Will Tesla Forfeit Its Direct Sales Model?

He points to BMW's success selling electric cars. "They look to sell 65,000 [electric] cars this year. Tesla hasn't sold that many since they went into business." The difference, he says, has everything to do with BMW's independent dealer network. If Tesla were to follow BMW's example, he says, "Tesla could achieve their full potential as a car maker."

Ohio dealers fight Tesla over sales model

Asked if the members of his association want to sell Teslas, Appleton answers: "Absolutely. I've heard from lots who would take it on tomorrow. They want to sell what people want to buy."

Nerad thinks that Tesla, in states where it is prohibited from selling direct, "might identify a top-notch dealer or two, and sell through them—if they could offer the same customer experience as a Tesla-owned store. I would be so bold to suggest that if they were to do that, they might find it a better solution than selling direct."

Why might that be? "Independent dealers contribute a great deal. They invest in plant and equipment, in advertising and in training. The manufacturer gets a multiplier effect, because of the value the dealers contribute. Plus, the dealer is the best expert on the local market and in how to sell a car. That's their unsung value."

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