If you haven't heard already, Tesla was in a world of hurt after reporting its Quarter 1 sales. In fact, the pain was so great that some could say it almost became the Titanic with a series of unfortunate events including sales reported lower than expected, missed essential tax credits and Elon Musk was forced to appear in front of the SEC as he was unable to keep his (Twitter) mouth closed.

 

Tesla sales fell 61% in the United States and 31% worldwide resulting in an 8% drop in stock price. While that may not sound like a lot, that effectively reduces Tesla’s market cap by $17 billion! That’s nothing to shake an iceberg at!

 

You do have to give Elon Musk some credit though. While his changing behavior puzzles and angers many, he’s also widely regarded as a visionary and a genius. But, while his cars are beautiful, innovative works of art, it seems he can’t get his fundamentals in place to solve the problem of auto manufacturing and sales at a scale that meets promises he has made and keeps up with consumer demand.

 

It doesn’t matter how great the vehicle is if Tesla can't deliver it. Also, cars need to be serviced and, while Tesla seems to be working to make that easier, it just can't effectively handle sales and service with the limited number of locations it has. There is a reason why Toyota and other major brands are so successful … because they are accessible!  With a Ford dealership every 3 miles, consumers find it really easy to buy and service their Ford vehicles. In fact, Ford has about  3,000 dealerships in the United States alone!

 

Do you know how many Tesla has?

 

Eighty in the United States.

 

While Elon Musk tries to reinvent the retail vehicle sales system, it looks more like his sales (and stock) have taken a ride to Mars on SpaceX.

 

Almost all of Tesla’s sales are online. Customers can touch and feel a car in a gallery -- but not THEIR vehicle. Anyone that sells cars knows that the getting the customer to take mental ownership of a car is the whole point of a test drive and, by tapping that emotion, it becomes much easier to close the sale.

 

But Tesla can’t do that. Why? Because Elon Musk is busy fighting with state auto dealer associations and legislators so he can have his direct-to-consumer model. Meanwhile, vehicle manufacturing and sales are suffering.

 

Perhaps it is time for Tesla to reconsider its strategy. Vehicle franchises have been around for decades and are likely to continue for a long time yet. Tesla has undoubtedly created and adopted some cutting-edge technologies, including over-the-air updates, and their cars certainly have sex appeal. The company has also made the process of BUYING a car online a breeze (even though it can’t necessarily deliver one on time.)

 

Perhaps if Elon Musk were to adopt a franchise model, he could put the legal woes, battles, sales issues and, potentially even manufacturing issues behind him. And, here's a thought, maybe this could be made even simpler if he partnered with an existing manufacturer that has an established quality manufacturing infrastructure.

In my opinion, that is how Elon Musk and Tesla can break away from the iceberg and continue their journey. Failing to do so just means that "all aboard" are bailing water to stay afloat.

 

And we all know how that story ends. I’m sure we’ll read all about it on Twitter!

Views: 10

Comment

You need to be a member of DealerELITE.net to add comments!

Join DealerELITE.net

Latest Activity

Scot Eisenfelder posted a blog post
21 hours ago
Bill Wittenmyer posted a video

Freebie Friday: Persistence Pays Off

VP of Sales CDK Global Bill Wittenmyer shares why persistence is your best ally towards productivity in this Freebie Friday.
22 hours ago
Andy Church posted videos
22 hours ago
Reynalda Lor posted a discussion

KeepTruckin ELD Vs. Omnitracs ELD

Greetings!We recently purchased 2 trucks for commercial transportation purpose an now, looking for…See More
23 hours ago
Jim Flint posted a blog post

Can Vendor Partners Predict Sales?

Are the hottest models, too hot to the touch?See More
23 hours ago
Brian K. Cline posted a blog post
yesterday
Jim Leman posted a video

Rapid Recon with Jason Church, GM, Courtesy Volvo of Scottsdale

Auto dealer Jason Church discusses how Rapid Recon workflow software reduces time to market to improve used car profitability.
yesterday
Erik S. Nachbahr posted a video

How to Evaluate IT Solutions for Your Dealership

Helion Technologies Founder & President Erik Nachbahr shares some tips on what dealerships should be looking for in an IT solution for their dealership.
yesterday
Dean Martin posted a blog post
yesterday
Cory Mosley posted a video

Online Sales Success Workshop - Tim Cox of CarNow

The super smart and hilarious Tim Cox joined me for a quick video chat about the state of the digital car business and some of the things he will be covering...
Wednesday
Mike Esposito posted a blog post

Auto/Mate Integrates DMS with MacroFile Electronic Document Management System

Albany, N.Y. – May 22, 2019 – Auto/Mate Dealership Systems announced today it has successfully…See More
Wednesday
Timmy D. James posted a blog post
Wednesday
Mike theCarGuy Correra posted a video

The Importance of Doing Social Media the Right Way

DealerBuilt Account Manager Mike Correra explains why dealers should focus on the right things on social media for their presence to be effective.
Wednesday
Damian Boudreaux posted a blog post

Value Your Company

We want you to be profitable and proud of what you do. We want you to have all the success that you…See More
Tuesday
Black Book posted a blog post

Stable Market Except for Luxury Vehicles

Welcome to this week's edition of Black Book Market Insights, with in-depth analysis of used car…See More
Tuesday
Cory Mosley posted videos
Tuesday
Walter McNulty posted a status
"If you are in need of any of our services please contact me today! www.pdsforyou.com"
Tuesday
John Sternal posted blog posts
Tuesday
Erik S. Nachbahr posted a blog post

Helion Technologies Becomes a CIS SecureSuite Member

Timonium, MD –­ May 21, 2019 –­ Helion Technologies today announced it has become a CIS…See More
Tuesday
Simon Hopes posted a blog post

3 Tips to Sell Luxury Cars on the Internet

Luxury cars is a consumer good present on the wish list of much of the population, currently the…See More
Tuesday

Get Newsletter

© 2019   Created by DealerELITE.   Powered by

Badges  |  Report an Issue  |  Terms of Service