Buy your car in a few clicks

In 2019, many auto pundits claimed that Tesla was making a big mistake by deciding to sell cars only online, arguing that whatever bad feelings people have about dealerships are essential to the automobile trade.

Posted at 4:00 p.m.

Paul Stenquist
The New York Times

But this strategy, adopted by Tesla CEO Elon Musk, which combines direct selling with a limited number of dealerships and service centers, seems to prove the experts wrong. The company dominates the booming electric car market, even as other automakers struggle to sell cars due to a shortage of microchips.

Tesla’s approach, which has been copied by young electric car makers like Rivian and Lucid Motors, could ultimately have major implications for the auto industry. Most car manufacturers and dealerships are currently making big profits as the shortage of new cars has driven up prices for both new and used cars. Still, they might adopt some of the changes Tesla introduced to appeal to shoppers who have become accustomed to buying cars online.

Individuals who have traded in traditional cars for electric vehicles made by Tesla and other manufacturers said they were satisfied with the online shopping experience and would consider buying their future cars from the same way.

Rachel Ryan, who lives near Los Angeles, said buying a Tesla Model Y in 2021 was “the easiest of her life”. “I bought it when my husband was at work. When he got home, I told him he would never drive my van again. »

Mme Ryan said the only service issue she encountered was a nail-punctured tire. “Tesla came to my house to fix it,” she said. For any questions I have, I just have to send an email, and they are on the spot within minutes. »

All types of cars

Buying online is a plus for people looking to buy a Tesla, Rivian, or Lucid car, whose customers can only buy online and directly from the manufacturer. But buying cars online appeals to a large chunk of all car shoppers, even those who buy gas-powered cars through dealerships, said Michelle Krebs, executive analyst for Cox Automotive.

Our data shows that consumers want to do more of the process online, but most don’t want to eliminate the visit to the dealership altogether. They just want the dealership experience to be different – ​​focused on the product, the product features and a test drive.

Michelle Krebs

She said some dealerships began digitizing all or part of the buying process in the early days of the coronavirus pandemic, when showrooms closed like other retail businesses. In Europe, some automakers have gone even further. Daimler, Volkswagen and Volvo sell cars directly to consumers or have announced plans to do so.

American manufacturers also want to make big changes. Ford CEO Jim Farley told an investor conference this month that the automaker’s distribution and advertising costs per car were about $2,000 higher than Tesla’s. Mr Farley said Ford wanted to sell electric cars only online at non-negotiable prices, without having to keep a large inventory of cars at dealerships.

He added that dealerships would remain important, but should become more “specialised”. He compared what’s happening in the auto industry to retail, where the rise of Amazon has forced established retailers to sell more online and use physical stores in new ways.

“It’s kind of like what happened between Amazon and Target,” Mr. Farley said. Target could have disappeared, but it didn’t. They quickly built an e-commerce platform, and they use their physical stores to offer groceries and make returns much easier than with Amazon. »

“Absolutely essential”

Established automakers are unlikely to get rid of dealerships for another reason: State laws often require them to sell cars through franchised dealerships and can make it difficult or impossible for automakers to deal directly with customers.

Tesla lobbied state lawmakers to change laws governing auto sales and won in many places to allow the company and other automakers that have never had dealerships to sell cars directly to customers.

The National Automobile Dealers Association (NADA), which represents dealers, has long opposed direct car sales and has urged lawmakers to require Tesla to use dealers, arguing that dealers are essential to automotive industry and local economies. They also said Tesla’s approach was far less convenient for car buyers and owners.

“Franchise dealerships are absolutely essential to the widespread adoption of electric vehicles in the United States,” NADA spokesman Jared Allen said in an email. And as more traditional automakers enter the electric vehicle market, “selling effectively to these mass-market customers requires leveraging – not rejecting – the existing network of franchise dealerships,” he said. he adds.

“We’re the face of the automaker in every small town in America,” former association president Bill Fox told AutoGuide.com in 2015.

Dealerships aren’t the only ones to criticize Tesla. Some Tesla owners complain that fixing or correcting their car’s problems can be an ordeal.

The automaker operates about 160 service centers in the United States, far fewer than more established companies — Chevrolet, for example, has more than 3,000 dealerships nationwide. Tesla is committed to sending a technician to customers’ homes for minor repairs, but larger issues should be handled by service center mechanics.

Scathing video

James Klafehn, of Ithaca, NY, hosts a YouTube channel dedicated to electric vehicles and related topics. He bought a Tesla in 2019 and posted videos documenting how difficult it was to get various issues fixed, as he lives hours away from a Tesla service center.

In an October 2019 video, he was scathing about problems with his Model X sport utility vehicle, which had a hole in a panel and a gash in a door weatherstrip. “I’m not thrilled with the idea of ​​making this video. I dreaded it, hoping something positive would happen, he said. Unfortunately, five weeks after acquiring the Model X, the Tesla service experience was very poor. »

Tesla did not respond to a request for comment.

Other owners who live far from Tesla service centers say distance hasn’t been an issue. This can be explained by the fact that electric cars tend to require less maintenance than gasoline-powered vehicles.

Other new electric car makers, like Rivian and Lucid, have even fewer showrooms and service centers than Tesla. Rivian has 19 in the US, and Lucid only has 10 (7 more are expected to open this year). That hasn’t deterred tens of thousands of people from booking cars made by the two companies.

Like Tesla, both automakers offer to send technicians to customers’ homes for minor repairs and say major repairs will be done at service centers. To allay the fears of buyers who think more major mechanical work might prove tedious, Lucid goes so far as to promise free transport to the nearest service center for cars in need of major repairs.

This article was originally published in The New York Times.

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