By on May 1, 2014

img-0226

To buy a car, you usually go to a dealership. You wait to see if someone is available. You wait a little more. That person comes to you. You look over the options, they attempt to sell you something else. You eventually settle upon something (or, of course, you leave and go somewhere else). Once you do that, if you don’t have the cash, you go to their finance person, run credit checks, talk about your options, and eventually come to a deal. You put down money. You get sold on services (tires, service plans, warranties, etc.). You sign many, many documents. You get sold on more services. You – after hours of waiting – get to see your car (assuming it’s actually available – otherwise you’ve just made a deal and will wait a few days to a few weeks). You’ll be rushed through a product demo. Anywhere from two to eight hours after arriving, you get in your car and leave.

With Tesla, most if not all of this takes place online. You order the car, and depending on the options it’ll take 2-3 weeks, unless you buy the 85KWh Performance mode, which can arrive in 1-2 months. I ordered the P85, and received it just over a month later. You choose all of your options online, everything from battery size to whether you want leather seats, and then put down $2500 to ‘reserve’ it. You get a few weeks to pull out before the deposit becomes firm, and the car starts being made.

From there, you can apply for financing online – and if you don’t work with Tesla because of your credit, they will find you a bank that will. Everything is done digitally – down to the signing of the car purchase agreement – and the services are offered up front. You can call and ask really, really stupid questions, like “what is a caliper” and “what’s a power liftgate” and “what is suspension” (I asked all of these questions). They don’t even laugh at you. But feel free to laugh at me.

In essence it’s not too dissimilar to buying things off of Amazon, except it’s a very expensive car.

An important side-note – I highly recommend the P85 option. It’s $10k more for 65 more miles of range, Supercharger capabilities and yes, 0-60 mph in 4.2 seconds. I may not be a “car guy”, but I like making bad decisions. Constant full-throttle sprints up to 60 mph is one of life’s great pleasures.

When my delivery day came around, I went to Fremont to pick it up. The ‘delivery specialist’ was waiting for me. He handed me two pieces of paper. I signed them. I was walked to an iMac. I hit “accept delivery” on Teslamotors.com. “Okay, great. The car’s over here.” The car that had been sitting there the entire time that I assumed was a store model was actually mine.

When I originally ordered my Model S, the ‘multi-coat red’ looked kind of burgundy. Sort of stylish and reserved. My Model S was…a cherry red. What I imagined was going to be my sleek electric car was a big red sports car. What was I gonna do, ask them to go paint it a new color? I was stuck with it. It’s not so bad, aside from every person telling me how “cops pull over red cars”.

The delivery guy walked me through the car’s operation, helped me set up my phone and answered my incessantly stupid questions. At the end of it all, more Tesla employees were there to wave goodbye. One shook my hand vigorously and said “congratulations.” Everyone was so happy. I’m in PR and can spot a fake smile from space. These guys seemed to really like the idea of getting up and going to work every single day. When you’ve just made a major purchase, it helps to make the person feel like they’ve made the right decision.

When I bought my Volvo, they sort of grunted at me and handed the keys over while one guy cackled like a pawn shop broker.

Get the latest TTAC e-Newsletter!

202 Comments on “TTAC Long-Term Tesla Part 2: Buying Direct From The Factory...”


  • avatar
    Ubermensch

    It is positive experiences like this that terrify the existing, state law protected auto dealers. Without their hegemony protected by ridiculous franchise laws that prevent manufactures from selling direct to the public they know customers would reject their slimy business practices faster than they can 4 square the mentally handicapped into a $66k Mazda 6.

    • 0 avatar
      Felix Hoenikker

      Perfect!

    • 0 avatar
      vcficus

      But then who will sponsor the local softball league?

    • 0 avatar
      photog02

      I would love to see some polls about how many Americans would love to see the dealer model go away, even if it meant getting rid of MSRP vs. actual price deals (and having to wait for rebates or the car to otherwise go “on sale”).

      If you need a laugh, here is what someone who promotes the dealer model is saying:
      http://www.autonews.com/article/20140331/RETAIL07/303319985/teslas-wasting-time-energy-money

    • 0 avatar
      TrailerTrash

      I do not understand your point…other than you were not bright enough to do your online searched for other cars.
      I do.I go to the dealers AFTER my research and review readings. I go knowing as much as I can before I test driving to get my own opinions on the cars.
      If you do not do this…then it is your own failure.
      And really…are you suggesting consumers purchase these very high Amazon like purchases without the test drives? That seems even dumber.
      Without a supported dealer network available to you…you cannot do this.
      And asking for an exception here for Tesla makes the entire car world unfair…and better for a limited few. MOST consumers need a multi dealer network to shop…and allowing for these dealers to be put at a disadvantage is nearsighted
      And I do understand the reasoning behind the dealer deals as brick n mortar businesses. Things do need to be fair.

      And…as far as myself…I do consider strongly the availability of dealers in case my car is in need of repairs or warranty coverage. It is nutty to drive even 1 hour for a warranty fix. I turned away the Subaru Forester for this very reason. It was a minimum 1.25 hours away…in good traffic.
      That is nuts.

      Next…the point I need to argue is the law. IF the laws were developed to make things fair(er) in the auto sales department…allowing any exceptions would mean everything before it was wrong.
      Is it fair that Illinois and MO do not allow dealers to sell cars on Sunday? Not to me…this is an important looking day for me due to work and family.
      But they still do it.
      Is it fair for any individual dealer in these states to be forced to close up on Sundays because the state so ordered?

      • 0 avatar
        FreedMike

        @TrailerTrash

        Tesla does have local retail outlets where you can drive the cars. Or you can choose to buy it without any seat time…which you can also do with the traditional “model,” last I checked.

      • 0 avatar
        Ubermensch

        @TrailerTrash,
        Are you responding to me? If so I think you are totally confused on my point. I never once suggested that customers not do test drives or research cars before heading to the dealership. My point is that a manufacture run sales center would be able to offer test drives and have sales associates to answer questions without the shady business practices common to independent resellers.

        • 0 avatar
          FreedMike

          @Ubermensch

          Exactly. +1

        • 0 avatar
          TrailerTrash

          Well…no kidding. And most do. The painting of dealers with such a nasty point is just wrong.
          Lexus was famous for the way its dealers papmpered the customers. There are many more.
          And I was trying to state this…and that allowing Tesla their business plan puts others at a dissatvantage.
          The entire made up event was written to make ALL dealer experience the same.
          And it is not.
          And Tesla’s attempt at surgically carving out an exception to laws and business plans now used, by law, by others will give it an advantage…and this is what I feel is wrong.
          So…why the slant?

          • 0 avatar
            Vulpine

            @TrailerTrash: if you’re not going to reply specifically to a comment with your argument, please address the reply to the intended recipient. Meanwhile, I wish to reply to part of your rebuttal:

            “And Tesla’s attempt at surgically carving out an exception to laws and business plans now used, by law, by others will give it an advantage…and this is what I feel is wrong.”
            Why? What is wrong about a company trying to sell if it’s not part of the typical dealership network? There is no law in place that says an auto company MUST use franchised dealerships, only that it cannot do so in competition with dealerships selling the same brand. NADA and specific dealerships are trying to get that law changed now–with some, but not universal success.

            There is no reason Tesla cannot sell cars the way it is, but any other existing brand would have to go through expensive litigation to even make the attempt at revoking the existing law.

            Sure, some brands never before seen here in the States might be able to make the attempt, but for them the existing system is the cheapest and easiest route–though potentially the more risky route if said dealership is owned by a network that doesn’t want that brand to succeed. You can see what happened to Mahindra when they tried to enter the US market with their smaller, stouter and more economical pickup truck.

        • 0 avatar
          TrailerTrash

          I tried to reply to your point earlier…but it seems it did not get posted.
          First…I tried to show your broad painting of the dealership experience was slanted and not even close to reality. Lexus and many other companies pride themselves on treatment.
          And the fact still stands Tesla’s demand to surgically make exceptions to laws now followed by dealers would place them at a disadvantage price wise.
          This is wrong.
          All my other points…?

          a good read: http://www.cnn.com/2014/03/18/opinion/odell-tesla-new-jersey/

          • 0 avatar
            Vulpine

            No, TT, NOT a good read. That says the exact same thing most of the other articles opposed to Tesla’s sales paradigm say–and miss on the exact same points; that for now it is cheaper for both Tesla AND the customer to work the way they are. Franchised dealerships add cost to the manufacturer with absolutely NO benefit simply BECAUSE Tesla’s output and customer base are so low. And I can imagine that even when Tesla does go the dealership route–which I don’t expect for at least 3 more years–they are going to have some very, VERY tight rules in that contract to ensure that the customer is the primary market, not the dealership.

            Here’s the thing: most dealerships make their big money off of service, not sales. The Tesla is a car designed not to need service unless it is a catastrophic failure–if it can be driven in, then it doesn’t really need the kind of service a dealership provides. Any traditional dealership would go broke under those circumstances and it may be that it will take a ‘lab-rat’ dealership to prove it.

      • 0 avatar
        Buzz Killington

        I think your concern is the availability of retail outlets, not the ownership of those outlets. Why is it important that the retail outlet be owned by a third party?

        You don’t seem to be familiar with the basis behind the dealer-protection laws. They were put in place to protect the dealer from competition from the manufacturer of the cars the dealer sold. For example, the law protected Jim Smith Ford against competition from Ford, not from Chevy. The BMW dealer needs protection against BMW, not Tesla.

        If the “dealer network” is an important market advantage (and I have no doubt some people feel the same way you do), the market will reflect that and Tesla will need to develop a “dealer network” in order to complete.

        • 0 avatar
          TrailerTrash

          Not exactly. There was a financial benefit to having the dealer network as well…for both the manufacturer AND the dealers.
          read my post link above.

      • 0 avatar
        Vulpine

        On speaking of test-driving cars, “Without a supported dealer network available to you…you cannot do this,” is blatantly false. You can do so and Tesla IS doing so at most of its display locations–even when they’re not allowed to actually ‘sell’ the car in that state. All you need is a demonstration model available to let the buyer drive.

        • 0 avatar
          danio3834

          It works if you have a single model with only a few options, and are a boutique brand. This is how companies like Bentley do business with their customers.

          Mass market brands can’t have a single model for everyone to test drive then order and wait. The average car buyer has come to expect to sign and drive the exact model they want that day.

          If Tesla wants to reach mass market customers as they say they do, they’ll have to adjust their sales approach.

          • 0 avatar
            Nicholas Weaver

            Actually, you could get close.

            Lets take Honda:

            The Accord has 2 bodystyles (coupe and sedan), and 4 drivetrain options (Hybrid, 4-banger auto, v6 auto, v6 manual).

            So you have a hybrid sedan, a V6 sedan, a i4 coupe, and a v6 coupe, and you pretty much cover the entire range for test-drive purposes.

            Similary, the Civic you have 2 bodystyles (coupe & sedan) and 4 drivetrains (Hybrid, base auto, base manual, hp manual). So again, 4 cars cover the whole range.

            Yes, its more than tesla’s one, but its not some massive unworkable number of cars.

          • 0 avatar
            Vulpine

            Musk has already said they will adjust their sales approach–WHEN they hit mass market. But don’t expect the typical franchised dealership.

      • 0 avatar
        redav

        Tesla is not permitted to sell cars in my state (TX). However, I have test driven a Model S. They are not permitted to have dealerships. However, they have a service center to handle maintenance & other issues.

        As has been demonstrated, there are ways to work around the roadblocks. It seems silly to keep the laws in place that cause all these things to be disjointed.

  • avatar
    xtoyota

    I’m glad he is happy with that kind of purchase…..BUT he paid full price.
    What fun is that :=)

    • 0 avatar
      Vulpine

      What fun? Look at all the time he saved! Order online, go down to pick it up; no hassles. SWEET! And if you can’t get to Fremont, CA to pick it up, they’ll deliver it to your door. Even sweeter! I can tell you I want one badly, but not so badly that I’m willing to take on an $800 or higher monthly car payment.

      • 0 avatar
        VenomV12

        Time saved, really? It does not take that much time to buy a car and people making the process out to be harder than it is. When I bought my first S Class, the process literally took very little time. I called the dealership, negotiated the price I wanted, we agreed, I got a bank check, drove there with a buddy, paid for the car, signed the papers and was gone in less than a half hour. If you can’t take a few hours out of your day for the second largest purchase you make in your life then God help you.

        Any car dealer will deliver the car to your door or office if you want, especially if you pay full price.

        • 0 avatar
          mcs

          >> Any car dealer will deliver the car to your door or office if you want, especially if you pay full price.

          The Tesla MSRP excludes the dealer’s cut. If you call a car dealer and ask them for the price with their profit stripped out to make it the equivilent of the Tesla MSRP, I don’t think they’ll deliver it.

          • 0 avatar
            CJinSD

            Nobody pays full price for a Tesla anyway. Every one of them carries tens of thousands of dollars in subsidies paid for by people that make less than half what a Tesla buyer does.

          • 0 avatar
            psarhjinian

            “Nobody pays full price for a Tesla anyway. Every one of them carries tens of thousands of dollars in subsidies paid for by people that make less than half what a Tesla buyer does.”

            So, like just about every other car where the manufacturer has been wooed by tax subsidies, and, well, like oil?

            Careful about criticizing subsidies for products you don’t like. To paraphrase Matthew 7:5 “first take the log out of your own eye, and then you will see clearly to take the speck out of your brother’s”

          • 0 avatar
            Vulpine

            @DJinSD: Please show us where the Tesla “carries tens of thousands of dollars in subsidies.” While I know of a few thousand, it’s notably less than “tens of thousands of dollars.”

          • 0 avatar
            darkwing

            I think he’s including state subsidies in that. In California, I think it’s an additional $2500 tax credit; in Illinois, up to $4000; plus subsidies, credits, etc. for ancillary stuff like chargers.

          • 0 avatar
            CJinSD

            Tesla was issued up to seven zero emissions credits per car they produced through 2013. This year, it is down to four credits per car. The credits are sold to other automakers for thousands of dollars a piece, thereby bringing the total subsidy from people not buying a Tesla for each car sold is in the 10s of thousands when combined with other crony deals set up for Musk. Although it is harder to find the dollar value per car, Tesla ALSO made more money selling CAFE credits than they did producing anything people knew they were buying. All these costs are sent to people with normal budgets and tastes in cars through higher prices for wealth transfer to Obama’s fascist cronies.

          • 0 avatar

            Actually the way I understand it Tesla has high profits because they do include the dealer markup they just keep it for them self.

          • 0 avatar
            Vulpine

            @CJinSD: Those ‘credits’ do nothing but allow the other automakers to continue making gas hogs–they have little to no cash value on the showroom floor.

          • 0 avatar
            Vulpine

            @Mopar: Tesla, as yet, doesn’t make high profits simply because they’re still building infrastructure. They may earn more than it costs PER VEHICLE right now, but they’re putting it all back into the business–as you should with ANY startup business.

          • 0 avatar

            Vulpine,

            I believe you are correct about the flow of money but I recall reading a quote from Musk a while back that one of the reasons to avoid dealers was to keep more profit for them self. My real point was that the direct model tends to make a manf more profit per vehicle rather than saving the consumer money.

          • 0 avatar
            Vulpine

            Perhaps, Mopar–but then, the dealerships really aren’t helping the customer and are sapping profits away from the manufacturers on average. Since Tesla simply doesn’t need the massive service infrastructure that the dealerships collectively supply, Tesla could conceivably sell for less and still make more profit than their OEM competition.

          • 0 avatar
            CJinSD

            Vulpine
            May 1st, 2014 at 10:44 pm

            @CJinSD: Those ‘credits’ do nothing but allow the other automakers to continue making gas hogs–they have little to no cash value on the showroom floor.

            All those credits are is a way of taking money from people that produce desirable cars and their customers and giving it to people that produce cars that nobody will pay the full cost of. Maybe people would pay 30% more for a Tesla than they are, but at the moment the people picking up the slack are other car companies’ customers. It doesn’t seem like you understand what is happening. It almost sounds like you think the fascist economic planners are a force of nature and somehow these payments are necessary.

          • 0 avatar
            Vulpine

            @CJinSD:
            “Maybe people would pay 30% more for a Tesla than they are, but at the moment the people picking up the slack are other car companies’ customers.”

            Where did you get this 30% figure, if I may ask. I’d like to know more about it.

          • 0 avatar
            CJinSD

            Arithmetic Vulpine, and a bit of an estimate. The Zero Emission credit piece is between 16 and 35K per car. Then there are the tax breaks for buyers, between $7,500 and $11K per car. Then there are the CAFE credits created, which totaled about 70 million last year, suggesting around $6,000 per vehicle. That means that in 2013, the only year I have totals for, the average subsidy for a Tesla purchase was at least $28K and at most $52K. 30% is a reasonable approximation. If people were paying for their own cars, I’d be all for it.

          • 0 avatar
            Pch101

            Arithmetic is good, but that doesn’t make 2+2 equal 46.

            The federal and California state buyers credits are obviously subsidies. No argument there.

            CAFE credits are a different matter altogether. CAFE credits exist so that some automakers can be free to make gas guzzlers; instead of banning those vehicles or having government agencies impose fines, automakers can use the credits to buy their way out of it, which provides an incentive to other automakers to build cars that produce credits that can be sold.

            The CAFE credit isn’t a subsidy to Tesla, that’s the market determining the cost of compliance. If it wasn’t for the heavy fuel users, those credits wouldn’t be worth anything.

        • 0 avatar

          My mom shopped for cars like that as early as the ’70s

      • 0 avatar
        FormerFF

        If you want to pay full sticker and have no trade, I’m pretty sure any dealer will get you out the door in any car they have in stock in under an hour. Where the time comes in is getting your trade appraised and negotiating.

        Between the two of us, I buy one car on the average of every five years. Once we’ve settled on a car it’s never taken more than three hours total to complete the deal. I’m not seeing that it’s much of a time suck.

        • 0 avatar
          Pch101

          I would expect a dealer to try to get a willing full-sticker buyer to pay even more. They respond to naivete and niceness in the way that sharks respond to blood in the water — they aren’t compassionate, just hungry. The dealer’s job is to get every customer to pay as much as the customer will stomach, not to stop at MSRP.

        • 0 avatar
          Stovebolt

          Nope. Took me several hours of waiting, paperwork, credit reports, and avoiding rip off “extras” to pay cash for a car that was sitting on the lot at the local Honda dealer. I won’t go back there, but others obviously do to judge from their fancy new building and huge stock. It’s a strange business where high prices and arm twisting sales lead to success. The Toyota dealer here is infamous (advertised car “not available”, used car prices several $k over market, serious flaws that appear after sale, etc.). I still see their “Doin’ it right” slogan on many cars. “Doin’ you” would be more accurate.

          I’ll take the Tesla experience anytime.

    • 0 avatar
      FreedMike

      Honestly, if I were satisfied I was getting the best deal possible at sticker, I’d pay full price every time. The negotiation process for cars is unbelievably stupid, and time consuming. Of course, there’s a reason for that – it’s meant to involve the buyer emotionally in the purchase.

      • 0 avatar
        imag

        Unless the car is a high demand model, you can email pretty much any dealer and sign a deal for MSRP. They will fall over themselves to give it to you, and probably thank you profusely as you leave.

        • 0 avatar
          Nicholas Weaver

          Having bought two cars with mass email to the local dealers of “here’s the specs, I can wait, OTD price”, and having most dealers not respond at ALL, it actually is quite frustrating to buy a car that way.

          Tesla is like Saturn was in that respect: “We don’t f— with you” is a very valuable property to have, especially when all the others are the opposite.

          Saturn tried to do it by creating a new dealer network (and was killed not because of this, but because the dealers went back to their old bad ways and Saturn was not given competitive with Japanese cars after the S series started languishing around 97 and was killed with the Ion…). But the buying experience of “don’t F-with you” actually is a big deal.

          When a car maker is not “MSRP”, but, well, The Actual Gorram Price, the purchase attitude really is different

          In fact, that “MSRP is just a recommendation” is one of the insanely frustrating things about car buying. I’d have no objection to “AGRP”, if it was priced fair from the start, and I get the car I’d want.

          Its that it is NOT, but rather some inflated value designed to then have $2k-7k worth of “deal” tacked onto the hood to bring it down, and all sorts of crap nuisance charges to bring it up (and don’t get me started on dealer installed “options” and “hey, pay us more” stickers), that produces massive frustration in car buyers.

          Especially for those who are NOT comfortable being bastards, haggling, and playing hardball, the Tesla model of “spec the car you want, here is the price, here is your car” is a big deal good thing.

          • 0 avatar
            Vulpine

            Hear, Hear!

          • 0 avatar
            mmdpg

            I shopped for a Saturn in the early 90’s. I thought the no negotiation price was a good idea, until I saw the sticker next to the manufacturers window sticker with the dealer added pin striping, paint sealant, undercoating, and seat protectant for an extra $1,000, all non-negotiable because “we don’t negotiate on price at Saturn”

          • 0 avatar
            VenomV12

            Once again, there is no haggling with Tesla because you are paying full price plus. I can call a GMC dealer right now, tell them I want a new Yukon and I will give them full price and the deal will be done in 5 mins. I just don’t understand why that is such a hard concept for Tesla lemmings to understand? Musk did not reinvent the wheel, he just took away your options.

          • 0 avatar
            Vulpine

            @mmdpg: Hmph. You could have simply said you don’t want all of that. I ordered a brand-new 2002 Saturn Vue from the dealership and was given the option of taking all those add-ons… and refused them as unnecessary. They didn’t quibble.

          • 0 avatar
            Vulpine

            @VenomV12: Actually, Tesla gives us an option that most dealers don’t–CHOICE. When you order from Tesla you get what you ordered, no more–no less. The dealership doesn’t give you that option when you buy off the lot because they’ve CHOSEN to add often unnecessary options at usually 100% markup or higher (do YOU know how much that undercoating costs in material and labor?). Most cars on the showroom floor today carry between $1,000-$2,000 in frequently unwanted ‘dealer options’. Sure, SOME dealers might waive that added price, but most refuse, making the argument that it’s already on the car and they can’t take it off.

          • 0 avatar
            Nicholas Weaver

            Venom: Its because that GMC is priced different: the GMC price is inflated by $7K so that they can offer “discounts” and “sales”, and to make it impossible to compare the actual price with, say, a Ram pickup (which may be inflated by only $6K with $6K of discounting). And everyone knows it, so if you go in and buy it at MSRP, you feel (and were!) cheated.

            Try going into a GMC dealer and actually paying what the truck’s real price is? Its worse pulling teeth. As a bonus, try it if you have 2 X chromosomes and have to deal with the misogynistic crap present in so many car dealers…

            The “tell me the real OTD price” is a way for a good, quick, easy sale, the customer buys the car, is happy, no mess, no fuss, and the dealer gets a fair profit in the process. But in my experience, only 1 in 10 dealers will actually do this.

            And why do you think the European delivery price for a BMW, Mercedes, or Audi is 5-7% below MSRP (even though you’d expect it to cost more: its a custom car, includes 14 days insurance, and they have to handle shipping and do more handholding from the factory): Its because on the built-to-order, Euro-delivery cars they don’t have all that fake discounting business: its Tesla’s pricing model there. A no hastle, take it or leave it, real world price.

          • 0 avatar
            krhodes1

            @Vulpine

            You have the option of going to a different dealer if dealer A wants to screw around with pinstripes and undercoating BS. Or just buy a different make altogether. Which is also an option with Tesla.

            I fail to see the angst either way. If MSRP is the best price I can get anywhere, then I will pay it if the car is worth that to me. Or I will buy something else. I played VERY hardball with BMW because I could. The option existed to pay less, so I took it. But ultimately I don’t really care one way or the other.

            I think Tesla should have every right to own their own dealers, as long as they are not in competition with franchised Tesla dealers. Since there is no such thing as a Tesla franchise, there can be no problem. Owner’s of other makes franchises don’t have a leg to stand in in this, as far as I am concerned.

            BTW, if you really want to be treated like a king for a day, do European delivery on a BMW in Munich. Fantastic experience, and at a nice discount to boot!

          • 0 avatar
            krhodes1

            @Nicholas Weaver

            Buying a BMW European Delivery is no different in any way than buying one for normal dealer delivery, built-to-order or off the lot. BMW makes no distinction at all, other than you have a lower MSRP and the dealer pays a lower invoice price – the gross profit spread is just about the same either way. It is NOT a discount, which is a nice distinction in states like Maine that tax you on MSRP, not final price. I save a few bucks every year due to this. You negotiate the price in exactly the same way, and you are buying it from the dealer in exactly the same way.

            ALL BMWs are built-to-order anyway, worldwide. The factory makes no distinction whether a car is built for a specific person, or for a particular dealer’s stock. Other than dealers are not allowed to order certain colors and options for stock.

          • 0 avatar
            Vulpine

            @krhodes1:

            As I said, I ended up custom ordering a Saturn Vue to get the options and features I wanted. Because I ordered it, the dealership was not given the option of adding “dealer installed accessories” BY ME. That alone saved me over $2000.

            I did the same with a Jeep Wrangler 6 years later, getting just the package I wanted with no third-party (meaning dealer) options. In fact, I haven’t bought a car ‘off the lot’ in almost 20 years. I also get my own financing which is typically less by far than what the dealership wants to offer. With a Tesla, I wouldn’t even need to go into a dealership to do the same thing.

    • 0 avatar
      probert

      I hear you, but sometimes you’ve got to be a mench.

    • 0 avatar
      heavy handle

      “BUT he paid full price. What fun is that”

      I think that Tesla’s retail prices would be at least 10% more if they had the extra expense of a dealer body (plus inventory). The “fun” of going back and forth with a polyester-double-knit drone comes at a high price.

    • 0 avatar
      redav

      All you have to do is write a made-up number on a sticker, stick it to the car, and BOOM!–instant saved money. After all, that’s what most every other sale is.

  • avatar
    dwford

    This level of simplicity and customer service is the benefit of the direct sale model. Not being able to negotiate and pit competing dealers against each other means Tesla customers are paying a premium for the experience though.

    The main reason for the distasteful buying experience at franchised dealers is that there is lying and adversarial relationships at every level, from salesperson/ customer right on up to manufacturer/dealer. At each level the 2 parties are trying to maximize what they can get, whether it’s salesperson/ customer, manager/salesperson, owner/manager, manufacturer/ owner. At each level there is an attempt to cheat the other party to maximize personal benefit.

    The Tesla employees at the showroom didn’t convince you to buy the car and aren’t getting a commission, so it’s really easy to be laid back and happy. A typical auto salesperson gets beat up by the customer, the sales manager and the f&i manager all for mostly likely a mini commission, and just wants the customer gone ASAP by the time it’s all done.

    • 0 avatar
      jhefner

      This is a lot like Apple vs. the rest of the computer world; shopping is simple, using it is simple (usually), the experience good, but it comes at a premium.

      • 0 avatar
        DC Bruce

        Wait! “It comes at a premium”? You just described what comes with the “premium”: simple shopping, good user experience. If you don’t want to pay for that (i.e. the “premium”) why do you think you should get it?

  • avatar
    cdnsfan27

    dwford you hit the nail right on the head. If our customers came in and test-drove a vehicle and purchased it at full price there would be no adversarial relationship. They would then be presented with a menu of F&I options that they could accept or refuse. Simple, non-confrontational and profitable, the way it should be. But ours seems to be the only industry where it is unnacceptable to make a profit. Why, beats me. But after spending hours with a customer who test-drove 3-4 vehicles, gives me a low-ball offer then drops in a trade at the last minute because that’s what Edmunds told him to do, we finally have a deal, usually at or near a mini. Then I spend another hour delivering the vehicle with a smile and hope they don’t mess up the survey because according to our manufacturer anything less than “truly exceptional” is a fail. One bad survey, no bonus. The customer leaves, I wave bye-bye and line up to do it all over again. But even though it can get frustrating and this sounds like a rant, I love the life and wouldn’t do anything else.

    • 0 avatar
      AMC_CJ

      The survey……

      When I bought my Mustang, it wasn’t a great experience. I saw the car, liked it, wanted it, but I didn’t have any credit history at all. I told them I had money, but the weekend manager pretty much shoved me out the door. I get it, I’m young, I’m not even in the credit history, but damn, if I say I have money I mean it. Then they wanted to hit me with a crazy 13%+ interest rate…. in the end I got 3.9%, but I had to really fight for it.

      I made sure to grill that weekend manager in that Ford survey though. The sales guy said anything less then perfect and he loses his bonus. I singled him out as fantastic, and apologized in writing on the form, but wouldn’t give them a pass on the whole.

      Working for a dealership myself for a bit, I don’t feel a least bit sorry for the sales people anyways, but that’s a whole other rant.

      • 0 avatar
        cdnsfan27

        I am sorry you had a bad experience with F&I which is where most of the negative scores come from. Unfortunately every question on the survey affects only your salesperson’s bonus, nobody elses. I had a 6′ 6″ customer who felt uncomfortable in my office chair and rated amenities 1 out of 10. Even though he rated me 10/10 I still failed the survey. It is how it is.

      • 0 avatar
        Vulpine

        That’s nothing new. My father worked on the service floor of a dealership over 60 years ago as an oil-change specialist. One day, he watched as an old farmer came in and looked around the sales floor at the different models. Because he was wearing his farming clothes (overalls over long-sleeve shirt) the sales people pointedly ignored him. Dad, being the natural salesman that he was, walked out of the shop to the floor and asked the farmer if he could help. The farmer pointed to one of the cars and said, “I want this one.”
        “Let me get you a salesman,” my dad offered.
        “No, I don’t need one. I want this car and I’m paying cash,” said as he pulls out a wad of bills from his pocket.
        Of course, on sighting the money every salesman on the floor rushed over to make the deal, but the farmer refused. The farmer called for the owner and told him, “I’m paying cash for this car and I want THIS man,” pointing to my dad, “to get the commission. He’s the only one in here that was willing to talk to me.”
        To close with a cliché, that’s exactly what happened. From that day forward for as long as my dad worked at that dealership, not a single person came in that door without a salesman greeting them. Dad was told never to come into the showroom again to talk to a customer–no matter what.

      • 0 avatar
        Kyree S. Williams

        I think this whole high-pressure environment is ridiculous. That the salesman felt he even *had* to tell you he’d lose his bonus on a non-perfect score just indicates how much undue weight was placed on that survey.

        A comment I often get when I’m at a dealership is, “You know more than I do about this product,” or “You should be working here, not me”. Truth is, I would *never* want to be a commission-based car salesman. I’d rather work at Walmart…

        • 0 avatar
          krhodes1

          In this day and age I never, ever expect a salesperson to know more than I do about anything I am buying. *I’m* the one spending the money, thus I do my homework before setting foot into the showroom. Selling me a car should be a very painless endeavor – my BMW sales guys total contribution to the process was dragging out the leather sample book so I could make up my mind as to which color I wanted to order. The colors DO look different in person than on a computer screen, as the OP found out with his red Tesla.

    • 0 avatar
      Xeranar

      So what you’re saying here in practical terms is the business practices and business perception tied to the automotive industry at the dealership level is completely broken. Instead of reflecting upon it and perhaps asking why it is broken you in turn get upset with customers who walk in and have grown up being told that this is one place left in the US where they expect you to be a skinflint and appreciate you being a complete jerk at every turn because that’s how you save money. Nobody seems to asked the critical theory questions of why the system is broken, just that it is and that somebody else is to blame when it seems to be a self-perpetuating hellhole.

    • 0 avatar
      Vulpine

      I didn’t ‘love the life’ and got out of auto sales. Hours on your feet every day and if you’re lucky sell one car on any given day. Really lucky and you might sell two. As for the selling process? At two different dealerships I was trained on how to promote the brand and specific models–and basically told to “baffle them with bull****” if I didn’t know the answer to a specific question (did you know that the Dodge Colt station wagon was a “minivan”? That’s what they told me to say when I got asked that question).

      The best salesmen in the dealerships where I worked fell into one of two categories and I’ve seen this myself every time I’ve purchased a new car:
      * High Pressure Sales — Seems to know everything about the car but clearly makes up things rather than digging for the truth. Does everything he can to get your signature on something–ANYTHING–as quickly as possible. Will even go so far as to find ways to make you stick around if he senses your interest lagging. May get more sales, but not always the better deals for both sides.
      * True Believer — This is the salesman I like. He’s bothered to do his research and tries to know as much about what he’s selling as he can. In fact, he truly believes that what he’s selling is the best available for the price. He can answer all your questions and if he doesn’t know the answer he tries to get the answer either through the printed documentation or online research. He also typically drives an example of the brand, if not the specific model, as an everyday driver. He (or she–I was raised on the masculine as the ‘generic’ term even if it is now sexist) even knows about any questionable areas and keeps up with service advisories and recall notices and typical maintenance foibles of the vehicle. Denial of such may sound good to the typical customer, but if said customer has already heard horror stories, telling the truth makes that salesperson and that dealership look more relevant.

      However, an educated buyer–one who has already done their research–really doesn’t need a salesperson. They’ve already pretty well made up their mind but may want to get a ‘hands-on’ analysis. I can’t tell you how many times I was ready to buy a car, only to discover it drove like crap. It might be underpowered, or the gearing ratios were all wrong to give the desired performance or it wallowed like a rowboat in rough water; so many specs and paperwork looked good, but the reality fell far short of the potential. You really don’t need a dealership for a test drive and the salesperson is an unnecessary annoyance to a buyer like this. At the same time, this kind of customer may be that salesperson’s favorite–no questions, no ‘selling’, just handle the paperwork. Problem is, said salesperson still has to go through the different pitches for service packages, etc., so the dealership still ends up being more stressful than necessary for the buyer.

      Tesla offers a viable alternative for the buyer who already knows what he wants.

    • 0 avatar
      FreedMike

      @cdnsfan27

      “I had a 6′ 6″ customer who felt uncomfortable in my office chair and rated amenities 1 out of 10. Even though he rated me 10/10 I still failed the survey. It is how it is.”

      Being paid on customer service surveys should be BANNED, and the practice killed with fire. I work in the mortgage business, and my last job was as a loan officer. No matter how good you are, there’s always one clown who decides to trash you for no good reason, and there goes your bonuses.

      At my current job, the processors are under such unbelievable pressure to deliver high scores on their surveys that they have basically given up being mortgage professionals, and have become professional whiners – I mean, “customer advocates” instead. So now we get to deal with stupid, stupid, stupid garbage like “he doesn’t want to send in a paystub and bank statement we can actually read,” or “he doesn’t have time to fax in this or that.” All because they’re deathly afraid of going back to the customer and asking for something, which is just SO annoying for them (eyes roll).

      And employers use this kind of crud to job people out of bonuses and promotions.

      The pressure it puts customer-facing workers under is MURDEROUS. It’s led to huge attrition where I work. We’ve lost lots of good people because they just don’t want to put up with their paycheck being jacked because some customer is a jerk, or is having a bad day.

      • 0 avatar
        cdnsfan27

        The customer survey started out as a good idea because a lot of dealerships offered poor customer service. The good dealerships never needed a survey to know they were doing a great job. When surveys first came out 750 out of a 1000 was considered a pass but now because the importance of JD Powers you need 950 to pass. It is just a mark inflation that is meaningless. Manufacturers put an artificial number out there for us to hit, do they want the truth? To quote A few good men “they can’t handle the truth”.
        It is not just in my industry that organizations shoot for unrealistic numbers, when I was in the Army any thing less than an “outstanding” on an OER was a fail. Just ridiculous.

    • 0 avatar
      Syke

      Shortly after Infiniti opened it’s dealerships, my sister bought one of the first G20’s. Loved the car, liked the dealer experience – except for the survey afterwards. With Infiniti the magic term was “completely satisfied” and the dealership was incredibly overbearing about getting nothing but those ratings.

      As you left the service driveway, there was a stop sign (dealer designed, not DOT) with “remember: completely satisfied” written under it in a bigger type style. It got to the point where you’d get a call from the dealership if you didn’t fill out your survey that way, and the dealership started offering incentives if the customer would bring their survey forms in unfilled-out.

      As much as Beth loved the G20, the dealership harassment (admittedly apologetic, but still annoying) ended up putting her into a Volvo 850 at trade-in time.

      • 0 avatar
        bryanska

        Yup, I returned my survey with 4 stars, and the next few times I went for service they didn’t give me one.

      • 0 avatar
        danio3834

        Reminds me a little of how some dealers with crowded real estate dealt with the survey question of, “Was there ample parking provided?”.

        In the customer parking area, they put up signs labelling the area “Ample Parking”.

    • 0 avatar
      eggsalad

      I don’t know where you are, but it sure isn’t Las Vegas, where every car at every dealership carries a $2000+ “ADM” sticker. It may be *possible* to buy a car at full MSRP here, but even that will take a great deal of negotiating.

      Me, I’ll buy a one-way plane ticket to Phoenix when it’s time to buy a car.

      • 0 avatar
        cdnsfan27

        What happened to “The King of Cars”?

        • 0 avatar
          eggsalad

          Ah, Josh Towbin’s Dodge dealership. After the antics he pulled on that show (and still pulls today) I’m surprised people still shop there.

          But they do, in droves. And he’s more than happy to roll your $10k upside-down heap into your new car loan at 14% interest, all while charging $2k over MSRP for your new ride.

      • 0 avatar
        nickoo

        Don’t discount driving out to Long Beach/LA area. There’s some incredibly good deals on cars out there. My buddy just bought a civic for 18k optioned such that he couldn’t get a single dealer in the San Diego area to go less than 21k on.

    • 0 avatar
      krhodes1

      Buying my FIAT last year was pretty nice. I test drove a Turbo and an Abarth, decided I wanted the Abarth. I was already approved by my CU, but they were able to beat the rate substantially so I financed with them. The F&I guy gave me a list of what they offered, I declined all of it. No pressure at all. They gave me a decent discount off the price with about 5 minutes of haggling. Maybe I could have gotten it for a little less, but who cares it’s a cheap car anyway. Completely painless, and took less than an hour. Took another hour for them to prep the car and put an inspection sticker on it.

      The BMW took a little more haggling, I did walk out on them and had to wait for the phone call, which came about an hour later. They came to within a couple hundred of my target price for the car, which was close enough on a $45K car. Maybe I could have gotten it a little cheaper at a different dealer out of state, but this one is two miles from my house.

  • avatar

    For Free(r) – Market Capitalism, goto China.

  • avatar
    Kardax

    Just wanted to mention a few minor inaccuracies. The wait on non-P models is officially 2-3 months, not weeks, but people have been getting them much faster than that. The S85 is $10k more than the base and gets you 65 more miles and supercharging; the P85 is another $14k on top of that but gets you the 4.2 second 0-60 time.

  • avatar
    AMC_CJ

    This is how I think cars should be sold. Just have factory stores, a model of each to test drive. Most people don’t want to wait for a car, and apparently some people only have one car so when they need one, sometimes they need one like right now…. (factory store rental why you wait?)

    I wouldn’t have a problem with paying a set price on a vehicle. Actually, I’d prefer it; no sales, no incentives, this is the price it’s always going to be, you can either afford it or you can’t.

    • 0 avatar
      Kenmore

      “This is how I think cars should be sold.”

      I’m holding out for blister packs with a couple of Chinese batteries included. I’m watching Datsun.

    • 0 avatar
      danio3834

      See, I like being able to negotiate and pit 3 or more dealers against each other in a reverse auction. I get it, most people hate negotiation but don’t want to get hosed.

      Though, even if all car dealers went to a factory owned model like Tesla, I’d still get my deal. Fixed pricing only really works when demand is greater than supply. When supply is greater than demand, the fixed price policy goes right out the window. I’ve tested this at used car stores with this policy, and even on retail electronics and furniture. These policies only exist to make the lazy feel like they aren’t stupid for being taken advantage of because everyone else is too. And of course to make the company more money.

      • 0 avatar

        There is an easy way to pit 3 or more dealers in reverse auction manner against each other. It is called truecar.com or similar online scheme. All people I know including myself who bought cars last several years bought them this way – online and are very satisfied. My coworker who bought car from Costco even recommended the particular sales person and gave me his business card (since we bought the same car) – that’s how he was satisfied. He actually even bought car in different color of his choice than originally was quoted. Buy car online and that’s it – no need to visit dealership and suffer.

  • avatar
    SCE to AUX

    This is a part of the ownership experience I’ve never read about before. Thanks for this installment.

    The issue of color is intriguing. Didn’t you look at online photos of red Teslas, or maybe see another one in person? Either way, I’m sure you’ll get used to it.

    • 0 avatar
      LeMansteve

      One possible explanation for the perceived color discrepancy is, not all computer monitors display colors alike. I say shame on him for not deciding color in person.

  • avatar
    VenomV12

    Good Lord, I can’t stand the ignorance of some people. Of course you are going to have a great experience from a brand new fledgling company that sells a small amount of cars at a very high price. If you go to a restaurant that charges a $100 a person to eat and only has 25 customers a day as opposed to a 1,000 like McDonald’s you are going to experience the same thing, better service at the more expensive place with less customers. Considering you are buying a $50,000 car for $100,000, you should get treated well.

    When you are moving 18,000 units a year you can afford to take the approach Musk does and fix everything quickly and look like you are giving the greatest customer service in the world. What do you think will happen when there are a million of these things on the road, you really think you will get the same service? You think when they have $35,000 vehicles Musk is going to come and wipe your bottom for you like he does now?

    For the price of this car I can buy a loaded Lexus ES, a loaded Lexus RX, get fabulous service and still have enough money to fuel them for years. I just don’t see the point of paying six figures for a car with limitations and a sub-par interior and lacking in the tech its competitors have. Even Ol’ Big Truck made a better decision getting an SRT 300 and an SRT Jeep Grand Cherokee rather than one of these cars. I can think of a million different combinations of vehicles I would buy before I bought one soulless car like the Tesla. Like I said before this car for $35,000 to $40,000 or so as a city/surburban runaround makes sense, but at the full price, it is utterly ridiculous.

    • 0 avatar
      danio3834

      “I just don’t see the point of paying six figures for a car with limitations and a sub-par interior and lacking in the tech its competitors have.”

      The author pretty well explained it in his first article. He lives in SF and places high importance on having the latest gadgets. The Model S fits the demo nicely.

      • 0 avatar
        Vulpine

        If you don’t like the car, just say so and let others like what they will. I don’t see the “limitations and a sub-par interior and lacking in the tech its competitors have” that you do since Tesla doesn’t have any real competition at the moment. I’ve sat in one and found the interior quite comfortable and it’s certainly not lacking in any tech. In fact, I’m not sure what you consider a “limitation” since most autophiles swear by rear-wheel-drive and power. Except for its up front price, the Model S meets the needs of 99% of the car-buying (vs truck buying) public.

        I do wonder how it would handle foot-deep water on flooded roads, though.

    • 0 avatar
      FreedMike

      “For the price of this car I can buy a loaded Lexus ES, a loaded Lexus RX, get fabulous service and still have enough money to fuel them for years. I just don’t see the point of paying six figures for a car with limitations and a sub-par interior and lacking in the tech its competitors have.”

      And I don’t see the point of paying Mercedes prices for glorified Toyotas. But I certainly wouldn’t razz you for buying them.

      • 0 avatar
        heavy handle

        That’s what I thought: an ES? You seriously need to dream bigger.

        • 0 avatar
          VenomV12

          You can scroll up in the comments to see what I drive. Obviously the point of my comment went right over your head. Let me know if you want me to explain it to you or see if you can figure it out yourself.

          • 0 avatar
            Vulpine

            Honestly, I don’t care what you drive; you like what you like and I like what I like. But I don’t go out lying about someone else’s brand if I don’t know anything about it. I don’t own a Lexus and I don’t plan on owning a Lexus–for a number of reasons that have nothing to do with how good it may (or may not) be. You have not heard me say one word against or even ABOUT Lexus in this thread until now. But I will comment about dealerships because I have experience on both sides of the deal–and I don’t like it.

          • 0 avatar
            shaker

            I believe that the SRT versions of the Charger and Challenger received Exxon/Mobil’s “Car of the Year” award – the Model S wasn’t even in the running. Hm.

    • 0 avatar
      Vulpine

      Speak for yourself, Venom. Maybe the reason ‘ol’ Big Truck’ bought those two over a Tesla because he had a need for a different kind of car, NOT just because he hated the Tesla (but his hate alone is a big reason).

      That’s fine really, if he doesn’t like a model, he doesn’t have to buy a model; he’s in better shape than many of us. Right now if I want to buy an American pickup truck smaller than full-sized, I Have NO Choice. And when the Colorado/Canyon come out the choice is only SLIGHTLY better, but even that’s as large as a 1990 full sized model. He doesn’t want an electric, he doesn’t have to buy an electric; I don’t want a full size, but I’m forced to buy full size–or nothing.

      • 0 avatar
        danio3834

        I recall that BTSR actually really liked the Model S.

        • 0 avatar
          VenomV12

          No, he likes the stock price of Tesla due to the dummies running it up and overvaluing the company. If he liked Teslas he would own one, he doesn’t and to the best of my knowledge he has expressed no interest in purchasing one either.

          • 0 avatar
            danio3834

            From the description on one of his Youtube reviews of the S,

            “I normally HATE Electric Vehicles (EV), because of the cramped interiors, the range anxiety issues and the lack of performance (Fisker Karma for Example), but the Tesla Model S could be the EV that makes a LOVER out of me.”

          • 0 avatar
            VenomV12

            Danio, he voted with his dollars and it was not Tesla. He is enjoying two large and fun vehicles and seems to be pretty happy with that and he has expressed no regrets about his decision or interest in buying anything else.

          • 0 avatar
            danio3834

            I must have missed the daily reminders from the man himself.

            The point was that he doesn’t in actuality have an irrational hate for the Model S as Vulpine suggests. I’d say he gave the S a fair shake and noted the positives and the negatives. The reviews come off as generally positive. Yes, he clearly prefers his SRT products.

          • 0 avatar
            Vulpine

            Danio, in other TTAC articles about Tesla he consistently panned it as over-priced and under-built as it were. He literally equated it with a Chevy carrying an Audi price tag. If that’s not ‘hate’, nothing is.

          • 0 avatar
            danio3834

            It’s not hate, it’s an accurate analysis. It mirrors my own impression of the car and anyone else who has the ability to take off the rose colored glasses and compare the Model S with it’s competitors.

            BTSR gave the S a fair review. Just because he doesn’t fall over himself to only mention the ups and not the downs does not make him a hater. In fact, refusing to acknowledge the flaws with the vehicle makes you a kool-aid drinker.

          • 0 avatar
            Vulpine

            I have been in a Tesla Model S and even bothered to photograph the interior while I had the opportunity, though I’ll admit I didn’t drive it. From what I could see, his “analysis” was way off as the car was quite comfortable. Since I personally work with leather too, I took a brief glance at the quality of the leatherwork in the car–on the seats and elsewhere–and could find no visible fault.

            If I come across as a “fanboy”, it’s because I believe the advantages overcome the disadvantages in all but a very few areas such as long-range driving where the Superchargers currently don’t exist. The quality of the car itself seems quite good and worth the money when taking the cost of the batteries into account.

    • 0 avatar
      TrailerTrash

      Awesome.
      And part of my point earlier above. That is…such a small snap shot of the Tesla experience simply cannot be used to paint the entire plan as such a success. Allowing them to build such a quality customer care image on such a small scale and compare it to the monster programs of others is simply unfair…bordering on making just a big fib.
      And when discussing ONLY what is good for the customer now and never discussing what is fair or good for dealership networks is also extremely unfair and misleading. And perhaps more costly in the future for all..IF such narrow focus is used to force changes business wide.
      The entire dealership experience is nowhere near as poor as painted above. Indeed, it is so much more. I always have dealers willing to cut each other’s throats to get my business.
      I have no problems finding what exact car I want and ordering it…or waiting on it to be found or built and delivered.
      Damning dealers for cars on the lot and their not have your exact car is silly. They themselves would have any car in volume IF they knew it was going to move.
      It is, after all, their business to sell the damn cars. The keep around what people want.

      • 0 avatar
        Vulpine

        And exactly what IS “fair and good for dealership networks”? I understand their desire to protect themselves from the manufacturers they actually do business with, but that shouldn’t affect their relationship with other brands. As such, their argument that they want to protect themselves from Tesla makes no sense, but their argument that they want to protect their operating paradigm and third-party income does.

        Current law is quite clear that whatever brand they’re partnered with can NOT build an outlet of their own within a certain range. (I think that range is variable depending on specific state, but it’s long enough that it’s almost impossible for a manufacturer to even find a location that distant in most states.) Their efforts to prevent ANY manufacturer from doing so is simply anti-competitive. Until a car company gets big enough to NEED franchised dealerships, they should give that company room to breathe so they can grow to that point.

  • avatar
    FreedMike

    Pretty cool…and at the same time, I can’t see this order system working well for high-volume carmakers. For a fairly low volume, “special” car that’s basically built to spec for each customer, it’s a great solution – there’s no inventory carrying charges.

    I also wonder what happens if the buyer gets to the store and changes his mind about the car. Is there some inventory of these somewhere? With Tesla volume being where it is, I can’t see this as a huge problem, though.

    I think high-volume makers will have to continue to keep large amounts of inventory on hand.

    • 0 avatar
      Vulpine

      Considering Ford’s ability to offer a dozen trim and size packages on its F-150 pickup truck with parts management so accurate that few, if any mistakes are made for getting the right parts to the right truck on a fairly fast-moving assembly line, the concept of A La Carte ordering isn’t as unworkable as it was 40 years ago when they abandoned that paradigm. I believe it can work for high-volume manufacturing just as easily as Ford’s current trim-package system on the VERY high-volume F-150.

      • 0 avatar
        Nicholas Weaver

        In fact, BMW, Mercedes, Porsche, and Audi all offer a-la carte build to spec manufacturing. The only problem is you actually need to fly to Europe to pick up your car…

        • 0 avatar
          Vulpine

          Other than Tesla, what AMERICAN company does that?

          • 0 avatar
            28-Cars-Later

            How many of those are there again?

          • 0 avatar
            Nicholas Weaver

            None, and that’s the problem.

            They could from a technical and manufacturing standpoint. In fact, they could do it better, since the delivery time wouldn’t be nearly so bad, and the factories themselves are effectively 0-changeover time on a lot of the options/customization.

            So you, say, spec your F150, put down the deposit, and it shows up at the dealer in 30 days.

            But in order to do it you need to do fair pricing, because otherwise the buyer feels taken advantage of and would just never participate. How many threads do you see on TTAC where its “Nobody pays full price for a truck”, because the sticker price is a fiction, and the real price is some mysterious value that is somewhere between $3000 and $7000 less?

            So you’d need to do a fair-price model, where the dealer gets say $1K to handle the paperwork (and then makes their killing on the service shop).

            Yet the dealers would object, because of selection bias: Those happy with haggling would stick with the “traditional” model, but the rest would go with the “fair price/custom delivery” model which would eliminate the ability to fleece the occasional sucker, since after all, the dealer is never going to sell for a loss, but if they can convince 1 in 5 suckers to pay an extra $2k, that adds up.

            So I don’t think they can because of the power of the dealers. Heck, the euro luxury cars can’t without resorting to a “pick it up in Europe” model.

            The Tesla model really is a better way to buy a car, but I don’t see a way to get there from here, short of new manufacturers who simply bypass the whole dealer model altogether.

          • 0 avatar
            Vulpine

            “So you, say, spec your F150, put down the deposit, and it shows up at the dealer in 30 days.”
            The fallacy so far is that exact statement. You’re typically lucky if you get an ordered car/truck within 90 days, much less 60 or even 30. Not saying it can’t happen, but for the moment the typical delivery date for any ordered vehicle is “approximately 90 days.”

          • 0 avatar
            Nicholas Weaver

            When we ordered our XV (Manual transmission, blue, so you’re talking Enzo-level production for that configuration pair: 5% of 5% of the production, and when you consider the Impreza and XV are the same, its 20% of 5% of 5% of Imprezza production), the VIN plate shows that it was out of the factory at roughly the same time the order was put in. It just took 2.5 months on the slow boat from Japan to show up.

            These modern car factories are often zero-changeover: the major options are ‘pick from bin X instead of y’, its not changeover in stamping (although even those are quick on modern plants).

            It a key property behind the Toyota production system developed in the 80s, which all car makers copied. The ability to quickly change is a key component of how, say Dearborn is designed: it should cost almost nothing to switch product blend.

            Thus the manufacturing is in place, the delivery latency is there for US factories, but the dealers would NEVER cooperate.

          • 0 avatar
            Nicholas Weaver

            Also, reports of, say, X3 (so US production) custom order time on the BMW forums suggest that is already down in the 21 day turnaround time from order to car-in-hand.

            So yes, the makers could do 30 day build-to-suit custom order on product from US factories.

          • 0 avatar
            danio3834

            “Other than Tesla, what AMERICAN company does that?”

            Chevrolet, with the Corvette.

          • 0 avatar
            FreedMike

            @ danio:

            ““Other than Tesla, what AMERICAN company does that?”

            Chevrolet, with the Corvette.”

            Probably about as close to custom built car as it gets from a big manufacturer. But I don’t think it’d work so well for Mailbus.

        • 0 avatar
          krhodes1

          You can build-to-order any BMW for normal US delivery. My dealer sells nearly 50% of their sales that way. They carry very little inventory.

          BMW builds every single car BTO anyway. The parts don’t even get made until there is an order for a car in the system. Makes no difference whether the dealer orders it for you or for their own inventory.

    • 0 avatar
      DC Bruce

      If I’m not mistaken, in Europe most new cars are purchased on the “order” system, not off the lot.

      Among other things, it’s more efficient because it doesn’t involve having a lot of unsold inventory sitting around. It is the ultimate expression of the “just in time” manufacturing system that Japanese companies developed and which everyone is copying.

      • 0 avatar
        Pch101

        European company car taxation schemes support that business model.

        In Europe, taxation favors car leasing. That results in large numbers of people needing cars at predictable intervals, as leases expire and new cars are needed.

        The US doesn’t have much of a company car market in the European sense, and it probably never will. For one, we have lower income and sales tax rates; higher tax rates make it more attractive to use cars as a tax avoidance strategy.

        As Henry Ford realized, it’s more profitable to maximize utilization of the factory, push the inventory onto dealer lots, then figure out how to sell it. Ford essentially pushed the inventory risk to the dealer level, but the system has since evolved so that the OEMs end up carrying much of the burden via incentives payments.

  • avatar
    srh

    I appreciate artistic license as much as the next guy, but:

    “When I bought my Volvo, they sort of grunted at me and handed the keys over while one guy cackled like a pawn shop broker.”

    I’m sorry, I have a hard time believing that.

    • 0 avatar
      FreedMike

      And you’ve bought a car? :)

    • 0 avatar
      VenomV12

      Yeah, I have bought a ton of cars and been there when friends and family bought cars and never in my life have I seen anyone act like that. Salesmen, sales manager and owner just moved a car and made some money, no reason for them to act anything other than happy. Volvo for sure does not hire anyone like that.

      • 0 avatar
        Vulpine

        You forget, VOLVO doesn’t hire the dealership personnel, the Franchised Dealer does. If that dealership wants to act like snobs, they will and Volvo has very little to say about it. They can’t even pull their franchising license from the dealership without major legal hassles.

    • 0 avatar
      bunkie

      It’s not far off my first new-car buying experience. They didn’t even bother to properly prep the car. It was dirty, I paid a premium over sticker (it was an RX-7 when they were in very short supply) and they basically laughed at me knowing that I had no alternative if I wanted that car. Which I did as it was one the very few 1980 cars that didn’t suck.

      To be sure, there are good dealerships and I’ve known a few.

      But most car dealers are a lot like financial-service companies. Their business model is based upon hiding the true value of what you are buying. They *hate* transparent valuation, it costs them their edge.

  • avatar
    Volt 230

    you cannot buy an appliance or TV from the mfg directly, so why cars? Dell has not done that great and some other PC company that sold directly to customers also went under.

    • 0 avatar
      heavy handle

      Actually, some appliance manufacturers are starting to go direct. Miele in Canada is an example.

      You can buy electronics at the Apple store, the Sony store, and soon the Microsoft store. Most manufacturers let you buy direct on the web as well.

    • 0 avatar
      Vulpine

      “Dell has not done that great and some other PC company that sold directly to customers also went under.”

      Actually, Dell has done quite well with that and that other company (Gateway) just didn’t have the quality to back the product. Meanwhile Lenovo, Hewlett-Packard and many others do quite well with direct sales and Apple is even seeing growth selling that way in a declining PC market.

      So yes, cars could do quite well with direct customer sales. Maybe even better if we didn’t have these out-for-blood franchised dealers trying to suck you dry all the time.

    • 0 avatar
      KrohmDohm

      Apple’s retail model is doing quite well.

  • avatar
    imag

    I have to laugh that Teslas are “made” – not “built”.

    It is another Applism, lending the impression that one’s personal gadget is created by heavenly brand deities, rather than by hands and machines on a factory floor.

    OT, thanks to the TTAC deities for hearing my editing prayers.

  • avatar
    Nicholas Weaver

    One other thing: you actually can get this purchase experience from the German manufacturers. You just have to know the secret password: “European Delivery Program”.

    You spec the car, as you want it. The options, as you want it. The price is fixed (MSRP – 7% for Mercedes, a bit more floating but MSRP discounted price for BMW and Audi), the dealer doesn’t F-with you, you fly to Europe, drive it around, and it gets shipped home when you are done.

    The problem is, in order to get the Tesla level treatment on a European luxury sedan, you actually have to be willing to, you know, fly to Europe. Which has a significant cost: not for the plane ticket mind you but just for the time & hastle of being stuck in the plane…

    Tesla does that treatment for all vehicles, and you just pick it up at the closest maintenance hub (which, for SF, just happens to be the factory itself).

  • avatar
    Ryoku75

    My biggest concerns for these Teslas are their longevity, like Apple products, they’re fancy when you get them but you won’t be passing them on to your kids, let alone tinkering with them when something breaks.

    • 0 avatar
      28-Cars-Later

      The perfect marriage of conspicuous consumption and planned obsolescence.

    • 0 avatar
      imag

      At least the battery is replaceable ;)

    • 0 avatar
      Vulpine

      Really? Why not? If I had kids I currently have 5 fully functional Apple computers sitting around without a purpose. Sure, they’re older and can’t run the newest OS, but they’re still great as media servers, internet and other relatively low-demand purposes that kids could use.

      Whups! Sorry. Correct that. I have 4. The fifth just went to my father-in-law; a 7-year-old iMac to replace a 3-year-old HP that died.

      • 0 avatar
        Quentin

        My Macs have been great. I gave my first Mac, an ’06 iMac, to my mom in ’12 when I bought a new iMac… because I *wanted* a new one. It was by no means a *need*. Still running like a champ. She uses it to facetime with my daughter. It was even part of a group video chat for my brother’s birthday a few weeks back. My wife still has her ’07 Macbook. I use my ’10 Macbook Air almost every day.

      • 0 avatar
        fvfvsix

        This is true. I can’t get any of my old macs to die. By contrast, I have a relatively new PC that just shat its rear USB ports.

        • 0 avatar
          28-Cars-Later

          I do know the pre-Intel Macs were relatively well built products. I’m told the post 2006 models are as well but I have my doubts.

          Disclosure: I have not worked or owned any post 2006 Apple computers, only PPC.

        • 0 avatar
          Kenmore

          Oh, they die. My G3 iBook died three times.
          Grahics chip soldered to the *bottom* of the logic board (Macs have nothing so gauche as a mobo) would pop its solder beads due to chasis flex when lifting the iBoook from a surface. Somehow that also managed to render the HD unrecoverable.

          Fortunately I had bought Apple Care so it was twice fixed, third time got me a nice, heavy doorstop.

          There were several class action lawsuits against Mac during the aughts for hardware issues.

          But I sure loved OS X.

          • 0 avatar
            Vulpine

            Hmmm… an exception rather than the rule, since my own G3 iBook is still running–with its original battery–as a Ubuntu Linux development and testing tool.

          • 0 avatar
            28-Cars-Later

            The only piece of Mac hardware I have left is a Lombard G3 Powerbook. IIRC the Ibook was the cheap retail line. Never buy retail/consumer grade laptops as a rule, I don’t care who builds it.

          • 0 avatar
            Kenmore

            28, the same problem afflicted G4 Powerbooks which were included in one of the successful lawsuits.

    • 0 avatar
      probert

      Not much to break: an electric motor has 1 moving part and the batteries are replaceable. The hope is that they don’t pull an apple and arbitrarily cut support of the operating system.

      • 0 avatar
        Kyree S. Williams

        Indeed. I should think that a Tesla is actually mechanically-simpler than a traditionally-powered vehicle. What we’re likely to see in twenty or thirty years, when Tesla drops support on these models—or drops dead—is some kind of aftermarket system that replaces the factory drivetrain computer and allows additional functionality.

    • 0 avatar
      Kyree S. Williams

      I’ve had three or four Macs myself. Sometimes, they suffer from manufacturer defects. Right now, I have a 13″ MacBook Pro Retina that I bought in January of this year, and it’s excellent for web design. But about once every four days, it freezes. Apple still hasn’t solved it yet; I think it has something to do with the solid-state hard drive. Macs can also be fragile. The glass covering the screen is bonded to the bezel and is a b***h to replace if you break it, and if you dent any of the panels, you may as well leave it as it is because replacing it requires you to basically take apart the computer.

      Still, after all that, I think that a Mac or an iDevice is an investment. Apple has far fewer computers and devices to keep track of than most Windows-based manufacturers, and they make their own software, so they can support their products better. They stay relevant and usable for a lot longer, too. My old MacBook Pro, which was a mid-2009 model, still ran the newest version of OS X flawlessly. My old iPhone 4, which was from 2010 and that I only got rid of a couple of months ago, ran iOS7 like a champ. Do you *know* how ancient a 2010 device is in the smartphone industry? I think that’s amazing. The price-of-entry may be higher, but it justifies itself for longevity, relevance, and what I would consider to be a superior customer experience.

    • 0 avatar
      FreedMike

      We shall see, Ryoku…but if I were a bettin’ man, I’d say that electric cars as a whole will do better reliability wise than their internal combustion cousins, particularly when it comes to drivetrain issues.

  • avatar
    DC Bruce

    Thanks for this article, the previous one, and the slings and arrows of the outrageous B&B ;-) in the comments. The point is one person’s perception of the whole ownership experience — which is different than from other cars — and that’s what you’re giving us.

    The problem with the current pricing model used by car makers and dealers is that it is so utterly non-transparent. And the lack of transparency makes interbrand shopping nearly impossible. Sure, you can look at MSRPs to compare car A with car B, and, let’s say Car B is more expensive on an MSRP basis. But, it turns out that Car B is more frequently discounted (or more heavily discounted) than Car A, so actually they are priced the same. Let’s say I want Car B but can only pay the price charged for Car. The result of this pricing opacity is that I never know that Car A and B are price-equivalent and that I might actually buy Car B at the price I can afford.

    The notion that you’re getting a “deal” because you got X percent discount off list price is ridiculous. If most everybody is getting X percent off list price, then you’re not getting a “deal”, you’re just paying what everyone else pays or, at best, avoiding getting screwed by paying an above-market price.

    This is why people in the U.S. hate the new car buying experience. Whether they are sophisticated or not, they have the fear that they’re getting screwed because some other customer paid less for the same car than they did. It’s not a happy outcome.

  • avatar
    tankinbeans

    I got to drive a Tesla Model S with the P85 at their little hole in the wall service station. In Minnesota the advisor advises against the P85+ because it only comes with summer tires mounted to 19 inch rims, and to get tires compatible with winter was a $10k option. She said it wasn’t worth it.

    I only went because my friend said he wanted to take a peek at one and I knew that I’d never be able to afford one. It was an interesting feeling and the regenerative braking was strange in an “I like this, but don’t know why” sort of way.

    • 0 avatar
      raph

      Tire manufacturers have been steping up their game with all-season tires and compounds lately. Michelin has an all-season tire that offers the same or better handling as some of their competitors summer only tires (Michelin specifically called out Continental and Pirelli).

      I’ve been thinking about giving the AS3 a whirl to see if it holds up to the hype. Somehow I think I won’t be disappointed as I’m currently running a Nitto 555 due to an oddball staggered fitment on my vehicle.

      The 19″ tire is a 245/45R19 on the Tesla S (the sport package is a staggered 245/35R21 & 265/35R21 fitment – odd I couldn’t find tire sizes on Tesla’s specs page), in the case of the AS3 it would have to be an upsized fitment at 255/40R19 but that also opens the door for fair weather cars to be shod with a Pilot Super Sport.

      Nevermind me, I just like tires, but if you run into a Tesla owner hellbent on getting the P85+ car with 19″ rims let them know there are some excellent all-season tires out there for their car provided they don’t mind upsizing and if its permissible to do so within Tesla’s warranty.

  • avatar
    ccd1

    My last two car purchases followed more or less the same process. For our Mazda, I researched and identified the Mazda6 hatchback as the car I wanted to buy. When Mazda essentially dropped the price by $5,000 to get rid of the current Mazdas to make room for the completely revised model in 2008, I walked in the dealership (with financing already in hand), briefly test drove the car to confirm my selection and bought the car. The whole process took much less than 2 hours.

    We just purchased a Kia for my wife. We test drove the vehicle after it passed her “appearance test.” The dealer did not make an attractive offer and we left. I then started doing my research to find the best price on the car. Then we went to that dealer (financing again in hand) and drove away in less than 2 hours. The financial part might have taken an hour and that is with switching to Kia financing because they had a better rate. Savings over MSRP was around $4500.

    I’m not a fan of dealers who only list MSRP and make you go through a whole production to get the price you want.

  • avatar
    marc

    Ugh, I can’t help it. I must wade just a little into this one. Maybe just up to my ankles.

    My problem with this series is that our author has stated he knows nothing about cars. So he is describing what to him is a unique expeience, but has only a comparison to one other experience to form his frame of reference. (And I also don’t buy that buying the Volvo could have been that bad.)

    He’s never experienced Saturn, European delivery, or even the coddling of a Lexus dealer. Reminder, I love Teslas for many reasons, not the least of which is rooting for the hometown team, as I am also a Bay Area resident. But the experience is just not that unique. It’s the experience that wealth buys. So what we have, once again, is not a model for how the mass market auto industry can or should operate, but a yarn about how good it is to be the king.

    • 0 avatar
      jmo

      “It’s the experience that wealth buys.”

      Lexus and Mercedes both did the sleazy, “What can we do to get you into a car today?” “You know, the special incentives only last till the end of the day, so you really need to buy now!”

      • 0 avatar
        marc

        I’ve shopped 3 Lexus dealerships on multiple occasions, and I have never experienced that.

      • 0 avatar
        VenomV12

        I have a hard time believing that. The best automotive experiences I have had in my life were at Lexus and Porsche dealerships for that matter. From the early 90’s when I first stepped foot in a Lexus dealership till now, the experience has never been less than excellent.

        • 0 avatar
          marc

          Just for clarity, I’m agreeing with VenomV12, not jmo. Lexus, in my experiences, has never done the hard sell. It has always been warm and courteous service.

          • 0 avatar
            jmo

            Oh, it was warm and courteous. But it was still, “Just so you know…the incentive offer ends tonight.”

      • 0 avatar
        el scotto

        That’s never been my experience at Lexus or the tri-star. Here’s my opinion of the overall shopping experience. Lexus, Mercedes, Audi,BMW,Infiniti, and (gasp!) Cadillac: All outstanding. Volvo, Nissan, Lincoln: very very uneven. Depends on what exactly you’re buying at Volvo and Nissan and May The Good Lord Favor You With His Grace if the Lincoln showroom isn’t a complete separate area at an Ford-Lincoln dealership. The Big 6 (Ford, GM, FCA, Honda, Toyota, Mazda) all mediocre and not something to anticipate. Or These are the places car salespeople make their bones; expect bad ones. The Korean duopoly. Strictly bottom feeders. I never knew loud plaid came in polyester and that faxed price quotes where suggestions. My two favorite ones from the last round of car buying. 1. Salesman: Sir, silver is the BEST color for resale. Me: Yeah, if you wanted a silver car and I don’t. 2. Taking mom to look at Miata. Salesman: Ma’am, you do know this is a manual? Can you drive a stick? Mom: Lets leave right now. She’s on her 4th Miata.

    • 0 avatar
      doogie

      Not my experience with Lexus. Five weeks ago I contacted three dealerships regarding a GX460 for my wife. We are leasing. Two dealers were close on the monthly payment. The third was 25% higher. I am educated and knew what I should be paying. It wasn’t worth continuing with this dealer.

      For the remaining two dealers, one had fees due at signing $2000 higher than the other. The difference wasn’t taxes as those were identical in both cases (as they should be). The difference was dealer BS.

      So we had the deal settled and the dealer promised we’d be able to pick the car up (Black/black…not a unique color scheme) in a week. We are still waiting.

      The Tesla model is SO MUCH BETTER THAN THIS! Every single dealer experience I have had has been a battle. Porsche, BMW, Lexus, etc. I am now looking at a Tesla. Every interaction with them is pleasant.

  • avatar
    Dingleberrypiez_Returns

    The message I got from this article was that Tesla buying has some pros and cons. Less hassle and nicer salespeople BUT you can’t see the car, or test drive it, and if you don’t like it, you’re pretty much shit out of luck. It doesn’t appear that he’s pushing this purchase method any harder than providing anecdotal evidence that his Volvo buying experience was inferior. Were I revising this writeup, I’d tone down some of the rhetoric, and qualify the opening paragraph by stating that this is a commonly held perception of the car buying process (and not reflective of all experiences).

    • 0 avatar
      Vulpine

      No matter what brand you choose–even Tesla–you have a mandated period that is usually 72 hours (3 days) to cancel the deal from the time you sign that final paper taking delivery. You CAN see the car at any of the Tesla showrooms around the country (quite often in larger shopping malls) and those showrooms usually have a test-drive model sitting nearby. But once you get past that 3-day period, you ARE stuck with it unless it falls under Lemon-Law rules. And as that one lawsuit in Minnesota proves, there are those who will actively abuse even that law for as long as they can get away with it.

      • 0 avatar
        Pch101

        No law gives you the right to cancel a contract to buy a car. But there is such widespread misunderstanding about this that some states require car dealers to specifically notify car buyers that they do not have the right to cancel the contract.

        http://www.nolo.com/legal-encyclopedia/question-cancel-contract-three-days-28073.html
        ____________

        There is a federal cooling-off rule, which is primarily meant to protect consumers from high-pressure door-to-door sales tactics. It doesn’t apply to automobiles. If you signed the sales contract, you own the car. And the law is on the side of the dealer.

        http://www.edmunds.com/car-buying/unwinding-the-deal-what-are-your-rights.html

        ____________

        In the future, you might want to verify your claims prior to posting them on the internet.

        • 0 avatar
          Vulpine

          Better look again, that 3-day law IS on the books. But it is LIMITED to the first three days. One minute after that time and you’re stuck.

          • 0 avatar
            Pch101

            Seriously, you have rather fundamental problems with reading comprehension. This is a consistent pattern with you, and it prevents you from participating intelligently on this forum.

            (Yes, I do know the irony of typing this in the hopes that it is understood by the person to whom it is addressed.)

            From the links above:

            “***No law gives you the right to cancel a contract to buy a car.*** But there is such widespread misunderstanding about this that some states require car dealers to specifically notify car buyers that they do not have the right to cancel the contract.”

            “There is a federal cooling-off rule, which is primarily meant to protect consumers from high-pressure door-to-door sales tactics. ***It doesn’t apply to automobiles.***”

  • avatar
    Kyree S. Williams

    I dunno. Sometimes I like visiting dealerships. But then, it can get *really* annoying…such as when someone literally tries to open your car door the moment you pull into the dealership and turn off the ignition. This happened to us last week.

  • avatar
    cpthaddock

    So, no-one’s mentioned Carmax yet, the other folks who have found their formula for success with no haggle pricing.

    As recently documented by Steve Lang and the discussion that followed, there are pros and cons to the Carmax model, but the bottom line is surely that they are making sales.

    Paying a premium doesn’t just occur at time of sale though. I take our warranty covered Ford to a trusted independent mechanic for service, largely because the dealers service is just plain poor. Conversely, the warranty covered Infiniti goes to the dealer because the service is outstanding. Attention to detail. Follow-up. Communication. I’ll pay the premium, when I actually get the premium service. The real irony of this situation – both dealers are owned by the same company. Van Tuyl.

    • 0 avatar

      Carmax succeeds on the false equity of confidence it builds with customers. Unless you’re buying a late-model luxury car with derelict dependability and willing to pony up for up to 100k total miles of varying coverage or are a subprime 510-FICO shopper with a RoadLoans or have zero proof of income and 30% cash down, there are far better choices elsewhere.

      The typical qualified Camcord/RAV-V customer can get a far better deal anywhere else. ValueMax car pricing, as well, is a hilarious joke.

  • avatar
    Mandalorian

    Being someone who is quite-tech savvy, I don’t think I’d be comfortable making a purchase this big online. I get that you can demo the car at an “Outlet” or whatever, but still. Aside from the sleezeballs, the dealership experience is pretty exciting. I like most people only go there once a decade or so for things that aren’t service.

  • avatar
    z9

    I concur with the author’s sense that Tesla employees you meet during the pick up process are genuinely happy. The guy who was assigned to show me how the car worked had never done it before; he was an engineer who was volunteering to help out because they were short of people to handle the task that day.

    Typically, in any kind of manufacturing, design, or product creation business, the people designing and making the stuff never have any contact with the people buying the stuff. When it does happen (buying food from the farmer, or a table from the guy who made it), it makes you feel really good. When you pick up a product where it is made, you have a vague sense of the entire company happily and proudly smiling in a long line congratulating you as you receive your shiny new item. Now, this doesn’t literally happen in Fremont but you feel as it could happen. Contrast this with a typical car dealer where it is all about the transaction; there is no sense of mission about the product.

    Many years ago I picked up a new BMW in Munich and had a similar feeling despite the fact that I wasn’t at a factory, just a designated warehouse attached to a big showroom. The car had been paid for long ago so I wasn’t thinking about the transaction at all. Just dealing with nice people not operating on commission who loved the cars.

  • avatar
    KrohmDohm

    Tesla and Elon Musk are getting a lot of hate for one basic reason. They are disrupting the market. Similar to Apple disrupting the digital music and smartphone markets. Do a little googling and you will find plenty of pundits and critics that derided Apple and Jobs at the outset of both ventures. This is what happens in any entrenched industry when a disruptive product or service is introduced. Ask the taxi industry how they feel about Uber and Lyft.

    I for one welcome market disruptions. Once they initial shock subsides the new product becomes mainstream and one party always benefits, consumers. Whether it is a better product than previously offered(iPhone was significantly better then previous “smartphones”), a cheaper product or simply one that didn’t exist previously. The only people that resist market disruptions are those making profits from the old one.

    Remember this, the domestic car industry resisted with all their might against previous disruptions. From Japanese imports, to safety innovations(like the seat belt, safety glass and others), to tighter fuel economy regulations. The auto industry in this country has a poor track record of true innovation for the benefit of anyone other than themselves. Read up on what the big three did to Preston Tucker to keep him out of the car business.

    • 0 avatar
      VenomV12

      Tesla sold 18,000 cars last year, Ford sold 763,000 F-series trucks alone, yeah, Tesla is really disrupting the market.

      • 0 avatar
        marc

        But disruption is the new buzz word of 2014.

      • 0 avatar
        KrohmDohm

        Every disruptive product starts somewhere. iPhone sales started slow. Critics derided it as a too expensive, luxury product(sound familiar?). It was dismissed and ridiculed by critics and competitors.(Steve Ballmer was infamous for his criticism of iPhone) Apple sold over 50 million just last quarter, it’s now mainstream. In 2007 Apple sold just over 2 million phones, Nokia sold 436 million. So what if Tesla sold less than 1% of the number of vehicles of Ford? They only have one model!

        If Tesla is not disrupting the market then why are auto dealership organizations fighting the Tesla sales model tooth and nail? They are suing in court to protect their franchise based model. Stating in court that customers should be required to buy cars the way the they always have in the past, at a dealership. Because they know soon customers of other brands will want to buy their car in a similar manner as Tesla customers or at least have the option.

        Could you imagine if other retailers sued in court to prevent you from buying what you wanted from Amazon? It’s utter lunacy and another example of the U.S. auto industry doing everything they can to avoid change.

        • 0 avatar
          VenomV12

          A contract iPhone and a contract Samsung don’t cost much different than each other if any difference at all, that is why Apple was able to penetrate the market. Now put a comparable top of the line iPhone for 2 to 3 times the price of a comparable Samsung and I bet the numbers for Apple usage for phones would crumble.

          Regardless you cannot compare something that is hundreds of dollars to something that is tens of thousands of dollars different. It is no big deal if you decide to spend a couple hundred more for something you really like, it is a very big deal if you spend $30,000 more for something. The brand new Hyundai Genesis, fully loaded with AWD has tons more tech and features than a fully loaded Tesla that cost six figures and it only cost $51,000 loaded to the gills. I would really like a good reason why I should spend $50,000 more on an inferior car just to save a $100 or so on gas each month?

          • 0 avatar
            SCE to AUX

            The driving experience isn’t inferior. If it was just about price, why not settle for a Versa Note?

          • 0 avatar
            Vulpine

            “A contract iPhone and a contract Samsung don’t cost much different than each other if any difference at all, that is why Apple was able to penetrate the market.”

            Wrong on both counts, Venom. Typically speaking, the iPhone sells subsidized for $199 to $299 while the Samsung–which came long months later, averages $99 to $159 and very frequently with 2-for-1 deals, yet Apple’s iPhone still sells tens of millions every quarter. Samsung SHIPs more (they never say ‘sold’ simply because they are priced lower than the iPhone for supposedly superior specs. (I say ‘supposedly’ because specs alone do not make the phone.) The iPhone came first in ’07 with the first Samsung Galaxy coming over a year later–after several pretty dismal failures prior as they fought to catch up to Apple’s quality. It took THREE YEARS for the Android platform as a whole (about a dozen OEMs) to surpass Apple’s iPhone sales–a single company with three almost-identical models. If Samsung raised their prices to Apple’s level, it is Samsung’s supposed sales that would slide.

            And when you’re comparing oranges to oranges or cars to cars, you really can carry the paradigm across. Just like Tesla, Apple has been told by analysts and hobbyists that they simply can’t do what they want to do–to no avail as every new product Apple has released has totally disrupted the existing market for that type of product–whether it was computers, media players, smartphones or most recently tablet computers. In every case it has been the established paradigm that has changed to compete with Apple, not Apple changing to compete with mediocrity.

          • 0 avatar
            jmo

            “I would really like a good reason why I should spend $50,000 more on an inferior car just to save a $100 or so on gas each month?”

            Because it’s awesome. Why is that so hard to figure out?

          • 0 avatar
            VenomV12

            Vulpine,

            I am looking at Verizon Wireless’s website right now and the Samsung Galaxy S5 is $99 for 2 years. The iPhone 5S is guess what, $99 for 2 years. That looks like the same price to me.

            18,000 cars out of the millions of cars sold each year is statistically meaningless.

            I have lived long enough to see things come and go, remember Nokia, Motorola, Blackberry, they were kings of the cellphone game once, no more. Nothing to say that Apple won’t go that way either.

          • 0 avatar
            VenomV12

            Jmo,

            Just out of curiosity, have you ever actually driven the awesome Tesla? I have, it was not that awesome at all. I surmise that about 80% or more of the Tesla fans and lovers have never even driven this car. My take on the Tesla was that it is a very heavy car and the giant iPad screen was dangerous and distracting if anything and not really a great interface. The one thing I did like was the regen braking.

          • 0 avatar
            Vulpine

            @Venom: maybe you should look at the specs on those two phones.

            $99 iPhone5s — “2 yr price reflects $100 instant savings.” That’s Verizon’s price, not Apple’s.

            $99 Galaxy S-5 –“2 yr price reflects $100 instant savings
            and $50 mail-in rebate debit card.”

            They’re still having to add incentives to encourage Galaxy phone sales. That doesn’t really sound like Samsung has that much of an advantage.

          • 0 avatar
            jkross22

            Want to see the real market value of a cell phone? Easy. Same way you can see the transaction prices of used cars. eBay is your friend.

            Based on those prices, the iPhone is perceived to be the better phone as it is selling for higher prices.

            I’m a Samsung S3 user, but this isn’t hard to see. More people are willing to pay more for the iPhone than nearly any other phone.

      • 0 avatar
        SCE to AUX

        I guess nobody can disrupt the market if they can’t surpass the F-150 in sales. Gimme a break.

        The Model S outsold cars like the Corvette and Porsche 911 last year. That Musk sure is a fool.

        Tesla is disruptive if only for the reason that people hate them so much.

        • 0 avatar
          VenomV12

          Are you seriously comparing a 4 door luxury sedan to 2 door sports car toys?

          The point is you can’t disrupt a market when you are not even selling 2% of one model of one company. Do you realize how statistically insignificant the sales of Tesla are in the big picture?

          • 0 avatar
            Kenmore

            Doesn’t matter; young people with six-figure incomes, the ones who earn that income with their own brains and caffeine abuse, now view Teslas the way their parents did the S-class. That’s disruptive.

            “Das Beste oder nichts”

          • 0 avatar
            Truckducken

            I dunno, a whole bunch of dealer associations have their collective panties in a wad – isn’t that disruptive?

          • 0 avatar
            ajla

            “The point is you can’t disrupt a market when you are not even selling 2% of one model of one company.”

            What percentage did the Corolla sell compared to Cutlass in 1975?

    • 0 avatar
      Pch101

      Tesla is not disruptive. It isn’t displacing existing technology nor is it changing the standard business model.

      In any case, OEM-direct sales only seem innovative to (insular) Americans because we don’t have it here. It already exists elsewhere and it isn’t particularly innovative, it just supports higher prices.

      • 0 avatar
        SCE to AUX

        In 2013, 18k Model S buyers chose not to buy an ICE, especially expensive ones. And another 22k Leaf buyers made the same choice in the midstream market. That is displacing existing technology for part of the market.

        There is certainly something disruptive about Tesla, as they seem to be a hate magnet.

        • 0 avatar
          raph

          Hybrids and pure EVs tend to do that in general.

          Although I would say Tesla doesn’t suffer as much as your typical Prius or Leaf image wise.

          Teslas are still pretty much a novelty and in a lot of people’s eyes they are a modern day Tucker Car Corporation which plays right into America’s David vs. Goliath/Underdog love affair.

        • 0 avatar
          jkross22

          +1

  • avatar
    jimbob457

    They don’t call it horse tradin’ for nothing. It is an art passed on within a family down the generations. Personally, I enjoy the process. Our author is admittedly a naïf in this arena. So he paid a little bit too much. No biggie.

  • avatar

    Guess what? When those Teslas leave the first hands, you still have to come to a good ol’ scumbag Used Car Dealer, i.e. me.
    *Demonic Laugh*

  • avatar
    brenschluss

    “what is suspension”

    Jeez dude.

  • avatar
    EchoChamberJDM

    There is a used 2013 Model S tesla on the Penske used car website. Been there for well over a month now. Don’t believe the hype, the cars are not in demand used. Elon Musk makes lots of people believe the hype on the new car side, but the used car market is about as “pure” as used can get. Tesla is a used car no one wants. What will Tesla do 3 years from now when they have to “eat” all the guaranteed resale value claims? Oopps, they have no cash left because they spent it all on 2 “gigafactories” to produce lithium ion batteries that are 10 years out of date.

    • 0 avatar
      Vulpine

      Link it, EchoChamber. I want to see all the data on the one at “Penske used car website”.

      Oh, and when did they up it from One to Two “gigafactories”? I think you got a hold of some bad data there.

    • 0 avatar
      Vulpine

      Never mind. I found it. The site is asking $75K for a 60KWH model–that’s $10K OVER the price of a brand new one with 0 miles. No wonder it’s not selling! To quote directly from the site:
      “KEY FEATURES INCLUDE
      >Navigation, Rear Air, Back-Up Camera, Bluetooth, Aluminum Wheels, Remote Engine Start, Dual Zone A/C Rear Spoiler, Keyless Entry, Remote Trunk Release, Child Safety Locks, Electronic Stability Control.

      OPTION PACKAGES
      60 KWH BATTERY, SOUND STUDIO PKG: 580-watt amplifier, Dolby ProLogic 7.1 surround, 16GB hard drive, dual USB ports, HD radio, WiFi connectivity, 17″ touchscreen, (12) speakers. Model S with White exterior and Black interior features a Electric Motor with 362 HP at 6000 RPM*. ”

      Remote engine start? Huh? Really? Outside of that the only non-base-model option is the Sound Studio package–which certainly isn’t worth $10,000.

  • avatar
    jkross22

    Ed,

    Nice job on this article. (grin)

    Cool color, by the way. I’ve only seen black Tesla’s.


Back to TopLeave a Reply

You must be logged in to post a comment.

Subscribe without commenting

Recent Comments

New Car Research

Get a Free Dealer Quote

Staff

  • Contributing Writers

  • Jack Baruth, United States
  • Brendan McAleer, Canada
  • Marcelo De Vasconcellos, Brazil
  • Vojta Dobes, Czech Republic
  • Matthias Gasnier, Australia
  • W. Christian 'Mental' Ward, Abu Dhabi
  • Mark Stevenson, Canada
  • Cameron Aubernon, United States
  • J Emerson, United States