Sources: Tesla Wants Back in Dealership Game, Seeks Loophole
Electrek reports Tesla CEO Elon Musk wants to open ‘Tesla Centers’ around the U.S., once again challenging rules against direct-to-consumer sales. Sources say the firm’s Electric division could provide a workaround.
Tesla CEO Elon Musk reportedly plans to erect “Tesla Centers” throughout the U.S. in a bid to move the electric carmaker closer to its 100,000-unit quarterly sales goal.
(Bobit) — Sources have told Electrek’s Fred Lampert that electric carmaker Tesla Inc. plans to open retail locations in every major U.S. metro market. The so-called “Tesla Centers” could open before the end of 2019.
The move would reverse a March decision to abandon any pretense of operating a network of physical showrooms. But it would be only the latest attempt by the California company and its CEO, Elon Musk, to skirt state-level laws restricting new-vehicle sales to independently owned and operated franchises.
Read: Musk Taunts Dealers as Tesla Shutters Stores
Last month, reports surfaced that Musk told employees the manufacturer’s current reliance on online ordering was unsustainable.
“Amazon would go bankrupt if they would have to wait for customers to be ready to take delivery before shipping,” Musk reportedly said in a conference call.
The latest news follows Tesla’s third-quarter sales report. The factory sold 97,000 vehicles worldwide, a record high but 3,000 short of its quarterly goal. Executives said those 3,000 units were ordered and ready to ship but logistical issues prevented them from reaching their buyers.
It is speculated Tesla Centers could ostensibly focus on the company’s Energy division and offer the option to learn more about and place orders for Tesla vehicles.
To solve that problem, Musk wants manufactured units to flow through delivery centers, sources say. But he would have to find a loophole to sell directly to consumers.
It is speculated Tesla Centers could ostensibly focus on the company’s Energy division, which produces solar panels, solar roofs, and the Powerwall home battery, and offer the option to learn more about and place orders for Tesla vehicles.
If those vehicles are held in inventory and delivered at Tesla Centers, a legal challenge from dealer associations will inevitably follow.
“We are getting information that shows Tesla is able to sustain some very strong demand right now and they are making moves to keep that going,” Lampert wrote. “… The automaker is going to focus its efforts on streamlining the delivery process and reducing lead times in order to try to achieve another delivery record this quarter.”
Originally posted on Auto Dealer Today
More Compliance
Dueling Banjos in the Car Biz
Reports and accounts at variance show auto dealers’ trust profiles have risen in many consumers’ minds but that there remains a need for greater transparency by some.
Read More →
NADA and the Miracle on 34th Street
Automotive dealers should follow the National Automobile Dealers Association's consumer-friendly guidelines in order to minimize their legal risks.
Read More →
Another Look at a Recent Data Breach
Get caught up on the most pressing legal and regulatory matters facing dealers and F&I professionals, including data security, shotgun purchases, and inconsistent payment quotes.
Read More →
The Best Thing a Dealer Can Do to Avoid Legal Problems
Citing the issue is a strategy borrowed from the legal field itself.
Read More →
Fines of the Times
Civil penalties for noncompliance with federal auto retail and finance rules and regulations can add up quickly. Use this checklist to cover your bases.
Read More →
Goodwill and Car Dealers
A dealer goodwill tale is a cautionary tale worth paying attention to.
Read More →
The Regulatory Empire Is Striking Back
President Trump - entropist and corporate disruptor in consumer law
Read More →
How to Clear a Red Flag
Refine and enforce your dealership’s FTC-mandated ID theft-prevention program to ensure no transaction goes awry.
Read More →