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Comment by medler | Hacker News Reader

This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO. He wasn’t saying dealerships are going away; he was actually saying the opposite. The point he was making was that Ford is going to adopt some of Tesla’s practices while using the dealership network to compete with them.

Here’s the quote with more context: “I believe for retail, we have to -- it's kind of like what happened between Amazon and Target. Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon. They used their expertise as a physical retailer to their advantage, but they modernized the e-commerce piece. So it would be really easy to do business with them. It's exactly what we have to do on the retail side. We got to go to non-negotiated price. We've got to go to a 100% online, the vehicle there is no inventory goes directly to the customer, 100% remote pickup and delivery, but then we have this opportunity to use our physical presence, they outperform them. Like, I believe some Mach-E and Lightning customers would love to have a Mustang for the weekend. Maybe they want a Super Duty. I can do that, they can't do that, unless they ran a Ford.”

Source: https://seekingalpha.com/article/4515793-ford-motor-company-...

View on HN

Ford reorganized back in March so that their EV business (Model e) is separate from the legacy ICE business (Ford Blue). There was speculation at the time that this was in part free itself of the dealership sales model. The dealers would keep the dying ICE business while the fast growing EV business would start with clean slate. Farley was quoted describing the EV sales model as:

> "It's going to be much more efficient, a lot more online. It's going to be a really different model."[1]

Obviously this will be very controversial and subject to interference by state legislators who have often protected dealerships. Will be interesting to see this transition.

https://insideevs.com/news/571959/ford-dealerships-impacted-...

Huge thanks for this context.

> Ford reorganized back in March so that their EV business (Model e) is separate from the legacy ICE business (Ford Blue).

State legislatures and courts have been smacking down this kind of shenanigan for nearly a century now.

Kinda fun when I get mildly downvoted for mentioning a relevant historical fact.

Not sure why you're being downvoted.

Personally, I think theres ~50% chance Ford will have to split into two companies (separate stock ticker etc.) to be allowed to have an EV only, no-dealership, sales model,

Excuse my ignorance, but how I understand is that ICE can't be sold directly to the customers, so that's why dealerships exists (?), so my question is, are EV not regulated or treated differently than ICE?

I believe the dealership network exists for historical reasons and car companies can't get rid of them for their existing models. Now's the time to change that using EVs as a reason. But it's something many car manufacturers would've liked to start doing 5-10 years ago.

EV are regulated also. See for example Tesla's trouble selling directly to customers in some states.

https://en.wikipedia.org/wiki/Tesla_US_dealership_disputes

EV are explicitly treated differently.

Telsa insisted on it's direct sales model and it was more politically expedient for regulators in many states to carve out an exception to the dealership requirement only for car companies that sell EV's exclusively (only tesla at the time).

While I suppose this didn't seem like a huge threat to the car dealership lobby in each state at the time it's clearly come back to bite them and is the main reason Fords Electric vehicle production and distribution is a different 'car company' on paper, so that they can take advantage of legislation designed for tesla.

Tesla also points out that its prices are fixed, and its salespeople are paid primarily on salary, not commission. “Customers will never be rushed into a purchase, haggle over the price of the car, wonder if they could get a better deal across town, or puzzle over confusing add-on products, like GAP insurance or rust-proofing.”

Back in the 1930s, the car companies established this system so that they could worry about making cars, and the franchises could worry about selling and repairing them.

Early on, though, the franchisees lobbied their state governments for protection. They feared, among other things, that the giant car companies could open up their own stores across the street, cut prices, and crush the franchise like a bug.

To prevent that kind of abuse, all 50 states passed “dealer franchise laws.” They protected the dealerships in various ways—including barring any car maker from selling directly to consumers.

Those laws didn’t foresee the modern era. What they meant, of course, is that “no car company that has franchises can sell directly to consumers.”

They weren’t even thinking about companies that don’t have franchises, because there weren’t any at the time.

Over the years, Tesla’s legal team has gone from one state legislature to another, pointing out how that rule has become outdated, and suggesting that it get changed. In some cases, they succeeded.

In others, though, Tesla is running into a tougher obstacle.

Is that an actual legal reorganization of the company that would separate contractual obligations, or is it more of an accounting and reporting thing?

The dealers brought it on themselves...many of them actively disincentivize EV purchases when you try to buy one.

Why? They want to protect that recurring service bay revenue. Oil changes, plugs, belts, etc.

The ICE is one of the minor items; still needs oil and fluids but are mostly maintenance free for a long while.

All of the other components still need maintenance. Tires, alignment, suspension etc.

I am not saying this isn't true, but EV's have a set of maintenance requirements too - there are still a lot of mechanical parts - tires, suspensions, doors, etc. Not to mention electronic maintenance but I guess dealerships would have to re-train, re-certify, and re-tool technicians for that

Not nearly on the same scale. I've had a Tesla Model 3 for over three years and 25k miles and have had no maintenance done.

I’ve only had my Y for four months now, but I’ve had this very unexpected feeling towards the car (and any EV). I can only describe it as an amalgamation of clean, elegant, and freeing.

While driving there is no engine noise, no unpredictable or delayed acceleration, no need to visit a gas station and have gas drip down the side of the car, and the knowledge that the drivetrain is simple and reliable and isn’t saturated with petroleum products.

I’ve owned some very nice BMWs before the Y, and while I greatly miss the suspension performance I can’t imagine going back to ICE.

Exactly. Tires, wipers, and I’m guessing alignment are the only things the average Tesla owner will ever need to worry about from what I’ve read before I took the leap.

The best description of my experience switching to an EV is that it’s been like going from a VCR straight to streaming. It’s fast, convenient, modern, and doesn’t really degrade.

How far back did you look? It wasn't that long ago that Telsa had problems with the drive units failing early, there've been a number of recalls for assembly problems, overly verbose logging and eMMC failures, touchscreen failures, etc.

Just for reference, I've had a Honda Fit for 13 years, and the only maintainance I've had done over what you no doubt had to do on your TM3 (tires, wiper blades) has been oil changes. The car has 164k miles on it.

I'm not saying the EV's are not theoretically more durable and (much) less maintainance-intensive. I am saying that the best of the best ICE vehicles are not as different as your observation about your own TM3 tries to suggest.

You're supposed to do more maintenance than that on your Honda Fit, such as spark plugs every 30k. Granted, it isn't much compared to other ICE cars, but you're downplaying the difference. Your car also has parts that frequently break on all ICE cars, such as a water pump, which simply don't exist on BEV cars.

https://www.normreeveshuntingtonbeach.com/honda-fit-maintena...

> Your car also has parts that frequently break on all ICE cars,

Well, theoretically yes. The point is that saying "my TM3 has 25k miles and zero maintainance" is worse than anecdata. It's no better than saying "My Fit has had almost zero maintainance at 164k miles". Far better to list the parts and systems not found in an EV, possibly along with likely maintanance schedules.

The spark plugs on the Fit are likely failing right now, btw.

> Your car also has parts that frequently break on all ICE cars, such as a water pump, which simply don't exist on BEV cars.

This isn't true. Tesla batteries are liquid cooled. When supercharging, you can hear the fan blowing on the radiator.

I have a Volkswagen BEV(an e-Up) and it absolutely has a water pump - it pumps coolant around the charger.

Edit: I think I relied to the wrong comment on this sub-thread, but this still contributes, I think.

My spouse and I recently purchased an extremely difficult to find plug-in hybrid EV. We had placed a hold on a specific vehicle destined for delivery to the dealership a few months later. We paid a deposit and signed a receipt that made reference to that vehicle and was given the final price sheet for that specific vehicle at deposit time.

Two days before we were scheduled to pick it up (more than two months after we put the deposit down) the sales guy called and said that the dealership had instituted a new policy on the first of the month that no sales of that specific model and trim level would be authorized by the deal desk without an interior and exterior water resistant coating, and that the lowest price he could offer was an additional $2,500.

As you can imagine that did not stand up to scrutiny and we walked out of there with the vehicle at the total price recorded in the initial paperwork. They signed on the dotted line and never said a word about any new policies until we were ready to pick it up. They did this in a U.S. state where that practice is not legal.

You bet we told Toyota about that when they sent the survey.

If they weren’t making enough to meet their needs then they should have known that when they were negotiating.

> They want to protect that recurring service bay revenue. Oil changes, plugs, belts, etc.

In the past decade we've had one new ICE car and two new EV cars.

The ICE car has been in the dealer once for a couple hours to replace rear hatch support struts (nothing to do with the engine, so could happen to any EV that has a hatch).

The EV cars have spent many weeks in the dealer for repairs and waiting for parts. Also issues unrelated to the engine, this was for door lock problems and window regulator problems.

In theory the EV motor is simpler than the ICE engine. But in practice, the ICE engines are bulletproof and almost never have problems. In 36 years of owning cars, I've never had a car in a shop (or dealer) for engine issues. It's always electrical system, electronics, seats, windows, shocks, etc. Components that both ICE and EV cars share.

> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it

Ford announced 3 months ago that they were forming a new corporation, Ford Blue, whose purpose is to skirt state dealership laws in order to lawfully sell these EVs direct to consumers. So this is definitely not just a comment.

https://www.freep.com/story/money/cars/ford/2022/03/02/ford-...

Was typing almost the same thing at the same time.

The OEMs want to us EVs to finally dump the dealerships.

I’m skeptical that this reorg will allow Ford to sell direct to consumers, and I haven’t seen any reporting saying that it will.

Notably, Ford has explicitly said they’re not doing that: “We’re not keeping dealers in the mix 'for the moment.' We are betting on dealers for the long term. I want to make that really clear. I’m not mincing words. We will have new standards and a new experience. But we learned a lot by watching Tesla."

Maybe going direct is the secret plan, but I don’t see how they get there.

> Maybe going direct is the secret plan, but I don’t see how they get there.

Yeah, the dealership and the state level dealership associations aren't going to go out of business without some good fight. Even though I personally don't like the markup to be paid at the dealerships, but they exist for some good reasons: educate the consumers, financing, DMV paperwork and most importantly service your vehicles. EVs need much less service visits but when they do - it's likely harder for DIYers to tinkle with High Voltage battery systems and/or the infotainment firmware diagnostics and updates.

>> educate the consumers

Every dealership I've been to has been more interested in feeding me whatever line of crap they think will get me to buy a car, not actually educating me about the different products available.

>> financing, DMV paperwork

Tesla and Carvana have proven these can be taken care of without a third party dealership. In most cases, financing is provided by a bank or credit union, not the dealership itself

>> and most importantly service your vehicles

Unless the fix is covered by warranty, I'm not taking my car anywhere near a dealership. They charge considerably more money than my trusted mechanic. My Hyundai dealership wanted $125 just for an oil change on a 2013 Sonata.

In theory, a dealership could be good for all of these things. In practice though, they suck. There is a reason most people hate car dealerships.

I had a dealership quote me $2600 for a required service package. The price of the parts was $400. It’s a bit of work but the labor was effectively over $366 per hour. I could have had the job done by an independent shop for $1000. When I pushed back, the service manager said he could do it for $1500.

I have a recall repair on the car as well so I think my final move is to use that as leverage to push the price down further. Getting the repair done by the dealer gets you a warranty by the manufacturer, which is the only additional value that I see.

>I had a dealership quote me $2600 for a required service package.

I don't get it. "Required" by whom?

Just say no, negotiate a better price, or take the car elsewhere.

>Getting the repair done by the dealer gets you a warranty by the manufacturer, which is the only additional value that I see.

No, the warranty exists regardless of where the car is serviced.

> No, the warranty exists regardless of where the car is serviced.

I'm not sure if that's true for Ford, but this is in the owner's manual for the Nissan GT-R.

> OBTAINING WARRANTY SERVICE

> You must take the vehicle to an authorized Nissan GT-R Certified dealer in the United States or Canada during regular business hours at your expense in order to obtain warranty service.

> WHAT IS NOT COVERED

> Repairs performed by anyone other than a Nissan GT-R certified dealer.

See the section titled "OBTAINING WARRANTY SERVICE" on page 11 and "GENERAL EXCLUSIONS" on page 12. https://www.nissanusa.com/content/dam/Nissan/us/manuals-and-...

> WHAT IS NOT COVERED

> Repairs performed by anyone other than a Nissan GT-R certified dealer.

IANAL, but I don't think that clause is legal in the US. Any equipment originally covered by a warranty and still within the time/mileage limits of the warranty must still be covered unless Nissan can prove that the work done by an outside tech was the cause of failure.

They certainly try to enforce it via bureaucracy. My local Nissan dealer wouldn't even do an oil change on mine because they're not a GT-R certified dealer.

It's routine maintenance. My car is required to have its timing belt replaced by 100,000 miles. If the dealer does the work, the manufacturer provides a warranty on the parts. Since a broken belt could destroy the engine, this is a replacement that should be done and it's nice to have the warranty.

> There is a reason most people hate car dealerships.

I really, really don't understand why the model won't die. I'm guessing regulatory malfeasance.

You guessed correctly. Thanks to aggressive lobbying direct sales is illegal in most states.

Direct sales were forbidden as a consumer protection back when dealerships were disconnected franchises with no licensing or direct relationship with the car manufacturers. To eliminate unscrupulous dealerships but protect the ones that were doing useful services the regulations made a compromise that eliminated direct sales.

It may be aggressive lobbying that keeps this status quo long past the original intent, but the original compromise came from a good place (eliminating "lemon dealers" and "lemon manufacturers" that refused to provide service/support/recalls).

>Carvana have proven these can be taken care of without a third party dealership.

Ah yes, Carvana, the company who has had its dealer license revoked in multiple States for a variety of violations, whose stock is down 90% (while insiders cashed out) and laid off thousands of people. What have they "proven"?

Al these things are available at official manufacturer's shops in Europe, no need to go to private dealer. And for some of those you're likely to get better rates if you shop around (car service, financing)

Official manufacturer’s shops in Europe are dealerships or are affiliated to a dealership. That’s literally what a dealership is.

The difference is that the customer experience seems to be radically different in Europe. I have no bad things to say about the dealership I had to deal with. They mostly sell at MSRP. They will gladly order you a customised model from their online platform if you need something specific and don’t mind the delay. You will have to negotiate the price if you want them to take back your old car but that’s mostly done in a very professional manner. Even buying used is generally quite pleasant. You will not get swindled at an official dealership. Meanwhile the US seems extremely cutthroat.

>You will not get swindled at an official dealership. Meanwhile the US seems extremely cutthroat.

This seems completely contrary to my experience. How on earth do you get swindled? Know the price of the car you want, refuse to pay more; you are the customer, they need to make a sale. Dealerships are abundant in most cities and compete hard with each other. There are always deals to be had.

Why do so many people here find this difficult? Salesmen are usually dying to sell you a car, and never want to see you walk out.

>> EVs need much less service visits but when they do - it's likely harder for DIYers to tinkle with.

A car handle on a Tesla that needs replacing is $1,000.

That is just the price Tesla imposes on the costumer.

A decent right to repair would cover most of these kind of things

https://fighttorepair.org/

That's a luxury/high-tech car problem, not an EV problem. The problem is that currently, EVs only exist in that segment (excepting the Dacia spring, which is a basic car with a basic EV powertrain, but it's only available in certain markets)

Hey, look at that - actual climate-control knobs, and an ordinary dashboard! Thank you for pointing this vehicle out.

The old car saying was: if you buy from BMW you pay for BMW.

Tesla wants to be the new BMW and at least in US car sales today is the new BMW.

> educate the consumers, financing, DMV paperwork and most importantly service your vehicles.

I bought a new car direct and I was educated, my credit union was better than the manufacturer's financing offer, the manufacturer did DMV paperwork, and the manufacturer does service.

9 years ago.

What am I missing?

> What am I missing?

A useless middleman.

Memorial day Madness and wacky waving inflatable arm-flailing tube men?

Free hot dogs?

Hi I'm Al Harrington..

>my credit union was better than the manufacturer's financing offer

For long stretches of time most manufacturers were offering 0% financing. Tough to beat that.

Sure, the manufacturer was. This doesn't require a dealer.

> For long stretches of time most manufacturers were offering 0% financing.

On a higher price. If you took a discount that could not be combined with the 0 percent financing, and financed using traditional financing options, you ended up paying less money.

It's kind of fun (yet horrifying) to watch how well 0% financing works with consumers, even when it's clear that you'll get a lower price without it.

did you have an opportunity to drive the car before you bought it?

Yes.

- educate the consumer

The last two cars I bought the salesperson knew nothing about the cars. People can learn much more about cars by going to a web site than talking to a sales person.

- DMV Paperwork

Dealerships charge consumers for the privilege of submitting DMV paperwork. This could all be handled online. Don’t understand the benefit.

- service your vehicle

I go to independent mechanics. They service my vehicle just fine.

Dealerships have got to go. They’re a huge waste of time space and money. They reflect crony capitalism at its worst.

Dealerships have got to go. They’re a huge waste of time space and money

I see value in having a local showroom where prospective buyers can test-drive several models to evaluate their driving experience. I don't think I'd ever buy a car without being able to sit in it beforehand.

Dealerships are orthogonal to local showrooms.

Imagine manufacturers buying out the dealership lots, turning a good portion of the lot to a small track for testing the cars handling, maneuvering, and acceleration without going onto public roads. I'm assuming a closed course will be much better for their insurance than going onto public roads and much more fun for customers since they'll (presumably) have straightaways and corners. And the fact that they could just keep a model car for each trim level for their line up might incentivize them to not be stingy on test drives (and when the car is past a certain point they sell it at a discount).

Another portion could be turned into electric charging stations using solar. With how many dealerships there are I think this is a neat use of the wasted lot space.

So all in all, you then would go check out the cars, order the car you want online, and then pick it up on arrival at the showroom, all while doing away with the haggling and downright scummy tactics dealers currently use. The fact they default to screwing unwitting customers over should be warning enough that there needs to be change.

agree on needing to sit in a car first, though I could do without the middleman. i'm kidding myself if I think the savings will get passed on to me!

> educate the consumers

I have yet to find to a situation where the overall direction of education flow was from the dealership salesperson to me.

That effect was significantly magnified when I was shopping for, and ultimately purchased, an EV. The only thing I can recall the salesperson knew more about that car than I did was where the dealership kept the keys.

I think it's also worth noting that Ford has an obscene number of fleet sales compared to the brands most people here buy. Some dealers will stick around for the same reason Caterpillar dealers exist despite those products not being the kind of thing you "just go to a dealer and buy".

Man, I wish. Dealerships are plague.

Slightly related, Tesla built a store on tribal land to avoid state laws.

Brilliant solution IMHO. It's located just outside Santa Fe which is very convenient. There's a huge number of Teslas in New Mexico that had all been bought out of state before they built this store. Now we have a place for local service for procedures that can't be done in the field.

Selling online without negotiated price is a big change. That should make the dealerships really uncomfortable in the long run… he's kind of saying "oh the dealerships could rent out Mustangs" but is that actually realistic?

Diplomacy is the art of saying “good dog” until you make it to the rock. Ford is learning what Tesla knew from the start: dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue, and dealers are incentivized to add “market adjustments” to vehicles (which Ford dealers have been doing) creating a poor customer experience. Ford has existing dealerships and is going to have a heck of a time hacking around dealer franchise law compared to EV automakers who have no established dealer network. Someone on Twitter recently posted their Model S turning over 400,000km with only $3k in maintenance costs. Imagine at scale what that does to dealership revenue when 5, 10, 15 million EVs are sold per year (which will happen in the next 5-10 years).

https://twitter.com/pluginalberta/status/1531406942119137281

> "We only profit in one way: from new car sales and new car sales alone," Maron said. "We can't ... profit from services because our cars have far less parts than gas-powered cars. There's no regular service visits for engine tune-ups and oil changes. ... We don't make money off financing programs. We don't have insurance products or add-ons. A franchise dealer would look at this and scratch their heads. They would not know how to make money on this model."

> Maron says Tesla is fully committed to its mission of replacing all gas-powered cars with electric vehicles -- a mission auto dealers may not be eager to embrace.

> "We don't simply believe that electric vehicles represent a nice complement to gas-powered cars," Maron said. "We believe it's imperative they are replaced entirely by electric vehicles. ... It would be impossible for traditional dealers to convey this message adequately. This isn't a knock on them, but dealers are not fundamentally committed to the mission of EVs — we are. They make 99% of their revenue off of gas-powered cars. If you're opening a Yankees team store, are you going to ask a lifelong Red Sox fan to manage it?"

https://www.buzzfeednews.com/article/johanabhuiyan/tesla-sla... (2016: 7 Reasons Why Tesla Doesn't Want To Sell Through Dealerships)

That is very impressive actually. Though your typo made me laugh out loud.

> Someone on Twitter recently posted their Model S turning over 400km with only $3k in maintenance costs.

400 kilometers and a $3k maintenance bill somewhat reflects the image of Tesla that you see a lot on the internet. Whether or not that is actually the case.

Distance typo fixed, thank you! Happy to have provided a chuckle.

> 400k km

? LOL

Why not just use megameters? 400Mm

OK, something about that looks odd. But what's the point in SI units if you can't actually use them?

Maybe 250k miles?

Ah but is a megameter 10^6m or 2^20m? ;)

That would be a Mebimeter, according to SI. Whether or not this sounds silly is another issue.

When have you ever seen a car dashboard display Mm. It was perfectly clear what they were trying to convey.

I am totally using Mm next time someone talks cars/bikes with me. Thank you.

Nope, miles are always a bad choice.

I've bought 3 cars since 2008, I've spent $0 at the dealer on maintenance, they're all ICE... you shouldn't be going to the dealer unless it's warranty work. [well partly true, had a covered recall].

That said I had a dealer cuss me out for bringing them a quote from a mechanic for the same clutch replacement. "I can't f**ing cover my dealership like that" as if it was my problem. Same dealer who charged me $2k for a repair when they had the recall letter in their inbox.

Sounds great pre pandemic, but these days the indies can't get parts the way the dealers can.

Heck, the dealers even have a hard time getting parts.

Right now sure... pay who you have to if you need the part. But supply issues will get solved, this is a temp situation.

I'm solving the interim by having 4 vehicles + mass transit + wfh.

> I'm solving the interim by having 4 vehicles + mass transit + wfh.

Is that, maybe, a little bit ... overkill? Quadruple redundancy, plus a failover, plus reduced demand. Phew!

my car, my kids car, my wife's car, my motorcycle + bought near a bus route to work + pandemic. Son's car will go away sometime but it's around if I need a replacement car.

Junkyards are an option for indy mechanics, unless insurance is being billed. I had a choice between maybe 3 months for a new part or next-day for a junkyard pull. Chose the junkyard pull, but I trust my mechanic to find control arms that aren't bent.

> dealership interests aren’t aligned with EV manufacturers. There’s very little service revenue

Citation needed. Both my EVs and ICEs needed similar amount of service. Breakage of drive trains are super rare nowadays (expect for over engineered performance stuff and just broken designs), same as breakages of batteries (cough, Bolt, cough).

All stuff my cars needed a service for in last 20 years were comfort features, gizmos, internal materials, electrical goblins, etc. Both ICEs and EVs.

Your ICE doesn't need oil changes, transmission fluid, a timing belt, spark plugs, or any of that?

Oil change is maintenance not service. But ok, let’s include that. It’s done at the same time as rotating tires, so it only adds few extra bucks of revenue for dealers (yes, you can rotate yourself/at other places, same as you can do oil change).

Transmission fluid for modern cars lasts about 100k miles. So you’ll do it maybe once, unlikely at your dealer as you won’t pay dealer tax for an old beater.

Exactly the same for timing belt and spark plugs.

Drive trains aren’t money makers for dealers for a long time.

Timing belt is the only expensive thing on that list (because of labor) and very few American market vehicles use timing belts anymore. The market has gone almost entirely to timing chains these days.

We’re back to timing chains? I remember we used to have them back in the old days.

> Citation needed.

https://www.motortrend.com/news/government-ev-ice-maintenanc...

https://www.consumerreports.org/car-repair-maintenance/pay-l...

https://www.energy.gov/eere/vehicles/articles/fotw-1190-june...

https://insideevs.com/news/527165/study-evs-ownership-40perc...

https://publications.anl.gov/anlpubs/2021/05/167399.pdf

These are very high quality sources, thank you.

The best citation on this site.

> "Diplomacy is the art of saying “good dog” until you make it to the rock."

this was new to me and the 'to the rock' part didn't make sense to me, so i looked it up.

http://marvin.cs.uidaho.edu/About/quotes.html this page says it's actually this: "Diplomacy is the art of saying 'nice doggy' until you can find a rock."

find a rock as in kill them? :O

No canines we’re harmed in using the turn of phrase in my above comment.

It doesn't have to be killing them, if a stray hostile dog is harassing you throwing a rock at it might make it go away

"the" was especially confusing to me and also had to look it up.

$3k in maintenance costs for 400,000km? I call bull shit. In Tesla tire sizes, you're looking at $1000 for a cheap ass set of tires. Certainly not gonna last 100,000 miles either.

Specifically says not including tires in the Twitter post.

Excluding the most expensive wear items is misleading though.

Tyre cost is highly variable depending on driving style etc - it makes sense to exclude it.

Buying new tires and balancing them can be done in a tire shop, no dealership needed?

You don't need to buy tires at the dealership, and in fact most people don't.

No, certainly you can go to Discount Tire and buy a set of bargain basement $400 20" tires for your $100,000 car.

The entry-level Tesla 3 was $35k, and most tire shops have better prices even on the fancy tires than the dealerships.

The entry level 3 hasn't been $35K for several years.

The entry level 3 with absolutely nothing on it is $47K before tax. In any case, this specific example was a high end Model S.

Unfortunately, manufacturers' interests are often not aligned with retail customers' interests.

For example, with Tesla, the company optimizes delivery numbers of cars sold by sacrificing quality control, and their service center model is anemic and almost an afterthought, especially when it comes to addressing the QC issues their customers experience.

For every Tesla with 400k miles on them with a few thousand dollars in maintenance costs, there are a dozen cars that are delivered to customers like this one[1] from today on r/TeslaLounge, with 17 blatant issues upon delivery that QC should have caught early on in the process. There are stories on that subreddit about customers having to wait months, without a loaner car, for service centers to fix their cars or to even get service centers on the phone about the status of their repairs and cars.

Dealerships act as an intermediary customer that can perform QC, repairs, customization, service, maintenance, reject deliveries etc that manufacturers choose to skimp out on.

[1] https://old.reddit.com/r/TeslaLounge/comments/v3jkn3/update_...

> the company optimizes delivery numbers of cars sold by sacrificing quality control

How do you know this? Did you see their internal data? There are lots of anecdotes going around about Tesla's quality. However, with all the TeslaQ it is hard to believe that there is real correlation between anecdotes and data. Here are my anecdotes - I owned 6 Teslas over last several years. Not one of them had any QC issues. I had one service done because I hit tire debris and front break dust shield started making noises. Tesla fixed that for me quickly with no charge. As for the data - during earnings calls they mentioned that they do pay close attention to their customer experience data and they had period of time where service was lagging. But they started addressing this issue and saw improvements. The way they are growing I do believe they need to keep close eye on customer experience, but looks like they understand that themselves and use data to make sure they are on top of this. Unfortunately there's not much reliable independent data to have better understanding of this issue.

Add: The intent of my comment was to ask if parent info is based on specific data or just anecdotes. As an example, I gave my own anecdotes and mentioned that they are not reliable correlation to the data. Somehow the responses I've got are all about anecdotes, mine or others, also some personal judgement of my ability to appreciate cars or judgment of my life circumstances that required me to have these many Teslas. Can we get back to discussing the main point I'm making - do we have data to make any of these judgements?

>I owned 6 Teslas over the last several years.

??????? Why on earth would you need this many Teslas? Maybe if you are buying so many teslas then it makes sense why you don't need them serviced - you barely give them enough time to wear themselves out!

If you buy the latest and greatest and continuously upgrade to the next greatest it’s not that expensive; often cheaper than leasing.

Maybe it's cheaper than leasing the latest and greatest, but not everyone has an unlimited pool of money all the time, and the assumption that this type of purchasing behavior is in any way typical or representative of anything is absurd and out of touch at best, and purposefully misleading for the benefit of Tesla at worst.

It looks like you knee-jerked pretty hard at that line, because they didn't say anything at all about their purchasing behavior being typical. They just said the QC was good on the cars they got.

And in general the issues I heard about were from-the-factory issues, so only having the cars for 1-2 years each wouldn't matter much.

Do you have data on that? I thought cars lose a lot of their value as soon as they drive off the lot.

And how long of leases are you talking about?

Finance companies have a good idea of what a car will be worth after you are done with it. That is why they limit miles: they know the loss of value from miles and don't want to know lose money. Their goal is when the lease ends and you turn the car in the dealer pays the entire remaining balance and sells it as a used car. Dealers make more money from selling used cars than new (everyone knows what they pay for cars and won't allow any profit, but for used you don't know what they really paid for it).

When you trade in your car the dealer will give you an offer for your car. Depending on demand this may be higher or lower than what the lease company wants. When it is higher you win. When it is lower leasing would be better. Either way though, the dealer is pricing in a profit margin from selling your car, so if you don't trade in your car but sell it yourself you can get this profit margin in exchange for your time.

In the end it is about risk management. What will the car be worth in 3 years when you are ready for a new one? Nobody knows for sure 3 years in advance. Sometimes it will be worth a lot more than the lease company expects and so you win, sometimes it will be worth less and so you lose. If you don't trade your car in you probably will always win in monetary terms, though I'm not sure if it is worth the time.

How does sales tax fit in? If you buy the car, you have to pay sales tax on the whole thing right? I don't think that happens on a lease. And when you sell it, that buyer has to pay sales tax too right? And if that buyer is a dealer, then the next real customer has to pay sales tax again right? So sales tax reduces the liquidity and efficiency of selling cars, with no negative effect on leasing. This gets worse and worse the shorter the period of time. skolos owned 6 Teslas in several years, so this would be a big factor.

If you live in a state with no sales tax, then you avoid this problem.

different in each state, but in general a lease is a sale for tax purposes. Check with a tax accountant in your state for details if you care.

I did the math before buying in 2021, and leasing didnt make any sense.

the reason is that tesla price increases and backlog creates added value for aftermarket teslas.

As it happens, I can sell the used car i purchased over a year ago for more than i originally paid.

Last two years used Tesla prices were higher than new ones. You need to wait up to a year to get new Tesla though. So you could actually make some money while driving newest versions of cars.

I guess it makes sense for cars that there's a shortage of but you're still able to get. In a normal market I don't think it makes sense.

Still, it probably would have been more profitable to keep driving just 1 Tesla, and sell the other Teslas as essentially new as soon as you got them.

Sorry there's just no way this is true. It doesn't even make sense. For this to be possible the loan payment would have to be less than the lease payment after depreciation. Even before depreciation this almost never happens without a huge down payment (which negates the point entirely).

>I owned 6 Teslas over the last several years.

Isn't this also terrible for the environment? The resources it takes to make one car is a lot.

I don't think the poster buys a Tesla, drives it for a few months, and sends it to a junkyard. I'm pretty sure that just because the other person stops owning it, the Tesla does not stop being useful to SOMEbody.

Well clearly I understand that but I would think the less new cars being produced the better. There are a lot of cars sitting in used car lots.

> Not one of them had any QC issues.

Same in my experience, though it's not as extensive as yours.

It's surprising how often you see negative anecdotes about quality control amplified as representative of a larger trend. It often seems there is an agenda compelling many to work so hard circulating negative opinions.

There is a much easier explanation: Disgruntled customers are always more vocal than happy ones.

On reddit, it seems the most persistent repeaters of negative Tesla stories work in the car industry, and have never owned a Tesla.

There are definitely some disgruntled customers, too.

Just because you don't notice issues don't mean there aren't issues. Tesla is widely regarded by "car people," both those who own them and those who don't, as having some of the worst fit and finish of any production car in the US. It's been that way since the Roadster. Here's a video review of the most expensive Tesla you can buy, by someone who rates cars professionally and rates it among the best he's ever driven, with paint flecks on the mirrors and other pretty egregious issues given the price point - https://www.youtube.com/watch?v=qen0ZlZM0ZA - and the video is less than a year old so it's unlikely given the long history of these and similar issues that they've made radical changes to their processes in the last 9 months or so.

Paint flecks on the mirror? I'm dying.

Sloppy and chipped paint is pretty crazy when you're paying $130k+ for a car.

I'm here to chime in on having very few QC issues on my model 3 despite having gotten it in 2018. Not sure where all the service nightmare stories come from, every time I have dealt with them they've fixed the issue.

yea i've had 2012 leaf for decade now, zero issues. i've had a tesla for over a year now, zero issues. From what i understand, if i do have an issue, i'll just have to push some buttons in the tesla app, and everything will be figured out for me.

I think a lot of the contrary voices are people scarred by ICE experiences and searching for comparable "gotcha boogeyman" to EV's to satisfy themselves with their current car situation, whatever it is.

Dealerships are rent seeking entities that exist purely due to laws that force consumers to deal with them and only them. They are not in either consumer or manufacturers interest.

This is an extreme absolutist position that seems immediately falsified by the detailed and nuanced post it is in reply to

If dealerships are so beloved by customers and so beneficial to them, why would they lobby so hard against customers doing business with manufacturers? They wouldn't need to if customers truly preferred them. Instead, Car salesman are despised even more than lawyers! Everything a dealer can do, a mechanic can do for cheaper. It's a ripoff and the law forces it to be a ripoff

Because customers don't know what value dealers provide. They think direct would be better because they only see the negatives of the current situation and not the positives.

Which is really true for pretty much everyone in this argument on both sides.

It's the lobbies that prop up the status quo because it has become very profitable, but it is easy to forget that the status quo exists in the first place as a series of compromises designed first and foremost for consumer protection against lemons.

I whole heartedly agreed on this point but have grown to see another side of the issue. I don’t want to over glamorize it but in the north east car dealers have done exceptionally well, and often were the wealthiest people in the towns they serviced. A dealership in Pennsylvania recounted to me how the founder of the dealership more or less built the town square and at one pointed owned more than half the town. Now this may seem negative but the founder is long dead and the dealership now employees a several dozen locals all making very strong salaries, all with minimal educational requirements (just a bachelors cause it’s in vogue).

Overall I guess the point I want to make is even thought it is rent seeking (many industries are) this one seems to provide for so many communities all across America. I find it hard to believe that ford will pass up the savings to the consumers. We all know that profits will be returned to shareholders.

This only convinces me dealerships should be gotten rid of. That's a lot of money sucked out of the car buying process. I'd rather pay less to a manufacturer than pay for a dealer to own a town in PA.

wow 17 borderline cosmetic opinions on a fully functional vehicle.

how dare they sell that vehicle.

Not to mention that when they bought it, Tesla gave the buyer the opportunity to reject it and have another specimen manufactured at no cost. they decided to keep it because it appears their vanity is literally only skin deep.

Those are issues that would be caught by any competent quality control process, and that particular example is just from the top of the r/TeslaLounge page from a few hours ago. At any point you can log into spaces for Tesla customers and find dozens of stories of just like that one, or worse, when it comes to quality control or service center service[1][2][3][4][5][6][7][8][9][10][11].

And you make a great point about the importance of rejecting deliveries, which is exactly what a dealership would have done upon inspection instead of forcing layman retail customers to do it free and to their detriment. We even have Tesla customers asking why other customers choose to take deliveries at the end of the fiscal quarter[12], because Tesla has a reputation of pushing out as many vehicles as they can in order to boost delivery numbers, even if that means delivering cars in poor condition. When quality and service is consistently that bad, you can't blame the customer for accepting a delivery of the car they spent tens to hundreds of thousands of dollars on.

Also, your comment goes against HN guidelines[13]:

> Be kind. Don't be snarky. Have curious conversation; don't cross-examine. Please don't fulminate. Please don't sneer, including at the rest of the community.

> Comments should get more thoughtful and substantive, not less, as a topic gets more divisive.

[1] https://old.reddit.com/r/TeslaLounge/comments/u9v1mo/off_my_...

[2] https://old.reddit.com/r/RealTesla/comments/rqie4g/gotta_lov...

[3] https://twitter.com/aprildawn78/status/1481450029462212616?s...

[4] https://old.reddit.com/r/RealTesla/comments/nurlbg/my_model_...

[5] https://old.reddit.com/r/RealTesla/comments/qzr5tx/how_is_th...

[6] https://teslamotorsclub.com/tmc/threads/comically-poor-deliv...

[7] https://teslamotorsclub.com/tmc/threads/my-first-model-3-exp...

[8] https://teslamotorsclub.com/tmc/threads/took-delivery-today-...

[9] https://old.reddit.com/r/TeslaLounge/comments/j59ovh/so_tesl...

[10] https://old.reddit.com/r/TeslaLounge/comments/smettt/terrify...

[11] https://old.reddit.com/r/TeslaLounge/comments/l0ownx/my_y_ha...

[12] https://old.reddit.com/r/RealTesla/comments/j59dp1/tesla_own...

[13] https://news.ycombinator.com/newsguidelines.html

it's also against guidelines to police comments in other comments...

This is my first time in 12 years on HN that mild sarcasm has been treated as confrontational. I hope you are okay.

Due to non-random sampling, anecdotes are not evidence when it comes to a phenomena at this scale. Even four randomly sampled entries are better than 100 posts of people complaining if the latter are more likely to appear in your feed than someone getting theirs with no issue.

You need an actually random sampling of delivered Teslas to determine how extensive QC issues are and whether the average one can go 400k km with only $3k servicing. Also, they defects reputed to vary substantially over time (e.g. one model year might have 5x the rate of two years later).

Is there really that much service revenue for modern ICE cars that isn't stuff BEV cars need too? Modern powertrains are pretty bulletproof, 10k oil changes and 30k air filters will get you to 100k miles. "Tune ups" aren't really a thing anymore either, especially in the first 100k.

Brakes? Maybe you're cutting out one or two pad slaps in that 100k.

Oil changes? Yeah, you've eliminated those, the lowest margin service dealers do.

Suspension components, air conditioning, etc? No difference, and that stuff shouldn't need to be touched in the first 100k anyway.

Tires? BEVs eat tires.

Still need wiper blades, cabin filters, etc. But those aren't big items either way.

I guess I just don't see where all this recurring service revenue comes from. Cars just don't break until they're 10-15 years old. Maybe some cars are really that unreliable still?

I own a fairly reliable ICE car from 2009 with ~100k miles, and I've had to get servicing for belts, water pump, brake pads, sway bars, oil changes, etc. I estimate I spent about $5k over the life the car on servicing.

That's excluding tires, wiper blades and air filter changes.

Owners of less reliable ICE cars probably spend more.

It doesn't sound that reliable if you've had to replace that much already with just 100k miles.

I have two vehicles over 100k, one closing in on 200k soon, and my maintenance on both is less than 5k.

Of course, the part no one talks about:

1. How will you do a family vacation beyond the EV range?

2. Who pays to replace the ~$15k battery and when?

> How will you do a family vacation beyond the EV range?

Stopping for a meal, bathroom, and stretch break every 300 miles or so?

> Who pays to replace the ~$15k battery and when?

I'd typically buy a new ICE car before the 400k kilometers cited, as repair costs accelerate, so this isn't really a significant difference.

I can do 900 miles in about 12 hours, at my max.

With a 300 mile range, I'd need at least 2 stops that are 4-6 hours, unless if I find a super rapid charger. That turns a sucky 12 hour day with 1-2 hours of stops into a 16 hour trip with probably 1-2 hours of additional stops still.

So now I need to power through or get a hotel.

Sure, if you rule out rapid chargers, the math looks worse, but that's a bit like complaining about the availability of gasoline in the early 1900s.

There's already a pretty extensive network of rapid chargers, and it's growing all the time.

Can I pull into any charger, pay whatever I need to, for 5-15 minutes and be on my way for another 300+ miles?

My understanding is that you were stuck with the charging network that each manufacturer is making.

Ah, one of those. Typically most people are happy to stop for 30-45 minutes every 300 miles of driving.

The only people I know who only stop to refuel and then carry on until they've basically driven 12 hours straight are just trying to flex, it's some masculine thing.

More and more vehicles are getting 100-150kW charging, which definitely pushes a full charge more into the 25-40 minutes range for 80kWh EVs.

I wonder if having smaller cars would help as well, American cars/"trucks" always seem so pointlessly oversized. If the number of single occupant trips in London in things like Minis makes me sad, then I don't even want to think about single occupant trips in F150s in America.

Wow. You did a fantastic job at attempting to change my mind.

Are you seriously resorting to a manphobic ad hominem attack at someone's masculinity for simply pointing out stopping for 4-6 hours every 4-6 hours of driving obviously doubles trip time, and would require those who are trying to save money on flying, but not wanting to waste a half-week driving to the beach or a vacation spot is obviously because that person is on some sort of bench pressing flex thing?

Perhaps you forget the US is 40x bigger than Great Britain, so obviously what works for the majority of those in Britain (e.g. 300 miles) may not cleanly translate to other countries. I'm not telling you to not get an EV. It might work perfectly for you. But as of yet, all those advocating for it and blaming the problems of the world on ICEs still hasn't addressed the basic concerns many people still have about EVs.

Tell me your a condescending narcissist without telling me your a condescending narcissist again.

Lmao >The only people I know This is quite obviously an anecdote, never did I refer to you.

We can only draw comparisons from our own experiences and the majority of people I know do not drive such long distances, the ones I do know make a point of stressing the fact that they do not stop whenever I have gone on a long journey with them.

I haven't forgotten the relative size of the US, but the same applies to any country of relative size. I guess it begs the question of _why_ you all drive so far. Does land mass correlate to miles driven? Is it because of an emphasis of road infrastructure over public transport/rail? Hmmm

> It doesn't sound that reliable if you've had to replace that much already with just 100k miles.

My observation is that it depends on the brand of the car. If it's a Toyota or Honda, or other well to do brand that people with credit scores reminiscent of FDA minimum cooking temperatures cannot afford it's the owner's fault that the timing belt snapped at exactly six miles more than the recommended change interval, they should have got it done proactively.

If it's a Nissan, GM or <clutches pearls> Chrysler then it's obviously the car's fault that it needs a fair number of suspension parts after spending 120k being fully sent over rural gravel roads with 300lb of tools in the trunk.

This pattern of double standards that absolves "things that should be nice" from blame when they fail to meet those expectations and blames more modest products even when their failures are reasonable can be seen across many classes of products, not just cars.

I've been using the vacation reasoning for a long time. I've just about convinced myself to get an EV and to rent an ICE for vacations. It keeps the mileage off my odometer that way, too.

I think it’s worth noting that mileage doesn’t necessarily correspond to maintenance expenses. It’s only a rough rule of thumb.

People like to talk about mileage because it’s an easy-to-measure stand in for the age of a car based on its usage. But over time they forget that like in humans, there’s a lot of variation at the same age.

There’s other factors like road conditions, cost of parts, cost of labor in different parts of the country, unexpected events like fender benders, etc. that the mileage number doesn’t capture.

The same 100k mile car driven in a leafy suburb where not much goes on is going to be different from a car with the same mileage driven under harsher conditions.

> The same 100k mile car driven in a leafy suburb where not much goes on is going to be different from a car with the same mileage driven under harsher conditions.

Scotty Killer on YouTube said something slightly different. He said highway miles are almost one tenth of city miles. Or in other words, stop and go traffic is ten times as bad as constant driving without traffic. At least for the engine and the transmission I guess.

They don't make their service revenue primarily from brand new cars, for the obvious reasons you've stated. It's when the timing chains, water pumps, head gaskets, piston rings, clutches, etc break, or the preventative maintenance to keep them from breaking (Audi timing chains, 10x $$$ if you don't replace them on schedule because of the interference engine), including the regular fluid flushes, battery replacements, air filters, etc. 80% margins on the little things add up :)

my car tells me to take it for service minimum once a year, for maintenance that's going to cost $500-$800 depending on the alternating schedule. 2-3 hours in the bay max. It's mostly visual, filters and fluids... material costs are small.

If there are problems, it'll be $170/hour plus parts...

A lot of people just do what the computer says and take it to the dealer. The workshop is always full... it has about 20 bays.

That's a lot of income for the dealership. If you drive a lot it'll be more than one a year...

I do as much maintenance as I can myself. If it's something I cannot manage (last year I had a split hose on the transmission radiator line) I take it to an independent shop.

Using my experience with a ICE Chevrolet from 20k-120k miles basically nothing big happened before 100k, especially nothing that wouldn't happen in an EV. One set of tires replaced, front brakes, and a couple tire alignments. I did transmission fluid and spark plugs at 100k, and had a catalytic converter replaced and a coolant leak after 100k. None of that went to a dealership though.

That’s true if your vehicle came from Japan or South Korea.

US big 3 or German cars are a maintenance nightmare.

I have owned F150's all my life, But a 3 year old off lease used one, drive it for 5-8 years, trade in for a 3 year old off lease used one

Other than normal fluid changes, I can count on 1 hand the number of repairs I have had to do on any of them.

Electric personal mobility devices are now more popular than mechanical bycicles and motorcycles.

Electric devices require significantly more servicing than mechanical ones. On the flip side, people seem content to treat electric devices like they're disposable and just buy a new one every year.

I don't think this dynamic won't hold for larger-sized EV's.

>Someone on Twitter recently posted their Model S turning over 400,000km with only $3k in maintenance costs.

Sounds like a Toyota

I mean, I'm all for the dealerships dying. They do nothing but waste peoples' time. We don't actually need them and the scripts that the salespeople and buyers effectively recite to each other like a Shakespeare play.

That's how it already works in Europe. Prices are set by the manufacturer and most cars are built to order. Dealerships rarely have their own branding, they basically work as franchises integrated with the manufacturer's network.

Their role is to collect orders, provide test rides and service the cars.

Commissions are 30-40% of an auto dealer's costs as a % of gross profit. If salespeople don't have to negotiate price, you can cut a lot of that cost and focus on higher margin (e.g., financing) and subscription products (e.g., parts & services) that deepen customer loyalty. The big groups will be better at making these investments (and the investments needed to sell/maintain EVs) and will continue to consolidate what remains a highly fragmented industry (i.e., the two largest dealer groups, AN and LAD were each only 1.75% of new car sales in 2021).

I wouldn't cry for nor count the dealers out just yet.

It's because Ford hates the dealer markup they've started charging in last couple of years.

This might be right, but I'm not so sure. Public perception is that dealerships are adverse to customers because of information asymmetry + price haggling, and that online sales will hurt them -- but in many conversations with multiple different car industry insiders, they all say that dealers make almost no money car sales, and instead make almost all of it on financing, service and parts. That you can almost model the car dealing parts of a dealership as lead gen for the service desk / finance desk.

I don't know if that's right (anybody with more info care to comment?), but it's at least enough to give me pause on the "dealers will hate nonnegotiable pricing" claim.

You are missing used car sales. Most people who buy a new car trade in their old car and the dealer makes a killing on that. (when the car is leased that almost always amounts to a trade in from the dealer's perspective, though once in a while the lease company will sell the car in some way other than the dealer).

You are correct that there is no real money in new car sales anymore.

Not having to worry about price negotiation is a massive plus in my books.

Previously I could never sweet talk dealers into the kind of deals some of my mates could.

The Tesla model is such an improvement.

Yes car subscriptions are coming and they look like this.

https://www.audiselect.com/audi-mobility/audi-select/com_en....

https://www.volvocars.com/us/care-by-volvo/

https://www.hyundai.com/in/en/mobility-solutions/hyundai-sub...

https://www.porsche.com/usa/accessoriesandservices/porschedr...

The dealership has to change anyway.

If banking and Everything else is a good example, people are getting used to buy online.

I bought even my current car without seeing it before.

I bought my bike online as well.

If more and more do that dealerships might loose too much revenue anyway to keep them afloat.

>>Target could have gone away, but they didn't. They bolted on an e-commerce platform and then they used their physical store to add groceries and return -- make returns really much easier than Amazon.

I know this is off-topic, but the easiest return I ever made was an amazon return. I went through the return process on amazon's website and was given a QR code which took a few mins. I drove to the nearest Kohls, walked to the amazon kiosk, showed the QR code to the employee, and handed over the return. Took all of 30 seconds in store.

Anyway, back on topic. A hybrid model makes sense for Ford to compete, and it is a lot like Best Buy/Target in many respects. However dealers have made a living for a long time being the middle-men, I wonder how they will deal with additional competition. Best buy has a problem where people look at the product at the store then end up buying online, I could see people taking test drives and then ordering from the Ford website. Although I think the dealer will arrange commission if that happens.

Re: bestbuy “showrooming” issues, I think they actually figured out how to make it a value driver for them, whereas it killed others. It’s a great place to look at products, and they price match so you can walk out the door with the product instead of waiting.

> ... and they price match so you can walk out the door with the product instead of waiting.

I would love to see the behind-the-scenes numbers crunched on that model. I don't see how that model works long-term unless the percentage of customers in the showroom walking out the door with online price-matched goods is a relatively small group, or they're successful up- and cross-selling on gonzo margin goods and services before and after they walk out the door, or their COGS is way better, or some other activity to make up their bigger overheads versus an e-commerce marketplace.

Can anyone offer any insight how BestBuy is long-term sustainable with the online price matching policy?

I've known people who work at Best Buy and they get their products substantially cheaper, just as the online retailers do. There is some level of bake in for storing it at the store... but not really much different from sitting in an amazon warehouse for instance, most best buys have large warehouses in the back you'd never be aware of. Many people aren't aware of the price matching nor take advantage of it, they also sometimes will "confirm" the price match, so you can't really fake them out. And you end up browsing whilst they do the price match + grab the product from the back.

Long term sustainable simply because they've already baked it in and it's less widely known amongst the typical consumer and its honestly kind of a hassle, people pay for convenience.

Best Butt is basically a group of warehouses across the country - order from them online and you may find your order shipped from random Beat Buy stores.

And for many of their products they all sell at MSRP anyway (apple laptops say) so they’re already matching Amazon et Al. And things like hdmi cables are some off brand and so they don’t price match anyway.

They have a pretty slick setup going, also jumped in on the appliances market just as Sears et Al disappeared.

Best butt, hehe.

There is there real value. When you need it now they are just across town. You have to be very rural to not have one within half an hour. Amazon has 2 hour delivery in large cities, but only some cities (though granted the exceptions are small population).

I think it's more that Amazon's prices have come up on the type of stuff that's sold in stores where they aren't the price leader anymore, if they ever were.

I've bought more from Best Buy in the past few years than I have in the decade before because they are often the cheapest option, including Amazon. They also offer same-day courier service on some things I've ordered.

Another thing to consider beyond raw COGS is "attach rate": online price matching gets you in the door and buying the big ticket items, but once you are in the door how likely are you to also pick up accessories (especially if you are saving on the base item) or even unrelated things that you saw in the store while you were there?

BestBuy sells TVs so they can sell you overpriced cables while you're there.

> I know this is off-topic, but the easiest return I ever made was an amazon return

Well sure. That’s because they have enough money to just toss whatever you returned in a landfill.

You got your money back, and we all pay in environmental damage.

Frankly I don't think you're very good at reading executives' words: you have to read through the lines and notice what they're not saying.

Nowhere in that does he say outright where dealers fit into an online, fixed price world. He only makes super vague statements like "dealers will be more specialized."

Reads to me like Jim isn't planning on dealers being around in the future but he's being vague enough to try not pissing the dealers off in the near-term.

My interpretation is informed by the knowledge that what he’s saying is not legal in most of the United States. It’s understood that dealers cut into Ford’s profit margin, but Ford is not at liberty to change the laws in numerous states.

Ford is however at the liberty to lobby for laws to change, and to simply stop selling (electric) vehicles where the laws don't allow for direct sales - like Tesla did.

Tesla has pretty convincingly demonstrated that it's possible to run a car company in the US without paying off the dealerships. It's only going to be easier for the second mover here to also stop.

Tesla had a big advantage because they never had dealers. Many states have laws banning online sales once dealerships are established.

I wonder if maybe they're preparing to fully spin off the EV models into its own corporation for this exact reason: https://chargedevs.com/newswire/ford-to-spin-off-its-evs-int...

Does the law apply to a business unit? I’d expect it to require a new company.

It would. I'm saying they might have split the company into separate units in order to make it easier to spin off a new corporation.

I’m not familiar with laws pertaining to the dealership. Why can’t Ford sell EVs the same way Tesla do? In the same states. They still sell ICEs via the dealers after all. Nothing changes

I’ve not seen the actual text of such a law, but I suspect the lawyers have and are working on how to get around them (or force a net neutrality swell of support to remove them, perhaps at a federal level utilizing the commerce clause).

I honestly felt that this is where Sears dropped the ball. If any company should have had the "DNA" to compete with Amazon, it should have been Sears. Which basically owned the catalog/mail order space before the internet.

They could have leveraged their large stores to be showrooms / distribution hubs (that they mostly already owned, which is why the private equity people were so interested in them, due to their real estate holdings). You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up. Their logistics pricing should be cheaper than what amazon could have done (as they are skipping last mile), and for many consumers it wouldn't have made much of a difference (the sears that was local to me growing up was in the same general shopping center as the groccery store we generally went to, so we were regularly there).

Of course they did try to do "in store pickup", but this was when they were dying already and the experience was pretty terrible (i still used it a bunch back in the day as at one point they were basically paying us to shop at sears via the amount of free shop your way points they were giving out).

> You visit a sears, you see what you want, you order it and in a couple of days you come back to pick it up.

Why would anyone want that? If I’m going to go so much as 15 minutes out of my way, I expect to leave with the item in my hand that day. That’s the killer advantage for brick and mortar retail.

I don’t even want to go to the store the first time, but I sure as hell don’t want to go twice if Amazon offers the same overall latency with zero trips to the store.

Sears made several attempts at online shopping over the years, none worked out. They finally gave up and it and catalog orders the year before the web took off. Hindsight is 20/20, but at the time it looked like one more attempt at online ordering would just be throwing good money after bad.

Sears had the DNA and definitely were the Amazon of the previous century, but they didn't have the fight left in them. By the time Amazon showed up they were already being chewed apart by vultures for being fat, old, and complacent. There was already an LBO or three from private equity firms on their books and then the bad merger with K-Mart all with the intent of breaking Sears apart for pieces/scraps/brands anyway. Sears was already a walking corpse when Amazon came to fight.

I feel like the wilder "DNA fight" that wasn't was "80's Sears/Amazon wannabe": Service Merchandise. They tried to recreate the Sears formula for the late 1980s/early 1990s and basically convergently evolved the Ikea model before Ikea grew any US presence as just big warehouses with smaller showrooms up front. They made a bunch of silly mistakes in the 90s trying to grow beyond their roots in primarily the US South region to more national regard/footprint, but if they hadn't made those mistakes they probably could have been a real interesting contender against Amazon.

> This article takes an off-the-cuff comment from the CEO of Ford and reads too much into it IMO.

How does it ‘read too much into it’? He literally says they need to go to a 100% online order, no inventory, no negotiation sales model. That’s a HUGE a change from today.

I just think it’s an off-the-cuff comment and he probably didn’t mean it. He’s not announcing a new change in the way they do business. My read is that he’s generally saying he wants Ford to be more like Tesla. It’s not clear if any of his suggestions are even legal, given the laws in most states against direct sales (in some states there are special exemptions just for Tesla).

I don't think CEOs of public companies are allowed to say things that they don't mean, seems like the SEC would be up their butt about that that. His suggestions are perfectly legal if executed in a legal way, which they have started to do with Ford Blue split.

Nothing in that (at least the part you quote - I didn't read/hear the entire comment) says you can't have dealers.

John Deere (the company I work for) works this way: everything is just in time, if you want a new tractor you order it and get it 3-12 months later. You still have to order from a dealer. Dealers do not keep new tractors on the lot, except for demo units and service loaners.

I'm not sure how this will work for Ford though. Deere is selling to businesses, a new tractor is a financial decision talked over with the accountant, and are bought/traded in based on tax deductions (the date you place the order counts for ta purposes not the day you take delivery). Cars seem like more of an impulse purchase and so people want to go to the dealer and drive a new car off the lot. Dealers (and Ford) doesn't want to risk someone buying a car and then changing their mind, which is a lot more likely to happen if you don't have the car yet. Even for Deere, dealers normally keep new small tractors on the lot.

Dealerships should go away though. They’re corrupt institutions that prey on the uniformed. New cars can be bought configured from the factory and delivered to one’s door. The dealership then only serves as a way to service the vehicle.

For used car purchases that’s a different story I guess. Maybe dealerships only exist to service cars and sell used ones.

Shrug.

Even if this is the case, rather than direct-to-consumer, this would STILL be a tremendous improvement in the car sales model and I definitely look forward to it!

That's not in support of traditional dealerships, that's a direct attack on their business model while simultaneously taking advantage of them. Sounds like Ford wants to turn dealerships into physical retail stores, like a Walmart for cars, which I imagine no dealership is too fond about doing.

Speaking of Target they’re getting sneaky - the online for pickup or delivery price is often higher than the same item instore.

Once I saw that I got a bit sad.

In my experience it’s usually the opposite and I have to ask for a price match to the online price.

It is their policy in the contiguous US to price match target.com to Target Store and Target Store to target.com. The policy doesn’t cover Target Store to other Target Store.

not target, but the “contiguous US” part reminded me of the time where at a Hawaii Walmart they refused to price match walmart.com. so I just ordered online right then and there and chose to pick up in the same store. I watched the same staff picking up the same item from the shelf and called me to the online pick up area…

I’ve had employees tell me to do exactly that because an online order counts as good toward the store’s metrics (or at least not bad) but a price match counts against them.

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