The new fantasy sales framework will fail

[PhatCat]

Yep, this whole thing about doing business on a computer is just stupid and doomed to fail.

I remember when Citibank introduced the first ATMs and everyone said, no one will ever trust a computer to receive and disburse money; they will only trust a human teller to do that. Sure enough, ATMs failed and were never seen again. BTW, does anyone under 30 even know what a bank teller is? Do they tell stories to kids whose parents are waiting in line?

I remember when the commuter railroads talked about buying tickets from machines and everyone said the people will never trust a machine and would much prefer to stand in line for an hour at the beginning of each month in one the 30+ lines at the ticket windows at Grand Central Station. Sure enough those ticket machines failed. BTW, can you find the one ticket window that is still open at GCT.

I remember when online travel services first appeared and everyone said no one will want to go through the hassle of booking their own flights when they can just call their travel agent. Sure enough, online ticketing disappeared. BTW, does anyone know a good travel agent? Or *any* travel agent?

I remember when this startup company started selling books over the internet and everyone said there is no way people will buy books sight unseen. They will never give up actually handling the book. And they will never, ever read books on a computer. And sure enough that online book company Amazon faded into the Seattle clouds, never to be seen. BTW, where's the nearest bookstore?

I remember when online music services started and people said there is no way anyone will give up owning their own copy of the music. And sure enough those music streaming services failed. BTW, where can I play my CD? There doesn't seem to be a slot on any of my devices.

I remember when a new startup car company started selling cars online. How ridiculous! Over 400,000 people would never place a $1000 deposit on a car that didn't even exist yet, without even seeing it in person, let alone without driving it. And there is no way that car company would receive 80% of its orders online. And there is no way a person like me, who has had 28 cars of every type and configurations form various manufacturers, would purchase a Model 3 without ever seeing it in person, let alone driving it.

Oh wait. I did.

 

[pedriscoll]

I bought both of my Model S Tesla’s online. It was nice to be able to see the car at a Tesla store, but as long as service centers can arrange test drives, I think the online ordering will work just fine.

 

[krsgio]

I don't see a problem with the online ordering. The Tesla stores are just for window shoppers, people who aren't really interested in buying the car and a place for parents to go let their kids f around in a $100k for awhile to kill some time while their wife tries on some clothes.

 

[Dpc131]

It may be me, but every car I’ve bought I normally feel that I know more about it than the salesman. I’ve usually already down selected, know what options and what is good and bad about the car.

 

[TechOps]

I went to a showroom the other day and while they had cars it was mostly empty. Most people order online anyway.

The online only sales model will work. It will have some growing pains but it will work.

My concern is used cars. How are they going to sell used cars without a store/dealership?

Tesla doesn't sell used cars to consumers. They put them all in wholesale auctions (through Manheim, a nationwide auction house). So this is just a matter of handling reverse logistics to get used cars from the Tesla buyer to the closest Manheim lot. Should be easily accomplished alongside their forward logistics of getting Teslas to buyers.

 

[jerry33]

Where I live the only way to purchase a Tesla is online. Hasn't hurt Tesla sales any around here.

 

[OrbiterTI4]

I purchased our S and X on a computer at a Tesla store...did those orders count as online?

 

[NoirMS]

purchased S online... (CPO)

 

[BridgeMojo]

I bought my S online Dec. 18, and the drive home was my first drive. It was a "new" inventory car with 500 miles.

It has this one issue with the front right ultrasonic sensor knocked out of position, pointing a bit low. As a result the proximity alarm gives out many false chimes. It happened the first time at the traffic intersection just outside the Buena Park service center / showroom.

Of course I had no idea if that was normal or not. I wasn't able to get it into a service center until Feb. 1, and haven't heard back from them since. The service guy suspects it had a hard drop onto something like a parking barrier, and I have no proof that it was delivered that way.

That said, I indeed bought a car online, and took it home without a test drive. I have no regrets, and love the car. (But could you fix my bum sensor please?)

Mojo

 

[Snowstorm]

As another data point, I bought my S100D back in 2017 without a test drive (drove a friend’s for 15 minute) and am loving it. My dad and sister bought their model 3 without a test drive (they did drive my model S for a few minutes)

As long as Tesla keep making great cars, they will be fine. Each happy customer is a good salesman.

 

[StealthP3D]

I agree that Tesla must have reviewed the data. However the data is heavily skewed.

I'm sure Musk and team have trouble interpreting data that is skewed. I understand they are easily fooled by such inconsistencies in the data. Your insights might be very valuable to Musk and team. Have you ever considered joining so you could help them out?

We just love Tesla or Elon so much that we just took it as faith that the car will be good. Fortunately it is good.

Yes, Musk and team should thank their lucky stars the Model 3 turned out so good. That's the definition of good luck. It could have been a disaster if the first one came off the production line and it was no good. Not everyone can be so lucky.

But other than Tesla, I still go to dealerships to test them out and compare them in order to choose the right car. Also I generally have positive experience at dealerships.

It looks like you are lucky too. Most people hate dealerships. This is confirmed in public opinion surveys.

The fact is, the general public does not know much about Tesla (they actually get lots of misinformation) and its cars and will need to be able to test the cars, and be informed of its features by a live person (most people have no interest in reading or watching lots of videos about a car), as they shop and compare with other choices. If they can't do that, they won't buy.

Golly, you had better get on Musk's team, and quick, so you can stop the disaster that is unfolding. Because if no one buys their cars, they won't be around much longer. Please, offer up your superior analytic skills so you can save Tesla from financial ruin! Musk and team really needs you, and quick!

 

[Tic-tac-toe]

For people who know Tesla already and wants their car, they would drive to far away or hard to find location in some industrial park to do test drive or see the car.
But the problem is that Tesla is still relatively an unknown brand unless you are really into tech, car or finance. Believe it or not, vast majority of the general public has NEVER heard of Tesla, if you don't put a Tesla store in a busy shopping mall, how is Tesla going to expand their customer base and sell more cars? Tesla expect these people that don't know Tesla all of a sudden show up in an industrial park to see the car?

The under 30 crowd all know about Tesla. There are a lot of hip hop and rap songs about Tesla cars in their lyrics. A lot of high school kids would love a model 3 - they all know because pop culture for them is molded via the internet. Young people are use to buying stuff online.

In fact, all the super hyped shoes/sneakers (Yeezy’s), clothes (Supreme, Bape, etc) are mainly available online (via an app. Get it before it sells out!) and not at the mall at a brick and mortar unless the store is a reseller. This is why retailers like the GAP are on a steep decline. They don’t mind not trying stuff on before buying either especially with a robust return policy... and these brands are not cheap.

 

[ggnykk]

The under 30 crowd all know about Tesla. There are a lot of hip hop and rap songs about Tesla cars in their lyrics. A lot of high school kids would love a model 3 - they all know because pop culture for them is molded via the internet. Young people are use to buying stuff online.

In fact, all the super hyped shoes/sneakers (Yeezy’s), clothes (Supreme, Bape, etc) are mainly available online (via an app. Get it before it sells out!) and not at the mall at a brick and mortar unless the store is a reseller. This is why retailers like the GAP are on a steep decline. They don’t mind not trying stuff on before buying either especially with a robust return policy... and these brands are not cheap.

Good perspective. But you may just pointed out the biggest issue Tesla faces, people who are well aware of Tesla brand are under age of 30, but they are also the group that tend to have less financial resources to buy an EV (which price above gasoline car on average).
In the same token, people who are over 30 years old are usually much less aware of Tesla, but they are the one that can more easily afford to buy it.

Maybe Tesla needs to put their official Facebook page back up, it is a totally free marketing platform for Tesla. I found it absolutely absurd that Elon decided to take it down two years ago just because Facebook has some short-term problems with privacy.

 

[Zorg]

Bought my CPO S online and bought the 3 without ever driving one. Plus, they can now skip the whole dealership franchise BS.

 

[PhilDavid]

Bought my CPO S online and bought the 3 without ever driving one. Plus, they can now skip the whole dealership franchise BS.

Anyone buying a CPO NOW would be served much better by a car dealer. You must have bought your CPO car before they made it horrible. These are the highlights of the current CPO program:

• No test drive or personal inspection prior to payment.
  
• No refurbishing
• Hardly any standards. They actually sell cars with dents and holes in body panels and bumpers.
• Unknown delivery time frame
• Photos are not listed with the car listing.The photos they do send are horribly low quality.resolution photos.
  
• No prior service/repair history.
• No idea if the car has rattles or squeaks until you actually buy the car and those rattles and creaks are now conveniently excluded from the CPO warranty.
• This list is just off the top of my head and there are many more items to list and in each one of the above listed attributes, a car dealer would treat a customer better.

yeah, some of this online stuff is a bit overrated.

 

[PWlakewood]

.....overrated? Yet they sold how many model 3 online? Funny how this whole internet thing doesnt seem to work.

 

[IchDochNicht]

In the mid to late 90ies, I worked for a VP of Marketing who told me daily that the Internet was just a fad that would go away quickly...

 

[whitex]

Bought 4 Teslas techincally online (one filled out the application online in the store), but all of them had an OA which had to aid the process. From trade-in details, appraisal, etc to financing details, or even updates when the car will be ready - none of which I was able to get online. One of the times by DS didn't show up to appraise my trade-in, OA did it. Then the same DS didn't show up for delivery either. Without an OA handholding the process, this only works if you're buying the car in cash, have no trade-in, and don't really care when it shows up.

As for Elon's "you can buy a car in 1 minute on the phone, drive it for 7 days and return it", it is total and complete BS as it only also applies to someone who has cash to buy it and no trade-in. Most people will have a trade-in and need a loan. 7 days in, how exactly does this returning of the car look like? Does Tesla hold onto your trade for 7 days and give it back to you? Do they not actually fund the car with a loan until 7 days later? I highly doubt it. Elon is completely disconnected from reality on this one (not all Tesla customers are billionaires like him) - I guess no different than "everyone gets a P100D loaner during service".

This decision reminds me so much of Elon's "let's just use parking sensors instead of radar based body side monitoring" - a complete brain fart, disconnected from reality, and a complete failure. Elon's going to have another "Who knew parking senors don't work well at highways speeds?" moment, this time about selling cars exclusively online.

 

[electracity]

The model may work with a Tesla lease. Returning the car within seven days could be fairly painless if the transaction was all internal to Tesla.

But its a mess with a bank loan. It's scary with a cash purchase for most people.

Elon doesn't like to rely on messy world of human beings to run his companies. That's why there was Alien Dreadnought and now direct to consumer. This trait is probably the limiting factor for Tesla as an independent company.

 

[whitex]

The model may work with a Tesla lease. Returning the car within seven days could be fairly painless if the transaction was all internal to Tesla.

Leases have trade-ins and down payments too. Sure, they could set it up so that your trade-in sits for 7 days at Tesla, but that complicates things quiet a bit - unlikely Elon wants to sit on trade-ins for 7 days.