Due to restrictions on direct car sales by automakers, Tesla is currently limited to 5 stores in the state of New York.
A bill introduced this year would allow Tesla to expand to 20 stores in the state. It was stalled in the last session, but it’s coming back for consideration next month.
Ahead of the inevitable lobbying efforts, a local dealer association is already laying the groundwork and using misinformation to attack Tesla’s business model.
With only 5 stores, Tesla is currently limited to New York City and the surrounding areas.
The bill will not only enable Tesla to move upstate, but it will actually require them to have store and service facilities in each of five Upstate regions: the Rochester, Buffalo, Syracuse, and Albany metros, as well as the Hudson Valley.
Now, the Rochester Automobile Dealers Association hasn’t taken an official position on the new bill, but President Brad McAreavy is already suggesting that they should have to go through the franchise dealership model.
He commented in an interview with the Rochester City Newspaper:
“McAreavy argues that consumers and vehicle manufacturers are best served by the franchise dealership model. And Tesla could quickly expand into the Upstate market by working within that long-established system. It would cost the company little, since the dealer owners would pay for overhead like staff, facilities, and the equipment needed to service the cars.”
Tesla has often expressed that it has no intention to use the franchise model. A recent study on the electric vehicle shopping experience partially gave reason to Tesla and found that a lot of dealerships are not even charging electric vehicles on their lots resulting in potential buyers not being able to get test drives.
Also, dealerships make most of their profit from service and Tesla says that it has for mission not to turn servicing its vehicles into a profit center.
But McAreavy went a step further to try to make the dealership model look better than Tesla’s direct sale approach:
“The company sells only a fraction of the electric vehicles in New York. McAreavy offers up some numbers to show the effectiveness of traditional dealerships vs. Tesla’s model. New York State has an electric vehicle rebate program, and since March it’s registered 4,233 sales, McAreavy says. Only 110 of those vehicles were Teslas, he says.”
Tesla says that those numbers are wrong without confirming the actual number of deliveries in New York.
Either way, it’s not a valid data point to compare the two models.
That’s a really deceptive statement from the dealer association. Not only it is wrong to assume that the number of claimed rebates is representative of Tesla’s EV market share in the state, but it’s even more stupid to try to pass that as an argument in favor of “the effectiveness of traditional dealerships vs. Tesla’s model.”
First of all, the numbers are clearly not accurate. Based on the latest available data from the state (Q1 2017), Tesla is actually leading sales:
We couldn’t get the rebate data that they are presenting, but it obviously makes no sense.
But to suggest that this program is representative of the demand for Tesla’s vehicles versus EVs sold by dealerships is extremely deceptive since the program disadvantages Model S and Model X.
As we previously reported, the program offers up to a $2,000 rebate, but Model S and Model X are limited to $500 because of their price tags.
Furthermore, Tesla is currently limited to only 5 stores in the state because of archaic laws backed by the dealerships, which is of course a limiting factor.
It’s not even true to start with, but it’s like they are saying “look Tesla’s sales are not doing well in a market where we are limiting their presence.”
This is stuff that just makes my blood boil. If your dealership model is really better than Tesla’s, then let them compete with you and you should be able to beat them. But no, they are instead so confident in their business model that they lobby and share misinformation to try to block Tesla’s model.
It all makes sense…