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It's an overall benefit for consumers because manufacturers that allow haggling presumably factor it in into their sticker prices because it's such a common pra

It's an overall benefit for consumers because manufacturers that allow haggling presumably factor it in into their sticker prices because it's such a common practice. The best hagglers are perhaps worse off with the Tesla model, at least if their time spent haggling is not valuable to them, but everyone else tends to benefit.

foepys 6y ago
That's a nice assumption but I don't believe this to be true. Before the pandemic hit, VW (the make, not Porsche or Bugatti) made only a few hundred Euro profit per vehicle, with some lower class models even less than 100€. Tesla just saved themselves from building a sales network.
- bryanlarsen 6y ago
  They made a few hundred up front, then a few thousand on the adjustment and thousands on maintenance and warranty work.
mcot2 6y ago
It’s a bit more complex then that. Tesla is acting both as the dealer and manufacturer via a direct sales model. Technically in a strict dealer model the manufacturer only sets some pricing guidelines like minimum advertised pricing and suggested retail price and they are not involved with haggling. They may also offer pass through incentives to get inventory to move. The direct sales model works when the product is in demand and you are willing to build the infrastructure for interacting with customers. The original idea of the dealership model was that car manufacturers could make cars and dealers could sell, service and do the local marketing and brand awareness. A robust nationwide network of independent dealers was developed such that each dealer would know their market best and be able to market and serve those customers better than one large entity. Somewhere along the way this went sideways and car manufacturers were actually restricted from direct sales in most states since technically they would be competing against the independent dealers they also supplied. Not many other industries have really evolved this way.

foepys 6y ago

That's a nice assumption but I don't believe this to be true. Before the pandemic hit, VW (the make, not Porsche or Bugatti) made only a few hundred Euro profit per vehicle, with some lower class models even less than 100€. Tesla just saved themselves from building a sales network.

bryanlarsen 6y ago
They made a few hundred up front, then a few thousand on the adjustment and thousands on maintenance and warranty work.

mcot2 6y ago

It’s a bit more complex then that. Tesla is acting both as the dealer and manufacturer via a direct sales model. Technically in a strict dealer model the manufacturer only sets some pricing guidelines like minimum advertised pricing and suggested retail price and they are not involved with haggling. They may also offer pass through incentives to get inventory to move. The direct sales model works when the product is in demand and you are willing to build the infrastructure for interacting with customers. The original idea of the dealership model was that car manufacturers could make cars and dealers could sell, service and do the local marketing and brand awareness. A robust nationwide network of independent dealers was developed such that each dealer would know their market best and be able to market and serve those customers better than one large entity. Somewhere along the way this went sideways and car manufacturers were actually restricted from direct sales in most states since technically they would be competing against the independent dealers they also supplied. Not many other industries have really evolved this way.