I completely agree that TSLA is not a Saul stock and likely will never be.
I think that it may have been prior to the SolarCity acquisition. I really do not know for sure. But I think that a lot of the discussion on this board is also about when to exit as much as it is when to buy. But if people think that this discussion should move boards, let me know.
It is hard for me to imagine the major automakers abandoning their dealership model without MAJOR lawsuits.
Plus, if electric cars are in the showroom next to ICE cars, will the salespeople themselves know how to sell the electric cars? What will they say? “Yes, all of the ICE cars in our dealership are obsolete, you should go electric”.
Changing business models/business practices is far easier in theory than it is in reality.
I combined these since they sort of go together.
I am not sure that they will have to abandon that model. First, look at WalMart. They are trying to compete with Amazon. I just made my first online purchase with them because they were cheaper than Amazon and gave me free shipping. Is WalMart going to abandon their stores in trying to emulate the Amazon customer experience? They do not need to. In fact, I can see them moving to a Prime-like service by incorporating their Vudu service with free shipping. And still, the stores will be there as they will still serve a purpose. Amazon recognizes that need and I think that is a part of the Whole Foods acquisition.
I think that there is a place for dealers. And they can be placated.
-
People still like showrooms, just like they still like to browse bookstores and clothing stores. And they are already selling ICE and EV side by side.
-
Will ICE really completely go away? Between Luddites, rural population, range concerns, collectors, and just the roar of the engine and personal preferences; I think that there will be ICE demand for some time to come. There will just be those that do not want an EV. And short of a communist government type of ICE ban, I think that there will be some demand. (Hmmmm, where will NASCAR go with EV versus ICE?)
-
Automakers can give dealers a small commission on the online sales based on future support and/or territory rights. I think they can smooth the waters that way. Lots of manufacturers that use manufacturer representative agencies work out payment arrangements for orders into a rep’s territory that the rep may not have initially uncovered and/or sold.
-
From a dealer service standpoint, I am not sure of this impact yet. I agree that a lot of service issues around the ICE goes away. But there are still a lot of moving parts and mechanical issues. Brakes, tires, ball joints, bearings, electrical problems, etc. will still be there. It likely will not be as much as with ICE, but it will still be there. And again, I thik that there will still be plenty of ICE based repairs to be made for some time.
-
Yes changing business models is tough. But if they want to survive, they will. I do not see an inherent moat in the need to adjust or change the model. Other than getting employees “on the bus,” I do not see a hard obstacle.
True, but how many TSLA customers are already out there, are active proponents of the company/car, and have yet to make a purchase? I count myself as one. Tesla has never earned a cent of revenue from me but I’m a proponent of the brand and my next car purchase (in 5+ years) will almost certainly be a used Tesla of some kind. Elon Musk has 12 million followers on twitter. If I was to guess I would already assume that the company has a million “loyal customers” of sorts, even if most of them haven’t made a purchase. With 400,000+ preorders for Model 3, I think the odds are very good that this number is over 2 million or so by now (and growing every day)
I agree, but also disagree. Consider why you are not a Tesla customer yet. And when it does come time to put the money on the table, could you have changed your mind about the EV make and model you now want?
I think that a lot of these future Tesla customers may end up being future EV customers of other brands. It is just that Tesla is the EV name that they identify with today, when they are not ready to make a purchase. If you are looking for a luxury EV, are you sure that you won’t end up with an i3 or an I-Pace in a few years instead?
I worry a bit about the pre-orders on the Model 3. At this point, I do not think that there have been any $35K versions delivered. And I wonder how many of the pre-orders will re-evaluate when they recognize that everything that they expect in a Tesla is in the $56K version of the Model 3, not the $35K version. And then they have to either come up with an extra $20K or settle for something below their initial expectations. And then, do they start looking at alternatives?
I don’t have all the answers. And I probably am not even asking all the right questions. But right now, I still have a lot of concerns.