4 ms·

Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise? Is it simply because it's less profitable than direct sales?

Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise? Is it simply because it's less profitable than direct sales? Is it not laissez-faire enough?

Mithaldu 12y ago
I understand that people are downvoting this because of the obvious "it impacts freedom" downside. However before downvoting please consider that the financial aspects are by far not clear to everyone, especially not to the programmer audience of HN. I too would love to read an earnest analysis of the impact on Tesla's sales were they to restructure their Michigan sales efforts to comply with the law by starting to use middlemen. Edit: Even the article itself throws that question up: "it’s not actually obvious that Tesla’s decision to operate without dealers will end up being a more profitable business model in the long run, given the valuable marketing, sales, and maintenance services that many local dealers provide."
- nmcfarl 12y ago
  I did not downvote - but if I had it wouldn't have been about freedom, it would have been about prices and corruption. How much overhead do all those pointless, and expensive dealer employees add to the cost of my car? And in particular how much do the Dealers themselves add - these are very rich men, and all so because the state has decided to force me to pay for their existence. And how much of that money goes back to the Capitol to line politicians pockets?
  - Mithaldu 12y ago
    Leading questions and implications, but no answers. You bring up costs without even doing a rough attempt at quantifying them and seem to ignore that dealers provide value too by making it unnecessary for producers to maintain a sales location, sales personnel, local marketing and shield producers from having to deal with some maintenance actions. As i said, an earnest explanation is warranted.
    - lucio 12y ago
      If dealers provide "value", why a law is required to "protect" them? "It is error alone which needs the support of government. Truth can stand by itself."
    - nmcfarl 12y ago
      My goal was not to quantify anything - nor provide you with any answers except to the question about why would someone downvote a comment that asks "What so bad about distributing Tesla vehicles through a dealership franchise?" To some people - like myself who have had universally horrific and expensive experiences with dealerships (and in my case the much better, cheaper, and competent experiences with non-dealer mechanics, and used car salesmen of all people.) dealers are bad and their existence should not be propagated. They are bad enough that I could easily downvote the question on that alone (without the political angle which lucio summed up nicely) if I was fast with the downvote button. Explaining that and that alone was my goal - and one it looks like I failed at.
      - Mithaldu 12y ago
        For context: You probably failed because i've never dealt with car dealers. I live in germany and for the past 32 years have never even had a car in mine or my direct relatives' possession. I don't even have a license.
stanleydrew 12y ago
There's nothing inherently bad about it. But why shouldn't an automaker be free to decide how it distributes its product?
remarkEon 12y ago
I think the answer might simply be that it's unnecessary, and that the dealership model costs consumers money. Unnecessary because dealerships primarily make their money through servicing and Telsa, because there's no internal combustion engine, just doesn't have a lot of those costs. No oil changes. No fuel system cleanings. Etc etc. Now. What I don't like about this argument is sort of how snarky everyone gets toward people hostile toward Tesla. The way they do it probably makes more sense than the status quo. But being from the midwest, I can definitely get how threatening that can be. That's for sure not an excuse, but people do need to realize in their rhetoric that disruption hurts sometimes. And we shouldn't be blind to that.
- cast_asunder_12 12y ago
  It was just a genuine question. I'm amazed that I suffered downvotes because of it, but it just goes to show that my instincts were correct (hence the throwaway account), and that it would be perceived as a tone-deaf, buffoonish question. So much for the old adage: "there are no stupid questions"
grapeshot 12y ago
Tesla is trying to keep tight control over the availability of spare parts and diagnostics tools for now, probably because Musk doesn't want any bad press from problems with a salvaged Tesla someone has improperly repaired. This is likely to cause them problems with resale value in a few years once the warranties on the first cars start expiring, and drive up insurance prices for the Model 3. See the case of the abandoned Stretchla project[1] and the other news report of a salvage titled car that the company refuses to enable charging on because it was worked on by an unapproved mechanic. [1]: http://cafeelectric.com/stretchla/ http://cafeelectric.com/stretchla/
bronson 12y ago
Because it's additional overhead where none is needed.
bsder 12y ago
> Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise? From the consumer standpoint? That's easy: 1) another middleman adds to the price of the product and 2) there is a reason why people hate car salesmen. From Tesla's point of view? Who's going to do this? You're talking about a car that sells single digits per year in all but very large or very specialized markets. So, the income per year for a franchise would be less than $100,000 per year at best. Tesla would have to subsidize that franchise to such an extent that it would effectively be selling direct anyway. But I suspect that there are bunch of franchise control laws that would cause issues, too. The biggest issue everybody has is that these laws are blatantly protecting local car sales franchise monopolies with absolutely no justification from any consumer protection perspective.

Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise? Is it simply because it's less profitable than direct sales? Is it not laissez-faire enough?

Mithaldu 12y ago

I understand that people are downvoting this because of the obvious "it impacts freedom" downside. However before downvoting please consider that the financial aspects are by far not clear to everyone, especially not to the programmer audience of HN. I too would love to read an earnest analysis of the impact on Tesla's sales were they to restructure their Michigan sales efforts to comply with the law by starting to use middlemen. Edit: Even the article itself throws that question up: "it’s not actually obvious that Tesla’s decision to operate without dealers will end up being a more profitable business model in the long run, given the valuable marketing, sales, and maintenance services that many local dealers provide."

nmcfarl 12y ago
I did not downvote - but if I had it wouldn't have been about freedom, it would have been about prices and corruption. How much overhead do all those pointless, and expensive dealer employees add to the cost of my car? And in particular how much do the Dealers themselves add - these are very rich men, and all so because the state has decided to force me to pay for their existence. And how much of that money goes back to the Capitol to line politicians pockets?
- Mithaldu 12y ago
  Leading questions and implications, but no answers. You bring up costs without even doing a rough attempt at quantifying them and seem to ignore that dealers provide value too by making it unnecessary for producers to maintain a sales location, sales personnel, local marketing and shield producers from having to deal with some maintenance actions. As i said, an earnest explanation is warranted.
  - lucio 12y ago
    If dealers provide "value", why a law is required to "protect" them? "It is error alone which needs the support of government. Truth can stand by itself."
  - nmcfarl 12y ago
    My goal was not to quantify anything - nor provide you with any answers except to the question about why would someone downvote a comment that asks "What so bad about distributing Tesla vehicles through a dealership franchise?" To some people - like myself who have had universally horrific and expensive experiences with dealerships (and in my case the much better, cheaper, and competent experiences with non-dealer mechanics, and used car salesmen of all people.) dealers are bad and their existence should not be propagated. They are bad enough that I could easily downvote the question on that alone (without the political angle which lucio summed up nicely) if I was fast with the downvote button. Explaining that and that alone was my goal - and one it looks like I failed at.
    - Mithaldu 12y ago
      For context: You probably failed because i've never dealt with car dealers. I live in germany and for the past 32 years have never even had a car in mine or my direct relatives' possession. I don't even have a license.

stanleydrew 12y ago

There's nothing inherently bad about it. But why shouldn't an automaker be free to decide how it distributes its product?

remarkEon 12y ago

I think the answer might simply be that it's unnecessary, and that the dealership model costs consumers money. Unnecessary because dealerships primarily make their money through servicing and Telsa, because there's no internal combustion engine, just doesn't have a lot of those costs. No oil changes. No fuel system cleanings. Etc etc. Now. What I don't like about this argument is sort of how snarky everyone gets toward people hostile toward Tesla. The way they do it probably makes more sense than the status quo. But being from the midwest, I can definitely get how threatening that can be. That's for sure not an excuse, but people do need to realize in their rhetoric that disruption hurts sometimes. And we shouldn't be blind to that.

cast_asunder_12 12y ago
It was just a genuine question. I'm amazed that I suffered downvotes because of it, but it just goes to show that my instincts were correct (hence the throwaway account), and that it would be perceived as a tone-deaf, buffoonish question. So much for the old adage: "there are no stupid questions"

grapeshot 12y ago

Tesla is trying to keep tight control over the availability of spare parts and diagnostics tools for now, probably because Musk doesn't want any bad press from problems with a salvaged Tesla someone has improperly repaired. This is likely to cause them problems with resale value in a few years once the warranties on the first cars start expiring, and drive up insurance prices for the Model 3. See the case of the abandoned Stretchla project[1] and the other news report of a salvage titled car that the company refuses to enable charging on because it was worked on by an unapproved mechanic. [1]: http://cafeelectric.com/stretchla/ http://cafeelectric.com/stretchla/

bronson 12y ago

Because it's additional overhead where none is needed.

bsder 12y ago

> Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise? From the consumer standpoint? That's easy: 1) another middleman adds to the price of the product and 2) there is a reason why people hate car salesmen. From Tesla's point of view? Who's going to do this? You're talking about a car that sells single digits per year in all but very large or very specialized markets. So, the income per year for a franchise would be less than $100,000 per year at best. Tesla would have to subsidize that franchise to such an extent that it would effectively be selling direct anyway. But I suspect that there are bunch of franchise control laws that would cause issues, too. The biggest issue everybody has is that these laws are blatantly protecting local car sales franchise monopolies with absolutely no justification from any consumer protection perspective.