The Day editorial board has penned an op-ed aimed at Tesla, practically trying to talk Tesla into “playing by the rules” in Connecticut. Criticizing Tesla for wanting to sell directly to its customers, wanting to be able to skip legacy dealerships who are not committed to BEVs and all that comes with that, the op-ed forgets to highlight how the system is broken and the fact that Tesla would hinder itself if it played by the rules of legacy auto.
Tesla is handing the state jobs and business.
They are blocked by dealerships.
✅ Levels the playing field.
✅ Increases competition.
✅ Adds jobs.
— Tesla Owners Connecticut (@CtTesla) September 5, 2021
The Tesla Owners Club of Connecticut noted that other than Tesla, no new American auto manufacturer has been able to reach volume production in almost a century. Tesla is the only one and it’s bringing business and economic growth to places around the country. Yet Connecticut continues to allow dealerships to block Tesla.
The benefits of allowing automakers to sell directly to consumers include leveling of the playing field, increased competition, and more jobs. However, dealerships want to do all that they can to prevent Tesla from coming onto what they see as their territory and from competing with their industry in new ways.
The op-ed seemed, to me at least, to be practically begging Tesla to give up on its goal of selling directly to customers in Connecticut. The headline, “Tesla would rather fight than deal,” and the opening sentence, “Come on, Tesla, can’t you just play by the rules we have here in Connecticut?” paint a picture of Tesla as a lawless rule breaker. The truth is that Tesla is ushering in change and dealerships are terrified of change because they know that the dealer model is not only outdated, but that consumers hate it — yet they are making millions or billions off of it.
“It is becoming clear that Tesla won’t retreat from its direct-sale model and Connecticut car dealers are equally committed to working to try to prevent that change.”
The op-ed claimed that dealers can act as advocates for customers in the case of enforcing car-manufacturer warranties and that EVs produced by legacy auto are being sold through dealerships. The former claim has been thoroughly discusses elsewhere and is basically smoke and mirrors. The comment about EVs being sold through dealerships is a bit spotty. In February of this year, the LA Times noted in a Letter to the Editor piece that most of the time, traditional auto dealerships will try to dissuade you from buying an EV. This happens because dealerships don’t make nearly as much money on parts or services for EVs. From the article:
“And, if the automakers really wanted to sell EVs, they’d build more compelling products.
“Meanwhile, the world’s leading EV manufacturer, Tesla, can’t make its vehicles fast enough. Tesla is building new factories on three continents to satisfy a steadily growing demand. They make EVs that people want: beautiful styling, exceptional performance, and an unparalleled safety record.”
In a more recent article from the Wall Street Journal published in May, the author pointed out that EVs are the future for the US auto industry if dealers can just figure out how to sell them. In July, I wrote an article sharing the experience of YouTuber Get Energi when he bought a Ford Mustang Mach-E through a dealership. His video shared details of how he was scammed, and he was told point-blank by his salesperson that they had no interest in selling the EV.
“I don’t know anything about this vehicle and we don’t really care to learn either.”
In June of 2021, CNBC wrote that although GM and Ford are all-in on EVs, thousands of dealerships across the country will need to embrace the electric future. Some, the article noted, are working towards that goal, but service technicians still need to be trained to maintain EVs.
One key concern, the article pointed out, is that EVs don’t need the oil changes, transmission repairs, and other services that ICE vehicles need. These services account for 50% of dealers’ gross profits. So, no, I don’t think dealerships are selling EVs in the manner that The Day editorial board insinuated. Yes, legacy auto is making EVs in order to catch up to Tesla — after thinking that EVs such as Teslas were impossible to make, or to make at a profit, or to sell in high volumes. But dealerships aren’t there yet.
I think that for dealers to survive in an industry that is led by Tesla, they need to play by Tesla’s rules. This may sound a bit conceited, but Tesla is the leader of this industry and if dealers want to succeed, perhaps they should stop wasting money lobbying local and state governments and embrace the change.