Model S P100 D in a
Tesla store in Cherry Creek Mall in Denver.
AP Photo/David Zalubowski
- Car dealerships are known for haggling and markups, especially in the era of short supply.
- One Wall Street analyst recounted his recent efforts to buy a new truck that almost left him paying thousands above sticker price.
- At Tesla, he said, the process would have been as easy as Amazon Prime.
Longtime Tesla bull Adam Jonas went car shopping recently and discovered firsthand what many Tesla fans have long adored about the automaker: Buying a Tesla is a lot easier than shopping at a traditional car dealership.
The Morgan Stanley analyst said he got the typical dealership treatment when he went to an unnamed brand’s sales lot.
After calling ahead to confirm the truck he wanted was in stock — but in short supply — Jonas also asked to verify the dealer would let it go for the asking price, he said in a note to clients Wednesday. But when he got there, he was shocked to discover the salesperson was ready to ask for thousands above the vehicle’s suggested retail price, as is routine at dealerships these days.
Luckily, Jonas had done his homework.
“I took a deep breath and said very slowly: ‘You know, I thought this might be a problem,'” Jonas said., “And handed him my phone with the screen shot clearly showing the dealer price = to MSRP for this exact stock number. He looked down at the phone and with a straight face said: ‘Ok, then I guess that’s the price.’ I asked him: ‘Look, I get it. You’re just doing your job. But is how the process really works?’
It’s an experience nearly every car buyer has experienced, especially in an age where incentives and discounts are scant. In this instance, it left Jonas pining for Tesla’s eventual Cybertruck (assuming the forthcoming product could replace whatever he was in the market for).
“Tesla’s sales process is a competitive advantage: While a lot of attention this year has been paid to Tesla’s frequently changing prices, within one region, all consumers pay the same price for the vehicle,” Jonas said. “There’s no haggling. No arbitrage between stores. It’s a smooth process that is creating an increasingly visible discrepancy between the legacy car buying experience and the Tesla experience.”
What’s more, Jonas says Tesla’s ownership of the entire product sales cycle — from design and production to sales and delivery — makes the “shopping experience as easy as Amazon Prime.”
Of course, there are advantages to the dealership model that have benefitted legacy automakers for decades. They don’t have to hire or train sales staff. They can mark a car as sold as soon as it hits a dealer lot — and therefore avoid the gap between production and sales that sometimes plagues Tesla at the end of a quarter. They’re also a ready-to-go network of service centers and charging stations for EVs.
But times are changing. As Tesla and other startups focus on direct sales — and Americans fall out of love with dealerships and their tactics—automakers have hit friction with their own dealers.
Ford, for example, had to tell its franchisees last year to commit to electric vehicles, without negotiations or markups, or leave the network altogether.
“We want to work with our dealers, but there are certain things our customers want that are non-negotiable,” Ford CEO Jim Farley said at the time.
