Tesla Motors (TSLA -0.7%) CEO Elon Musk explains in a blog post the rationale for the company...

Tesla Motors (TSLA -0.7%) CEO Elon Musk explains in a blog post the rationale for the company setting up its own retail stores to disrupt the dealership model by noting any salesperson selling a electric vehicles alongside gas-powered cars faces a conflict of interest. Musk on dealers: "It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business."

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Comments (10)
  • wallstjoe
    , contributor
    Comments (26) | Send Message
    Give him a drug test!
    22 Oct 2012, 01:57 PM Reply Like
  • azblackbird
    , contributor
    Comments (358) | Send Message
    Why set up your own retail stores... why not pawn your sales off to Sharper Image or Neiman Marcus. They're well known for novelty items for the rich.
    22 Oct 2012, 02:00 PM Reply Like
  • zubikov
    , contributor
    Comments (99) | Send Message
    Smart! Can't push this non-traditional car through traditional distribution channels. Tesla is at the mercy of generic sales people to push its product. It has to break away from that dependency and gain control over everything from personnel, to supply chain management, to the showroom layout.


    Might be a huge investment, but if they're really in it for the long haul, this is the way to do it right from the beginning.
    22 Oct 2012, 03:11 PM Reply Like
  • Randy Carlson
    , contributor
    Comments (3596) | Send Message
    It does not seem that any 'dealers' are clamoring to represent Tesla on the basis that they could do a better job of evangelizing this technology to the public, generating a larger order stream, or supporting Tesla's products on the road.


    We are looking at nothing more or less than a political monopoly that is screaming as their ox gets gored.
    22 Oct 2012, 03:16 PM Reply Like
  • azblackbird
    , contributor
    Comments (358) | Send Message
    >>>We are looking at nothing more or less than a political monopoly that is screaming as their ox gets gored.<<<


    Sounds like you have a clue. Now explain it to the "feel gooders".
    22 Oct 2012, 03:19 PM Reply Like
  • juicejack
    , contributor
    Comments (88) | Send Message
    Spoke to a Tesla salesman this AM in Santa Monica. Such stores are not illegal in California, so just maybe the auto lobby is not as strong here as I feared.


    Got to sit in one of the cars. They are nice cars -- forget electric! Nice fit and finish, comfortable seats, big view screen for instrumentation and entertainment.


    In all a nice car. That it's electric and will save me $300 a month is gas is ...(you guessed it) priceless.
    22 Oct 2012, 04:27 PM Reply Like
  • artsci
    , contributor
    Comments (20) | Send Message
    In the interest of offering a reasoned response rather than the rants already posted, the evidence suggests Musk is right. But why pay any attention to evidence when one can so easily spout off-the wall uninformed opinions?


    In fact one of the complaints that many Volt owner have made about some Chevy dealers is that the sales staff try to push potential Volt buyers into Chevy ICE models. There's a whole thread on the Volt web site devoted to this topic and the bad dealer experiences Volt buyers have had. And some GM dealers have even gone on public record about their unwillingness to sell Volts, these I think representative of the large contingent of fossil fuel junkie dealers.
    22 Oct 2012, 04:32 PM Reply Like
  • Randy Carlson
    , contributor
    Comments (3596) | Send Message
    So let's see, Tesla has improved the design of automobiles (more room, quieter, better handling, quicker acceleration...) and they have improved the efficiency (89 EPA mpg) and they improved the sustainability (zero CO2 from the vehicle) and they made intercity travel fuel-cost-free (SuperCharger network) and now they are improving the buying experience (fashionable stores, no comissions, delivery to your door).


    All this stuff sounds like some touchy-feelie things a California hippy run outfit like Apple might do. It'll never work!
    23 Oct 2012, 02:35 PM Reply Like
  • Miguelos
    , contributor
    Comments (4) | Send Message
    I don't own any TSLA stock but I[m following it closely. Musk is an intriguing personality, it may turn out to be some kind of Steve Jobs. I believe that while the gas saving is an important factor little attention is paid is to the fact that the sum of the cost of the parts, not to mention the repairs, of any fuel car is well above its purchasing price. If we don't have cheaper and far more advance electric cars is, I believe, in no small part because the auto industry knows well where its larger profits come from. This may not be a consideration for those who change cars every other year but not for the bulk of owners who keep them long after the warranties have expired. It looks like finally the bells are tolling for the fuel car in exchange for less noise and cleaner air. Not at all a bad deal.
    24 Oct 2012, 09:12 AM Reply Like
  • King Edward VIII
    , contributor
    Comments (277) | Send Message
    Tesla is doing the right thing in setting up the stores: this way it can retain a much higher margin (main reason behind the choice), drive the sales more effectively and have a better control of the sales process and customer experience.


    However, the idea that the dealer has a conflict of interest is not factually based: if a dealer could invest money in setting up a Tesla outlet, he will probably set up a separate legal entity and a separate team managing it and these people will not have the opportunity to steer the customer from an electric Tesla to an ICE Tesla. The dealer will try its best to make that outlet profitable (unless we are thinking about multibrand outlet which are not really what we are talking about here).


    From a legal point of view, I think that Tesla is breaking the law in those states where OEMs are not allowed to sell directly, since the store cannot be compared to a motor show. They sell cars there and all comments about the fact that you are just told to do it on the web are nothing more than an attempt to circumvent the law.


    However, I also think that the law should be changed since it's plainly stupid, I can't find another definition (and I'm sorry for my friends at NADA, but it is what it is). In Europe it's perfectly legal for OEMs to have and manage retail stores, provided that the condition at which they sell their product to their stores are the same they apply to franchised dealers. It's called fair competition conditions.
    So much for America's claim of being a society based on competition and freedom in business and Europe being the cradle of socialism and protectionism. I prefer the European way (at least in this case, that is).
    25 Oct 2012, 07:41 AM Reply Like
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