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by adamqureshi 1557 days ago
The franchise dealer model in the USA maybe coming to an end. “Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars,” CEO Elon Musk writes on Tesla’s site. “It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business.” Tesla also points out that its prices are fixed, and its salespeople are paid primarily on salary, not commission. “Customers will never be rushed into a purchase, haggle over the price of the car, wonder if they could get a better deal across town, or puzzle over confusing add-on products, like GAP insurance or rust-proofing.”We think that it’s absolutely critical that we have a direct relationship with our customers,” Todd Maron, Tesla general counsel, said “We look at our stores as educational centers. There are all these questions people have; we view our salespeople as teachers who can patiently answer them.”
1 comments

The only real conflict of interest is that dealer service centers are often the profit centers of most dealerships, so a 50% maintenance cost reduction[0] will likely translate to declining revenues for the dealerships.

0: https://www.transportation.gov/rural/ev/toolkit/ev-benefits-...

Tesla claims they operate their service centers at cost and the goal is that they are explicitly not a profit center. This is why so many dealerships are disincentivized to sell EVs however. Less maintenance (due to less physical moving parts. No fan belt, no fly wheel, no alternator, no pistons, etc) means less service that can be marked up. The recommended service on tesla's best sellers (the model 3 and model y) is only every two years.
Tesla claims a lot of things that end up being...less than 100% true.