Hacker News Reader

Comment by pedrocr | Hacker News Reader

>The irony is that once (if) Tesla starts selling cars in significant volume their purely direct/internet/word of mouth model will break down and they'll probably find themselves....... establishing dealerships!

How come? In my experience dealerships provide a horrible experience, where you're always thinking "how am I being ripped off here?". What value do they provide that is suddenly required once you reach scale?

View on HN

Short answer: Think "the Apple Store" of car dealerships. Long answer: I don't think the mass market is in Tesla's future anymore. They're too late. There are too many competitive new entry level entrants from Honda, Nissan, Ford etc. I don't think Musk cares. He strikes me as a guy with a mission - to get us off fossil fuels - and he's doing that. I think his deal to supply the motor industry shows you where Tesla will be. Kind of like an "Intel Inside" strategy (total wild guess)

> There are too many competitive new entry level entrants from Honda, Nissan, Ford etc.

I completely lost you there. Where are these competitive new entry level models?

e.g.: The Nissan Leaf absolutely does not compare with the Model S in range, speed, style, ecosystem, internals, etc, etc.

There really is no EV competition for Tesla. There is competition from non-EV luxury vehicles, but Tesla is beating most of them in price/performance and customer satisfaction.

Of course the Leaf doesn't begin to stack up to the Model S in those ways. The Leaf is $35k; the base Model S starts at $70k. It is literally twice as expensive.

Would you be impressed if I told you all the ways a BMW 7-series was superior to a Corolla?

Besides, your parent said:

... entry level entrants ...

I would argue that the Leaf is far, far, FAR more of an entry level electric car than a Tesla. Silicon Valley sometimes makes us think otherwise, but most of the USA isn't full of people who can easily afford a $70k+ vehicle.

Musk has always stated the end goal is a $30k car for the masses. He wants to disrupt the entire auto industry not the S or 7 series market. It's that mass market window though that I think is closing. But I suspect if it closes he's OK as he met his goal. And Telsa may provide some or all that key tech and still flourish.

How is the Apple Store an analogy to Tesla establishing dealerships? As far as I know, Apple Stores are owned and operated directly by Apple and are thus direct sales, while dealerships are third-parties/franchisees that buy from the manufacturer and re-sell to the consumer.

You're super literal. Imagine completely re-designing the car dealership experience so that it becomes a positive to the buying experience vs a negative. Secondly, who said the dealership has to be a franchise? Lastly, franchise's (even if you did that) have to follow some pretty strict guidelines. So you could drive the process hard.

The important distinction here is that dealerships don't constitute direct sales since they are not owned nor operated by the manufacturer. The question @pedrocr posed was why would it be necessary for Tesla to begin working with third-party dealerships at scale - they could still continue building their own showroom floors and continuing direct sales through their own channels. If they continued their direct sales process, it would not be ironic, as you claim, since they'll still be circumventing the dealership middleman.

Note: This has nothing to do with good/bad experiences. That's not what defines a dealership.

That's a non-sequitur to the debate about whether car companies should be forced to sell through third-party dealerships. Tesla already has dozens of showrooms across the country, and yes, they are Apple-Store-esque.

Reply on news.ycombinator.com