In a blog post in 2012, Elon Musk laid out his reasons why Tesla prefers to sell direct to the public. “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,” he wrote. “It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional business.”
Aside from Tesla, there haven’t been many long range pure electric cars from other manufacturers until recently when GM’s Chevy Bolt was announced. However, the Bolt is being rolled out slowly. The first cars began appearing in California showrooms late last year. The Bolt is currently available in 7 states and won’t be available in all 50 states until later this year.
According to pricing on TrueCar, the Bolt is already being discounted by dealerships. In January, the average discount was $1,400 which quickly rose to $2,200 in February. Discounts of up to $5,200 are available at one California dealer, but in those states where the Bolt has gone on sale and selection is limited, other dealers are charging up to $5,000 over sticker. Rather than actually educate customers about the advantages of the all electric Bolt, dealers are treating them as just one more car on lots filled with pickup trucks, SUVs, and conventional sedans.
100 miles south of San Francisco, Greenwood Chevrolet is advertising discounts of between $2,000 and $3,000 this month. Marty Greenwood, managing partner of the dealership, tells Automotive News, “We’re here to sell cars, and we’re in a smaller town, so we need to be a little bit more aggressive,” Greenwood said. “We just watch the market and what’s going on out there. What is the magic number to move the vehicle?”
In Long Beach, California, Sergio Navarrete, the sales manager at Harbor Chevrolet, says, “We price every single vehicle in inventory to move. Our business model is more geared toward volume vs. any one sale. Per unit we make less, but long term it works out better.”
There’s not a lot Chevrolet can do about such tactics. Thanks to dealer franchise laws, factories have far less control over dealers than they might like. Jim Cain, a spokesperson for GM, says, “If somebody’s marking them down, it’s coming out of their margin. Dealers are independent businesses, and capitalism at work tends to drive local market pricing.” He adds that GM discourages dealers from marking up scarce models but can’t stop them from doing so.
Tesla has a big advantage over other automakers because of its direct to consumers sales model, but also because it sells a single type of vehicle – electric. There’s no conflict of interest with selling vehicles of other types, as profits are not tied to them. The Tesla buying experience is quick, easy, and painless. The staff at Tesla stores are there to educate consumers and answer questions, not to sell cars.
Chevrolet thinks the Bolt is a competitor to the Model 3, but fails to appreciate that the sales experience is a significant factor for many buyers. That gives an important advantage to Tesla.
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Too many of the electric vehicles you see in California are simply compliance designs. Mostly consisting of odd or outright weird car designs that don't attract most of the buying public. This is on purpose. The GM Bolt falls within the compliance classification. Inside the US it will never be built in large numbers. (..)[/QUOTE]
Agree. Some have rightly referred to it as an 'econobox'... ;)
[QUOTE="Tesla Bargain, post: 4248, member: 7730"]No it can't, because they make sure to supply only a ridiculous number of vehicles to other markets, see here.
GM made it crystal clear that the Bolt is a compliance car and that they are loosing money when sold in non-ZEV states, so there is no incentive at all to export to countries where GM doesn't benefit from the ZE status.
You're probably right if they can't find a way to reduce the cost via economy of scale enable by large potential sales in China where they would brand it as Buick... :D (Lightning?! :p)
Yet, joke aside, I don't believe it either...
Down with Detroit, their dealership network and their monopolistic attitudes.
One point to add: "bait and switch."
Dealers and sales staff are not using complex sales techniques. They will use bait and switch.
The Bolt is a draw card to get people to come to the dealership. Once the consumer is in the trapped environment, the dealer has a chance and will do a lot to keep the customer in the building and the last thing they want to do is let you leave with an order for a Bolt to show up in a few weeks while you cool off.
A customer coming in to tire kick the Bolt will start explaining their objections and their criteria. This informs the sales management (using microphones (not microwave ovens) and cameras on the floor and in the cubicles and sales offices to listen to conversations and watch people ... and record video of signatures and consent to waivers, etc.)
The sales staff are given a simple set of tricks -- price is higher than the same equipment in another model, electric is a hassle or you live in a condo, so charging is frightening, or you want something bigger for less and can drive a long way on the saved money. Then a trivial discount on a similar fossil fool vehicle and a cheap finance "you can afford this per month ... that's $200 a month for gas ... cheaper than the electric" and the dealership sells the deal with the most profit, not the deal that's best for the consumer's needs.
We then went to the body shop near our mechanic's place. They had a Kia Spectra5, in blue, with a bent quarter panel and front bumper. The damage was fixed, the car detailed and they even swapped a set of sports tires/wheels onto the car. For about $2000 under book.
When we purchased our last car, my wife wanted to "shop". At the first dealership we told the salesman exactly what we were looking for (according to their website they had three vehicles that would have worked), our maximum price and that we would be paying cash. He was dressed as a used car salesman should be right down to the checkered pants. He started waving his hands telling us to look around and see what we liked. He followed that up with a song and dance about long-term financing to get the payment down. We headed for our car, he RAN after us and waved the manager over. The manager wanted to know what the problem was, I repeated what we had told the salesman and the line of BS he was feeding us. As we were backing out, the idiots tried to block us in to "discuss things".
We then went to the body shop near our mechanic's place. They had a Kia Spectra5, in blue, with a bent quarter panel and front bumper. The damage was fixed, the car detailed and they even swapped a set of sports tires/wheels onto the car. For about $2000 under book.
Wow!!! Used cars are quite a difficult thing, we always like to go to places where we have an existing relationship- otherwise it feels like they are ripping you off at every corner and trying to guide you to certain vehicles! I really like what Tesla has been able to do with their CPO program- controlling the sales process over the lifetime of the vehicles. - controlling in a good way ;)
Outside the US it could sell in far greater numbers. Example China.
No it can't, because they make sure to supply only a ridiculous number of vehicles to other markets, see here.
GM made it crystal clear that the Bolt is a compliance car and that they are loosing money when sold in non-ZEV states, so there is no incentive at all to export to countries where GM doesn't benefit from the ZE status.
