Diarmuid O'Connell, Tesla's vice president of business and corporate development, argues that this old-fashioned approach is an impediment in a radical business like selling EVs.
"There is a phase, after the early adopters, where you have to help people to compare and understand the benefits of electric drive versus gasoline power," O'Connell says. "We believe we're best suited to doing this because, in a traditional dealer environment, the bread and butter of an auto dealer is selling traditional technology."
The flip side of Lacy's local-business-is-good-business argument is the middleman effect: You pay more to buy a car from a local dealer. O'Connell cited "a Department of Justice study that found that 5 to 10 percent is added to the cost of a car because of the dealer system," and decried the idea that dealers exist "to protect customers."
O'Connell also says that having dealers sell Teslas alongside gasoline-powered cars would require the salespeople to "talk down their existing technology," which they would be disinclined to do, thus placing Teslas at a comparative disadvantage (though this logic might not fly with the American Chevy dealers who've moved more than 10,000 Volts so far this year from lots crowded with gas-powered cars, or the Nissan dealers who've sold a similar number of Leafs).
However, despite Tesla's current combative nature toward the established dealership system—and in what might be a disappointment to those hoping Tesla will disrupt the current car-buying experience—O'Connell tells PopMech that the EV-maker is not ruling out the possibility of establishing its own dealer network once the company grows large enough. "Elon and I have both said that there is a time when we will also want to sell our cars through franchise dealers," O'Connell says. "When we're selling a high-volume vehicle, hundreds of thousands a year, it's going to make a lot more sense to place 100 cars at once with a franchise dealer than to sell them one by one as we do right now."
And, he says, there's no reason Tesla dealers couldn't become community institutions just like any other car dealership. Tesla is already diving into some of these traditions: It sponsored a kids' baseball team in Palo Alto, Calif., and a Fourth of July parade in Florida. Last year Tesla even provided Santa with a whisper-quiet Model S to sled about in a Washington, D.C., holiday parade. "Why wouldn't we fund Little Leagues and YMCAs, as any business in the community would?" O'Connell says. "When we're in a community, it makes perfect sense. We're a business in that community."
We continue to appreciate Tesla's attempt to shake up the industry's accepted—and often outmoded—wisdom, almost as much as we look forward to seeing what kind of coffee and pastries are served at the brand's franchise in Peoria, Ill.
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