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How will OEMs solve the dealer issue?

Discussion in 'Rumour Mill' started by Bryan Baker, Jul 4, 2017.

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  1. Bryan Baker

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    #1 Bryan Baker, Jul 4, 2017
    Last edited: Jul 4, 2017
    OEMs have a big problem. Assuming they're even willing to put in a full effort to manufacture EVs they still have to rely on dealerships to get serious about selling them, too.

    As unlikely as it is that OEM executives 1) see the need, then 2) stand up to their shareholders and do this, it is even less likely that dealerships will put in any work to get serious about selling them--ultimately putting themselves and their OEMs with them, out of business.

    One of the few encouraging signs are the vague reports that Tesla has finally been "in talks" with an OEM about sharing the Supercharger Network. That's a big step in the right direction.

    But to complete the steps needed... they have to get around the dealership problem.

    Maybe Tesla will become a franchised dealer network for an OEM as well?

    It advances the Tesla mission, and they'd still make money from it--and frankly, w/ a lot less effort. There's already way more demand for (good) EVs than Tesla can supply, and doing this can only increase the demand.

    Whaddya think?
     
  2. SoFlaModel3

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    Personally I don't think Tesla should share the supercharger network. They're about to triple to quadruple their own fleet in short order and they simply don't yet know what strain that will cause.

    As for the dealership issue, I don't think they'll have an issue embracing EVs after the Model 3 handily outsells them.
     
  3. garsh

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    I was thinking the opposite, but for the same reason. :)

    I think Tesla needs to bring on some other OEMs to help pay for supercharger network expansion and upkeep.
     
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    • garsh

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      That would require the Tesla dealership & service network to become a profit-generating part of the business, and Elon has already stated that they don't want it to become that.

      If they want to support wider EV adoption without becoming a dealership for everyone else, they can always have their representatives be knowledgeable about other EVs and suggest those to people if it's a better fit than a Tesla. Doing anything more than that would just be outside of their wheelhouse.
       
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      • SoFlaModel3

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        I have heard some talk about that as a necessary evil to help with growth of the network.

        It is however also a major competitive advantage for Tesla.

        I guess I can see it both ways though. It's not a competitive advantage if they're so packed that you have to wait to use them.
         
      • garsh

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        Tesla also needs to be concerned about some other charging standard becoming more popular in the future. They could probably update current supercharging stations with new software and an updated hardware connector, but then you'd have to make adapters available for owners of older Teslas. It's just easier if the Tesla connector can become the standard for all EVs.

        (I know, the situation is already different in Europe).
         
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        • SoFlaModel3

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          That's a good point!

          It's like HD-DVD vs BluRay or Betamax vs VHS before that. You sir are wise!

          I guess the only company that gets away with it is Apple and their proprietary connections.
           
        • Dgodfrey

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          There's always going to be a disconnect between the Tesla philosophy/mission and all other OEM's. That being the "profit motive". Musk has publicly stated he couldn't care less what Wall Street thinks. Any discussions to enhance the EV highway in partnership with OEM's will ultimately break down once the "not for profit" business model enters the equation.
          The same hurdle as to the dealership dilemma. Any dealership that has any long term vision and understanding of where this is ultimately going will soon realize their days of doing business as usually are quickly coming to an end. We're about to see Darwins theory of Evolution through natural selection in all it's glory cause a mass extinction in our lifetime to what is already an endangered species.
          As to the proprietary charging connections discussion, Red Sage has done a few write ups on this much more eloquent and informed than I could ever do. I suggest searching them out on this and other forums as the politics play a bigger role in that than logical business decisions.
           
        • Badback

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          In the long term, auto dealers will disappear. They are fundamentally unable to shift their business model as they are always bent on doubling down on the status quo.
           
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          • Bryan Baker

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            I would've agreed w/ you before Tesla switched strategy for their Supercharger Network. The new strategy is 1) pay per use, 2) enable for *all* charging, not just long-distance charging, and 3) operate their own convenience stores.

            I'd bet dollars to dog turds they enable other automakers, but charge them more per kWHr than real EVs (Teslas) and becoming a solid source of profit or reinvestment for further improvement of the network. Plus, more buyers at their convenience stores means a lot more of the same.
             
          • Bryan Baker

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            Ah, but is there a way (whether or not they'll find it and take it) for OEMs to survive their dealerships?
             
          • Bryan Baker

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            Yes, but they have stated that they want charge per use by Tesla owners to cover costs. And those costs can vary greatly depending on how quickly they install solar + battery, switch from rental to ownership of the property, and build convenience stores on the property.

            It'd be easy enough for Tesla to keep such charging costs more or less at cost for Tesla owners, but charge more for non-Tesla EVs.

            I think Elon would still feel some guilt over this--in that it would slow the "forcing function" of EV adoption, but it's a business case too compelling to ignore.
             
          • SoFlaModel3

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            Actually they give away 1,000 miles a year worth of charging before it's pay per use.
             
          • Reef Club

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            The Tesla name has great value. At this point all EV manufacturers are compared to Tesla. They should keep building the Supercharger network. When GM or Renault or whoever decides to get serious about EVs in the US, then Telsa should allow them access to Tesla Superchargers in exchange for a fee and require them to equip all their EVs with a Tesla plug. More Tesla charger equiped vehicles, the more the Tesla Supercharger network will grow (and therefore become more valuable) and stop any "betamax" competition. Real question is whether Elon will branch out into motorcycles, golf carts, boats, planes, etc., before some smart person buys his batteries, uses his patents and builds their own electric version.
             
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            • Bryan Baker

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