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It could definitely be argued that traditional automotive dealerships are hit or miss; there are some first-class dealerships and a fair amount of duds. Tesla Motors chief executive officer Elon Musk knows this situation presents itself all too often in the automotive industry and would like Tesla's dealer network to stand above the mess. So far, Tesla has taken steps to avoid the pitfalls of traditional dealerships by eliminating privately-owned stores, but Musk has higher goals in sight.

While owning each dealership should help ensure consistent service, Tesla wants to go even further by following the approach used in the Apple Stores. Apple staffs all of its stores with product specialists, aka "geniuses." The geniuses help customers buy products that meet their needs and make buyers feel good about their choices. This is a key goal for Tesla, which feels that it has a special product to offer niche buyers and the company's global network of Tesla stores is small, as is the annual sales volume of the Roadster. This low-volume allows each Tesla store to focus on the customer, Musk says, adding, "The customer feedback has been really positive, close to how Apple customers view their product." Reaching the almost god-like status of Apple will not be easy, but we don't doubt that Elon Musk, the 2010 Automotive Executive of the Year Innovator, has the drive and determination to try and get it done.



[Source: Ward's Auto]


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  • 31 Comments
      • 4 Years Ago
      Well, call me a optimist. I plunked down 42k on a little Yaris EV so you know I will have no qualms on purchasing the model S when it comes out for 50k. I will be dumping my gas cars to do it.

      Will Nissan be successful in meeting their ambitious targeted sales by 2013? Will Tesla survive to produce the model S? Well, after all the green washing, bull shit ICE auto corps have let us down over the years, who knows? I have only been keeping track since 2007. Tesla has delivered so far and I for one can not bring myself to bad mouth them. VW, Audi, Daimler, GM, Ford, Chrysler, Fiat, Volvo, BYD, Toyota are all a bunch of green washing bitches where EV's are concerned. Mitsubishi I am angry with for even attempting to sell their 60 mile range car for 40k, talk about soaking early adopters! Nissan is soaking early adopters also. I know they can produce a EV for less than 32k with mass production. When the tax incentives are gone, we will all find this out. However both Mitsubishi and Nissan are producing EV's and I can hardly fault them for doing the early adoption raping on price because everyone does it on any new technology.

      I won't invest in Tesla's corp because as Lad indicated, I do not want to mess around with wall street and their sure thing. Screw those ass hole wall street scam artist.
      • 4 Years Ago
      Martin Eberhard gave a very compelling reason for *never* using a dealer network: in most states and in Canada, dealerships cannot be closed and can be inherited from one generation to another in perpetuity.

      So basically, if Tesla use dealerships, they will loose control of their sales channel, the same way Apple did when it relied only on third party Mac stores and resellers.

      There's a transcript of Martin's talk on the subject on the GimmeGimmeMyEV blog:
      http://gimmegimmemyev.wordpress.com/2010/02/03/tesla-stores-the-real-story/
        • 4 Years Ago
        And you cut out the middlemen and encourage internet sales. If you don't own the dealer you are splitting profit margins. Car dealerships as they exist with hundreds of cars sitting, rusting on lots are dinosaurs and doomed to extinction.

        The smartest way to run a manufacturing supply chain is to build on demand, you cant have too much money tied up in inventory and unsold products. That way you can quickly update the product line without needing to do year end sales where you sell last years product at cost. Tesla is smart, only one vehicle model, each store has a handful of demonstration models.
        • 4 Years Ago
        @kathy:

        I have visited a Tesla store, and that's exactly what they told me.
        • 4 Years Ago
        @ Jason

        None of what you said is true in any way, whatsoever. Visit a Tesla Store and find out for yourself.
        • 4 Years Ago
        @paulwesterberg:

        Most of the cars in the Tesla stores aren't just demo models, they're actually people's vehicles that haven't been delivered yet. Each vehicle has some showroom time built into the wait time the owner is quoted for the vehicle. That's why when you go to a Tesla store, there's no way you're gonna get to test drive one...
        • 4 Years Ago
        paulwesterberg said, "The smartest way to run a manufacturing supply chain is to build on demand, you cant have too much money tied up in inventory and unsold products."

        Precisely why I worry about Nissan and Goshen's gamble. Hey that would make a great headline. "Goshen's Gamble"
      • 4 Years Ago
      Except they won't have any customers lined-up to buy products. Or very many customers at all.
        • 4 Years Ago
        What you see here is part of the hype leading up to their IPO; Wall Street makes loads of money off IPOs and they have had a successful formula for a long time. All the insiders get in on the pre-selling before the stock is issued. You, as the sucker must wait until the release and really is the one who bets on the stock. Wall Street and the investors have the sure thing.

        The true worth of an automobile company is based on how many cars they produce and sell. I don't see Tesla with a high value because their products must compete with the high end market for electric cars against Mitsubitsi, Nissan, and the other makers who have priced their cars for the middle-class buyer. This makes them a pure nitch market speculation...no record of performance. I don't know that there are that many buyers for $50,000 sedans and $110,000 sports cars. Tesla owes the American people $350,000,000 and their investors are in debt up to their ears. This IPO will assure that the investors and management, currently underwater, will surface on your buck
        • 4 Years Ago
        Owch...
        Well, it's pretty true. ~1000 sales in 3 years? Even the dumpy, overpriced SMART car is moving about 250 units a month last time i checked... bad reputation, driving characteristics, and all.
      • 4 Years Ago
      Excerpt from the New York World


      Telegram, July 11, 1935 -

      Nikola Tesla revealed that an earthquake which drew police and ambulances to the region of his laboratory at 48 E. Houston St., New York, in 1898, was the result of a little machine he was experimenting with at the time which"you could put in your overcoat pocket." The bewildered newspapermen pounced upon this as at least one thing they could understand and Nikola Tesla, "the father of modern electricity" told what had happened as follows:
      Tesla stated, "I was experimenting with vibrations. I had one of my machines going and I wanted to see if I could get it in tune with the vibration of the building. I put it up notch after notch. There was a peculiar cracking sound. I asked my assistants where did the sound come from. They did not know. I put the machine up a few more notches. There was a louder cracking sound. I knew I was approaching the vibration of the steel building. I pushed the machine a little higher. "Suddenly all the heavy machinery in the place was flying around. I grabbed a hammer and broke the machine. The building would have been about our ears in another few minutes. Outside in the street there was pandemonium. The police and ambulances arrived. I told my assistants to say nothing. We told the police it must have been an earthquake. That's all they ever knew about it."

      Some shrewd reporter asked Dr. Tesla at this point what he would need to destroy the Empire State Building and the doctor replied: "Vibration will do anything. It would only be necessary to step up the vibrations of the machine to fit the natural vibration of the building and the building would come crashing down. That's why soldiers break step crossing a bridge."

      "On the occasion of his annual birthday celebration interview by the press on July 10, 1935 in his suite at the Hotel New Yorker, Tesla announced a method of transmitting mechanical energy accurately with minimal loss over any terrestrial distance, including a related new means of communication and a method, he claimed, which would facilitate the unerring location of underground mineral deposits. At that time he recalled the earth-trembling "quake" that brought police and ambulances rushing to the scene of his Houston Street laboratory while an experiment was in progress with one of his mechanical oscillators..."


      Nikola Tesla waited 37 years to brag of this incident in 1898, but the very next year in 1899 he dropped everything an went out west to Colorado Springs.
      Nikola Tesla caused the September 1899 Cape Yakataga and Yakutat Bay earthquakes in Alaska from Colorado Springs.
      On...
      September 3, 1899
      September 6, 1899
      September 9, 1899
      "If you only knew the magnificence of the three, the six and the nine...
      then you would have a key to the universe."
      -Nikola Tesla
      (AFTER CAUSING THREE EARTHQUAKES)

      It has been a 111 year non correlation between his Pike's Peak work and the story of eight
      prospectors were panning the glacial sands near Hubbard Glacier when Earth starting shaking and never seemed to stop. A few days
      later, they had survived a natural phenomenon they probably should not have. The shore uplifted during a massive 1899 earthquake near
      Yakutat. The Earthquakes at Yakutat Bay, Alaska in September, 1899. Geologists Ralph Tarr and Lawrence Martin, in the area a few years
      later to study the marvelous glaciers, saw things like mussels "resembling clumps of blue flowers" on rocks thrown up 20 feet above the
      ocean. They saw so much evidence of a giant earthquake they interviewed a few prospectors in Yakutat and included their stories in a
      1912 government paper, "The Earthquakes at Yakutat Bay, Alaska, in September, 1899. When Tarr and Martin arrived in Yakutat,
      prospector A. Flenner was working as a carpenter there six years after the series of large earthquakes, the biggest being a magnitude 8.0
      that happened on Sept. 10, 1899. Flenner had been panning for gold in the area that day. "Mr. Flenner stated in 1905 that after the first
      shock on September 3 they rigged up a home-made seismograph, consisting of hunting knives hung so that their points touched and
      would jingle under a slight oscillation," Tarr and Martin wrote. "With this instrument (rude, perhaps, but more delicate than their own
      perception) they counted 52 shocks on September 10, up to the time of the heavy disturbance (the 8.0 earthquake) that caused so much
      damage." Another miner, L.A. Cox, was also at the scene. "About 9 a.m. on the 10th we had a very severe shock (what USGS later
      calculated as a magnitude 7.4 foreshock), so violent that one could hardly keep his feet," Cox said. "The low alder
      • 4 Years Ago
      "I don't know that there are that many buyers for $50,000 sedans and $110,000 sports cars. Tesla owes the American people $350,000,000 and their investors are in debt up to their ears."

      Absolutely right. Anyone who can afford these cars is some kinda thief. No one who has this kinda money is honest. Rich people have stolen what they have from others and haven't worked a day in their lives. Anyone who is rich is a lazy, fat thief, but I don't hold that against them.

      Musk however is a conniving shyster who has bamboozled the government into loaning them the peoples money. IPOs are for rich people who hate poor people and rig the game to steal legally. Nyet.

      People should take their money back and buy electric bicycles for young and old. That would be more fair.
        • 4 Years Ago
        Hold on there chief! Every rich person is a thief? What kind of logic is that? I know plenty of rich people who are honest and have worked most their adult life to get a little cushion for their old days and/or their children.

        Also, just because someone buys a Tesla doesn't mean that they are multi-millionaires. People like Chris Paine and Linda Nichols had been waiting for years to get an EV and saved for it. They just have different priorities.

        You may not like the capitalist system as it's not always fair, but it's the best one we found so far.
        • 4 Years Ago
        We get it,you hate successful people.
        • 4 Years Ago
        Simply spoofy. You sound almost like Comrade letstakeawalk.

        I like the bike idea, except for the part where tax money pays for your ride.
        Hopefully, eBike prices will gradually get into affordable territory. I'd like
        my daughter, on her spread-out college campus to have one of those, or
        an electric skateboard. I haven't found a model I like yet. Most of the
        affordable ones have heavy Lead/Acid, which makes the bike unwieldy,
        especially for a smaller person.
      • 4 Years Ago
      Some states require new cars be sold through independent dealerships, without exception. I've read that Texas is one such.
      • 4 Years Ago
      Comperable to an apple store... So what is it like staffed by a bunch of pretentious teens and 20 somethings with purple hair obsessed with shiny white plastic?
        • 4 Years Ago
        Oh, soo tasteful, and ohh soo expensive!
      • 4 Years Ago
      What you see here is part of the hype leading up to their IPO; Wall Street makes loads of money off IPOs and they have had a successful formula for a long time. All the insiders get in on the pre-selling before the stock is issued. You, as the sucker must wait until the release and really is the one who bets on the stock. Wall Street and the investors have the sure thing.

      The true worth of an automobile company is based on how many cars they produce and sell. I don't see Tesla with a high value because their products must compete with the high end market for electric cars against Mitsubitsi, Nissan, and the other makers who have priced their cars for the middle-class buyer. This makes them a pure nitch market speculation...no record of performance. I don't know that there are that many buyers for $50,000 sedans and $110,000 sports cars. Tesla owes the American people $350,000,000 and their investors are in debt up to their ears. This IPO will assure that the investors and management, currently underwater, will surface on your buck.
      • 4 Years Ago
      I'm of two minds on this. I remember the 90s, when dusty, crashed Macs languished unsold in stores because the salesmen didn't know them and made higher margins pushing PCs. After many efforts to fix this Apple gave up and created its own retail stores.

      Many people, especially women, dread buying cars, with the high-stakes haggling, deceptive practices, etc. A no-haggle/no-hassle policy is much easier to do with company owned dealerships.

      Sounds obvious - automakers should sell only through company stores, right?

      There is a problem though - cars are the second most expensive item people own. At that level, differences in geographic area, cost of living, local income levels, can really affect profit margins. Does it make financial sense to sell a car for the same price in Beverly Hills as in Little Rock? Maybe not. If not, who will do a better job deciding the price in each area, avoiding the twin hazards of turning away customers and of failing to maximize revenue -- company headquarters a continent away or a local businessman intimately familiar with the area economy and with a personal stake in a successful outcome?
        • 4 Years Ago
        Apple still sells through some independent retail outlets, most notably Best Buy and Fry's Electronics. Those stores did a good job of marketing, and they liked the high margins from Apple.

        Apple opened their own stores mainly to get more money for themselves, and to sell away from the competition that was just as innovative but often less expensive.
      • 4 Years Ago
      owning their own fast recharge points at key locations would be good too.
      like all the way up and down east and west coast usa. and new york to detroit to chicago. key routes like that.
      even though a fast tesla charge is 2 hours that makes a big difference in appeal.
      drive 3 hours, 2 hour truck stop, drive 3 hours more, then you are either there, do a stint more or call it a day. should be workable for many.
      it's not a cannonball race but beats walking home.
        • 4 Years Ago
        nah apple products are designer fluff for the masses. the tesla roadster changed the world.
        • 4 Years Ago
        Yeah, Diners will have specialized chargers for Teslas out front because Diners match the demographic of Tesla drivers.

        Maybe charging stations should be in front of Apple stores because of the same demographic... overhyped and overmarketed products that people jbuy just because it makes them feel special.
        • 4 Years Ago
        that would be nice but can the cars handle that? has it been done?
        • 4 Years Ago
        Their 240 volt 70 amp home charger does the job in under 4 hours, but the fast Tesla charger will do it in under an hour, in most cases under 45 minutes. That could mean a traveler could stop at a diner with a "Tesla Park & Charge" lot, plug in, grab a bite to eat and be ready to go an hour later.
      • 4 Years Ago
      What are they going to recommend colors?

      Tesla better hurry up on that Model-S because Porsche will syphon off sales if they produce that Hybrid roadster*

      *Yes i know they'll still be people looking for electric only cars, but the Porsche will be green and it'll have the Porsche brand name attached. Right now Tesla is unoposed in the environmentally friendly roadster segment.
      • 4 Years Ago
      Too much overhead. Any first year MBA student can see that.

      I agree with above. Hype to prime the IPO.

      They are better off making a deal with established high tier dealer
      outfits in upscale locales like Newport Beach, CA and Palm Beach, FL.
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