
Tesla Motors says car dealers are trying to hinder its sales - w1ntermute
http://www.mercurynews.com/business/ci_24134024/tesla-motors-says-car-dealers-are-coordinating-efforts
======
brownbat
California car dealers accuse Tesla of misleading sales techniques? Is that
really the best move for them?

Maybe Tesla should hire Ian Ayres[1] as a consultant, give him a team to go
around the country exposing misleading and aggressive sales practices at
dealerships.

[1] The Ian Ayres who uncovered systemic discrimination in auto sales for the
Harvard Law Review:
[http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?artic...](http://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=2539&context=fss_papers)

~~~
300bps
Have you seen the calculator on Tesla's web site? I saw it several months ago
and my reaction was that it was a load of crap. I'm a huge fan of Tesla's and
the sooner car dealerships go extinct the happier I will be. But there's
something wrong about that calculator.

Check it out for yourself:

[http://www.teslamotors.com/true-cost-of-
ownership](http://www.teslamotors.com/true-cost-of-ownership)

Any reasonable person would see that page and think they can get a Tesla for
$601 per month. But that's the "Effective Monthly Cost". The actual monthly
cost for the lowest cost model is $980 per month for a 6 year loan. Seriously,
a 6 year loan?

Honestly, they don't even need to do this. The people buying a Tesla now
aren't shopping for a car strictly on price and they're smart enough to not be
fooled by such gimmicks.

~~~
LanceH
I don't know, "Estimated Payment" is pretty clear at $980 a month, just below
effective cost.

~~~
300bps
_I don 't know, "Estimated Payment" is pretty clear at $980 a month_

I disagree. $601 per month is in bold almost-black and on my screen is about
115 pixels wide. $980 per month is in dark gray on gray, not bold and on my
screen is about 82 pixels wide. In addition, the $601 per month has right
under it a giant red button that says, "ORDER" which strongly conveys the idea
that you are ordering a car for $601 per month.

Then consider even the $980 payment is pretty silly. It's for a 6 year loan.
Who gets a six year loan? My opinion is that Tesla is engaging in very
misleading tactics here and it tarnishes my otherwise very high opinion of
them. I guess there must be a population of people that would reject a car
immediately if they saw that it cost $1,157 per month after putting 10% down
on a 3.30% five year loan. I guess the person is supposed to initially think
they can afford it, fall in love with it, then find a way to make the numbers
work? I have no idea.

~~~
greedo
From the link below, 17% of the loans in the last quarter of 2012 were longer
than 73 months...

[http://online.wsj.com/article/SB1000142412788732364660457840...](http://online.wsj.com/article/SB10001424127887323646604578403191117526644.html)

------
Tarang
Bypassing car dealers is quite important. I don't think its to to screw
dealers over but to make sure margins are needed to make their car for the
masses, especially being so nascent with the different parts required. I hope
this is successful for the prospect of close to $0 marginal cost of travel.

~~~
300bps
_I don 't think its to to screw dealers over but to make sure margins are
needed to make their car for the masses_

It's also because they're completely unneeded for many transactions. I walked
into a Nissan dealership utilizing USAA pricing and a cashier's check. It
still took FOUR HOURS to drive out with the car. I had to wait two hours just
for the "finance guy" even though I wasn't financing anything. I threatened to
leave the entire time - I still had to talk to him and he had at least 7
people in front of me in line that were financing.

How refreshing would it be to research a car, test drive a car, purchase a car
without all these shenanigans meant to upsell you into ridiculous things?

~~~
slouch
The only way franchises make money is on the backend and service, so the quick
transaction you want is a loss for them. It's interesting, because getting you
out the door without using their employee's time is probably the best way to
handle you, but habits.

------
coldcode
Car dealers these days are often large conglomerates that go out of their way
to ensure dominance. I bought a car from one dealer which was surrounded by 5
other dealers all owned by the same national group. I think that's real common
today. Oligarchy is the new monopoly.

------
scriptproof
Tesla is the new Tucker. Hope it will be more successful.

~~~
joezydeco
Tucker shipped less than 100 cars, so I think Tesla can say they are more
successful than Tucker.

~~~
mikeyouse
Mostly for my own curiosity, I looked at total domestic auto sales when Tucker
was producing as compared to today to get a proportion of sales for each
company.

Tucker closed in 1949, when about 7mm cars were sold in the US annually. [1]
So Tucker's 51 cars produced, out of 7mm total leaves them with a .0007%
market share.

Tesla sold 2,650 cars in the US in 2012 [2], while there were 14.5mm total
sold [3]. Tesla therefore had a .018% market share.

Tesla is at least 25x the company Tucker was!

[1] -
[http://en.wikipedia.org/wiki/American_automobile_industry_in...](http://en.wikipedia.org/wiki/American_automobile_industry_in_the_1950s#Production_by_year)

[2] -
[http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets](http://en.wikipedia.org/wiki/Tesla_Model_S#Sales_and_markets)

[3] - [http://news.thomasnet.com/IMT/2013/01/10/u-s-auto-sales-
hit-...](http://news.thomasnet.com/IMT/2013/01/10/u-s-auto-sales-hit-5-year-
high-in-2012/)

