It’s amazing when a spin doctor is able to make a good chunk of people believe in the wrong thing. The way that Tesla is playing their hand for the media, the consumer advocacy groups, and the consumers is nothing short of masterful.
First and foremost, let’s make two things very clear:
- We do not condemn Tesla for what they’re doing. While it may end up hurting the automotive industry and consumers if they push too hard, the idea of them wanting to keep their chosen sales model in place is absolutely nothing that we object to or disrespect. In their shoes, we would probably be doing the exact same thing.
- We do not support the car dealers around the country because of bias on our part. For full disclosure, car dealers are our clients. That means that we want them to succeed. For this particular situation, we are taking off our self-serving hat and looking at the facts of the situation because when you dig into the matter from a comprehensive perspective, you’ll see that their concerns are valid.
With all of that out of the way, let’s take a look at the job that Tesla is doing on the media.
The Fairness Card
Tesla is playing the victim on this one. They are playing both Democrats and non-interference Republicans on this one and claiming that it’s unfair for them and their miniscule number of sales to be hampered by a system that favors the big boys.
This is one tactic that plays to a majority of people in the country. There are very few legitimate Tesla buyers out there, but even those not planning on paying for the expensive rides can relate to the sense that Tesla is the victim getting bullied by nasty politicians and special interest groups. Throw in the fact that franchise dealers are the most vocal civilians against Tesla and they should be impossible to beat.
When lawyers, politicians, and car dealers are against you, it’s easy to get the media and the people for you.
Cutting Out the Middle Man
This is the harshest and least true argument that Tesla and their consumer advocacy puppets are peddling. The concept of cutting out the middle man is one that just about everyone can appreciate. In most cases, it’s a true statement. However, in this case, it’s simply not.
The “middle men” in this case are the car dealers. What people don’t seem to realize is that their portion of the sales on most new cars is so small that really isn’t a lot of middle man to cut out. In fact, chances are that manufacturers who were allowed to switch from the franchise model to a direct sales model would have to raise prices of their vehicles in order to pay for the added costs that are currently covered by the franchise dealers.
Most dealers make their profits on the back end – service, parts, and other fixed operations revenue streams. The manufacturers would be unable to follow this sort of model, so they will have to make up for it through price increases. To put it into perspective, the haggling that people hate to do is a portion of the buying experience that allows for those informed (which could be anyone in this digital age of transparency) to use the competitive nature of the automotive industry to their advantage. With Tesla’s model, this isn’t the case. You can’t walk into a Tesla store and haggle for the price because there’s nothing to haggle. There’s a price. Pay it or move on.
The Insult Game
Finally, there’s the way that Elon Musk and his team are able to directly or indirectly cast insults at politicians and car dealers without repercussions. They’re the “good guys” in the eyes of the public and when they attack others, it’s seen as a necessary part of their position. When the opposite is attempted, the results are disastrous.
One way or another, Tesla will likely get its way in enough states to make their model valid. That’s fine. If they can sell their cars the way they want to sell them in half the country, it should be fine for them and shouldn’t affect the rest of the automotive industry. However, if they and their advocates push the fight to change the laws and allow other manufacturers to start selling direct, the consumers will be receiving a surprise that will make Obamacare seem simple, effective, and transparent. Most consumers will end up paying more for their cars as a result. It’s that simple.