[clyde]

Originally Posted by robg

I think new car sales average some ridiculously low profit margin of around 1%. Either way you to pay for buildings, people, etc. From what I understand, dealers make their money on service and used car sales - which are both areas tesla seems to struggle with while charging high prices and offering low quality. I guess their solution is just to eliminate showrooms almost entirely - which is a loss from a customer perspective.

I like what you did there, "[o]ffering low quality."

I think you're spot on with much of that. Regular dealerships don't make much directly on new cars, but they're what bring in the trade-ins which generate the shit ton of profit when sold as used cars. Without the new cars, the model starts to crumble a bit. The only thing stopping Tesla from making this work is themselves.

I don't know what Tesla does about trade-ins. Do they take them? If so, do they just wholesale them out and kiss all the money they could make goodbye? If they're not making the most of that, it would be another of their stupid choices, like eliminating standing stores and test drives. But whatevs

The franchise dealership model also makes a good bit of money on service, a fair amount coming from warranty work. Warranty work is profitable for dealers, but the manufacturer is the one paying. When the service center is owned by the manufacturer and the employees are paid by the manufacturer, it's not going to make any money from warranty work. The only revenue Tesla service centers will generate will come from non-warranty work.

That's got to be a driving force in their resistance to making it possible for independents to work on their cars. If only Tesla can perform Tesla service, they can charge higher rates, charge more for parts, and essentially, throw a bunch more $f$u$c$k$y$o$u$s at their customers.

Originally Posted by ZBB

Tesla Service does a great job. I've never had anything but fantastic interactions with their service teams, both in AZ and in OH.

I'll take your word for it given the large number of service encounters you've had with them

I don't think Tesla moving to a franchised dealer model will make the experience better overall.

I agree. But the current model seems headed downhill fast and it's picking up speed.