an extra 2,000$ on product Y.
C: Need to just dump inventory because a product isn't selling and they don't want them on the lot anymore. This means typically that a car is selling bad and would be dumped by the manufacturer anyway. This product would die off and be dumped whether or not owned by a franchise or a manufacturer. If there is excess inventory they are going to cut prices to get rid of it happily eating the loss to just be rid of the product.
Because of the above, nothing is gained by adding a dealer except higher prices to the consumer, or being highly inconvenienced. Tesla isn't going to sell the car any cheaper to a dealer than they are to a customer direct, therefore there is no money to be made from new car sales (or little money) as the customer will drive to the next state over and take delivery anyway. The state still gets its taxes either way, only now the customer is horribly inconvenienced through time or higher prices. How is that in the best interest of the public?
2: Dealerships are incentivized to sell you "add-ons" that you don't need or want through various bullying tactics. It has been shown that you are statistically better off not buying an extended warranty for the average car as you are more likely than not to end up paying out for something that you don't need. Other things like financing games and "undercarrage anti-rust spray" confuse the consumer and in some cases void your manufacturer warranty (in the case of the undercarriage spray, you void the warranty on your paint).
3: Dealership salespeople are typically paid out on commission. This means they are incentivized by volume over customer care. As EV's are still relatively new tech to many consumers, they come in with many many questions. In places where dealers have sold both ICE and EV, it has been shown that dealers will try to push people toward ICE over EV rather than spend time explaining them to the customer. Even if Tesla were the only car at the location, if the salesperson is incentivized on volume what determines the level of care and attention to these questions that someone has? They are going to push the sale over anything else, and push options that you likely don't need or want just to make a quick buck. There is a workaround here and that is that a dealer could operate under the Saturn business model where salespeople were paid as salary. We all know how well Saturn turned out. And that was selling products people were familiar with!
Service:
1: Dealerships typically make the most profits on service. As such, you are looking for cars that break down, and cars that need constant care. Outside of faulty/bad materials from the Manufacturer, the only regular maintenance items are:
- Tire rotation every 6k miles
- Wiper blades
- FOB batteries
- Air Filter
- Washer fluid, coolant fluid, brake fluid
- Recharge the AC
- Lubricate hatches and roof track
I think there might be a couple other things, but that's pretty much the annual service in a nutshell, which Tesla charges 600$ for. I think you can also get an alignment included if it needs it and it is during the annual service? Same with brake pads... but those are likely to never wear out. People have checked their brakes after like 50k miles and saw no measurable wear on the pads.
2: Dealership service (like Jiffy Lube and other independant shops) try to upsale you on things you don't need or don't want... In most cases this wouldn't apply to the Tesla since these things just don't exist (fuel and oil additives for example), in any case, this leans toward point one, but get's it's own point because they are forcing things on to you that A: Tesla isn't trying to force on to you. B: are things that you simply don't need. If it is in the public interest to try and upsale you on pointless things... then by all means!
3: Recall fiascos. We all know how the GM ignition switch turned out. Dealers hiding and conspiring with the manufacturer to hide things. But on the other side of this, you have a unified network all reporting their information back to Tesla. Sure a dealer is obligated to report certain things, but if they come up with a better way to fix an issue that gives them a competitive advantage they are under no obligation to share that. And in many cases, still charge the manufacturer the same high cost which is going to translate in the manufacturer trying to pass those higher expenses back around to make up for it. Tesla owning all their service centers provides a central organized service where issues can be better covered and known about that independent shops simply do not and can not provide.
The rest of the way that Tesla is doing service, a dealer could choose to do, (loaners are becoming a more prevalent thing as one example)... I think the question is, why aren't they, and would whoever takes over as Tesla's service shop provide that same level of care? Ask the dealers present what their average service time is for non-standard maintenance. If this number is not currently "less than 1 day" then I would argue that customers would be getting a lower quality of care based on time to repair.
Anyway, these are the key arguments I can see lining up against Tesla vs Dealer... If I missed something feel free to add!