By Desiree Homer
While some automakers have put their EV innovations on hold, for now, Tesla has continued to surge forward. Recently, Elon Musk was able to secure permissions from local officials to reopen its production facilities in Fremont, California. Tesla is full speed ahead on opening all of its facilities right now. And the word is, it’s getting back to its pre-Coronavirus growth plan with expansion efforts and the opening Tesla stores. The last thing dealers may want to deal with right now, as they crawl back to sales and profits, is a neighborhood Tesla store competitor.
The Original Tesla Growth Plan
Before Coronavirus hit, Tesla was the talk of the industry with its various conflicts with states and the opening of its Tesla stores. The EV innovator has 135 ‘galleries’ across 29 states already (listed on its website) and had plans for Michigan-based expansions before the pandemic hit. Worldwide, it has more than 430 service centers and store locations, so Tesla’s footprint has taken hold. Some states, including Louisiana and Connecticut, are still banning Tesla from selling, while only allowing its service centers to operate. Elon Musk continues to lead the charge in fighting those states, like New Mexico and South Carolina, where bans of Tesla sales galleries and service centers are still in place.
Why the Tesla Sales Model Is Disruptive
The traditional automaker and franchise platform provides a channel of new vehicles to the local market, via the local dealership business. When Tesla hit the stage with its groundbreaking fleet of electric vehicles, it also looked to disrupt the existing funnel used to get cars to market. Instead, Tesla wants to sell and service its vehicles to consumers directly. In doing so, Tesla is embarking on a quest to compete in what dealers consider an unfair and biased experience. Instead of relying on franchise dealers to move the vehicles, the automaker takes on the engagement directly. Meaning local dealerships won’t be able to compete.
Dealers Should Prepare
Tesla is moving forward with its original growth plans. The EV automaker is opening its first stand-alone gallery in Michigan, where it began service center operations in March, but hadn’t welcomed sales customers just yet. Dealers should prepare, not only for reopening in a post-COVID environment but also to potentially compete with any Tesla galleries slated for launch in the local market. Not all customers, of course, are going to race out and buy a Model X over the next week. However, dealer owners should review their original playbook for knowing their local customers and preferences. Cheryl Miller, the Vice President of Operations for Dealertrack, says moving forward means, “knowing your customer is now part of compliance.” Hear more of Miller’s advice in a recent Dealer News Today podcast, as she discusses her experiences at the helm of Cox Automotive Retail Solutions’ F&I business.
As Tesla moves forward with its growth plans, dealers are reminded that while the landscape has changed for operations, the same competitors are still around the corner. Preparing for customers in the coming weeks means knowing your local base, including preferences and market trends. Don’t let your guard down on the EV movement. But focusing on meeting the needs of your customers may just be the competitive advantage you need to win.
