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At first I thought this was a brilliant idea. Fight the stupid laws of the past; I'm on board. However, as a casual follower, I haven't been convinced the prob

At first I thought this was a brilliant idea. Fight the stupid laws of the past; I'm on board. However, as a casual follower, I haven't been convinced the problem is that big. Does a franchisee add a large markup? More that Tesla would already assume by opening their own stores? Maybe they want to control the customer experience? Personally, I'd be happy to be a franchisee and only charge $100 per car sold. Because I believe these cars sell themselves. No negotiations, everyone pays MSRP seems to be the Tesla model and, I like that. I won't need a hoard of sales staff. Tesla can dictate/measure my customer service practices. I won't carry a big inventory, I'd probably do setups similar to the Tesla shop in the Houston Galleria. Only a few models so people can see and feel the car, do test drives, then the order is placed with the factory. This is the part that is broken with the car industry. Dealers pre-order inventory then try to sell you the stuff they have on the lot. They all have "build your car" tools on the website, but consumers rarely get the opportunity to buy exactly the car they want. I might not know the full scope of what is required of an auto franchisee. The costs and what-not. But, if Tesla where to give me a market and the rules which to operate. I'd gladly partner with them and provide a high level service at a negligible middle-man fee. I think many other people would too. So why does this need so much disrupting? I'm starting to think, because there is an opportunity to disrupt is the right answer. This topic is generating a lot of buzz. Politicians are talking about it. Just look at the headline of this post, seriously... Tesla is pushing this to be a presidential candidate talking point? That type of PR would be priceless.

runamok 13y ago
How do you propose to pay your employees, rent, etc. with $100 per car sold? Granted you are reducing some costs due to not having inventory besides your test/display models. IIRC most dealerships make the bulk of their income on service which Musk has described as a non-starter.
- conductr 13y ago
  I'm assuming I could run the sales more efficiently, less employees, under the stated model. $100 might not be the right number, just a point that it would be negligible. Also I'm also assuming tesla would give me a large market/city/region. I don't see the need of having so many locations like ford, gm, others currently have.
plainketchup 13y ago
The problem (from Tesla's perspective) with giving you a franchise is that the current franchise laws make it effectively impossible to take back that franchise, short of going to bankruptcy court. There are some truly awful dealerships out there, but Chevrolet had a hard time closing bad ones, even with the help of a bankruptcy court. Maybe you'd do an better job than Tesla of holding the customers' hand through the process of their first electric car purchase, but maybe in five years you'll decide there's more profit in high-pressure sales techniques. The cows have already left the barn at that point and there is nothing Tesla can do to stop you (so your promise to only take a $100 commission on each sale is worthless). You seem skeptical that dealerships are adding a large markup. Maybe that's true, but then why are the dealer's so adamant that Tesla only be allowed to sell cars through franchise operations? The dealers have nothing to worry about if you're right. It's not as if Tesla is taking away a current franchise. They're simply not franchising in the first place.
- conductr 13y ago
  You make good point on longevity of the relationship. I figured tesla could solve this with the right contracts when they did setup a dealer. That might not be the case. I not skeptical and believe dealers do add costs. Significant probably. I don't have the data to know to what degree. I'm just suggesting tesla scrap the current dealers and build their own network with its own set of rules and economics. There may be valid reasons that is a bad idea, but i would be glad to be a part of it

runamok 13y ago

How do you propose to pay your employees, rent, etc. with $100 per car sold? Granted you are reducing some costs due to not having inventory besides your test/display models. IIRC most dealerships make the bulk of their income on service which Musk has described as a non-starter.

conductr 13y ago
I'm assuming I could run the sales more efficiently, less employees, under the stated model. $100 might not be the right number, just a point that it would be negligible. Also I'm also assuming tesla would give me a large market/city/region. I don't see the need of having so many locations like ford, gm, others currently have.

plainketchup 13y ago

The problem (from Tesla's perspective) with giving you a franchise is that the current franchise laws make it effectively impossible to take back that franchise, short of going to bankruptcy court. There are some truly awful dealerships out there, but Chevrolet had a hard time closing bad ones, even with the help of a bankruptcy court. Maybe you'd do an better job than Tesla of holding the customers' hand through the process of their first electric car purchase, but maybe in five years you'll decide there's more profit in high-pressure sales techniques. The cows have already left the barn at that point and there is nothing Tesla can do to stop you (so your promise to only take a $100 commission on each sale is worthless). You seem skeptical that dealerships are adding a large markup. Maybe that's true, but then why are the dealer's so adamant that Tesla only be allowed to sell cars through franchise operations? The dealers have nothing to worry about if you're right. It's not as if Tesla is taking away a current franchise. They're simply not franchising in the first place.

conductr 13y ago
You make good point on longevity of the relationship. I figured tesla could solve this with the right contracts when they did setup a dealer. That might not be the case. I not skeptical and believe dealers do add costs. Significant probably. I don't have the data to know to what degree. I'm just suggesting tesla scrap the current dealers and build their own network with its own set of rules and economics. There may be valid reasons that is a bad idea, but i would be glad to be a part of it