Tesla's sales model
Daniel Cappo's picture

Tesla's Sales Model Expected To Create Major Ripple Effect Throughout The Whole Industry

Tesla has revolutionized automotive sales with its sales model because the cars are sold directly to the consumer. This has been a practice that has worked well for Tesla, and many other car companies could follow Tesla’s lead.

Tesla has changed automotive sales with its sales model, and the reality is that this will have some lasting implications. The business environment of the past 18 months has helped to accelerate some of these trends. Car buying will now be done more in the online space and there will likely be less people who go from dealer to dealer looking at cars.

Changes that are expected

Many of the changes that are being brought about by the adoption of new sales models may not be so pleasant for buyers in certain aspects. Tesla is not a very high-volume carmaker by any stretch. Tesla has moved many more units recently than in years past, but it still pales in comparison to companies such as Ford which sold over two million vehicles in the U.S. during 2020.

Some larger dealership groups are expected to sell some dealerships. It might not make sense to have so many dealerships as more people are looking to buy cars online. Tesla and other companies that produce EVs are the main drivers of this switch to doing more business online.

Another trend that has taken hold is that a lot of car dealers currently have much less inventory on the lot than in years prior. This has been a theme during the pandemic due to supply chain breakdowns. The unfortunate reality for consumers is that many manufacturers want to keep inventory numbers low so that they can raise prices. This will put some buyers in a hard position. Big discounts on cars may become something that isn’t seen as often.

There will still be dealerships

There will still be car dealerships in the years to come, but there will be less of them. Dealers may do better if they can charge higher prices, but it will depend on the make of the car.

To be clear, no carmaker has transitioned completely to using Tesla’s sales model. However, some carmakers have tried to sell cars online. EV startups such as Rivian are expected to possibly start using a sales model that is very similar to the one Tesla uses. Other car companies could align themselves more with what Tesla is doing in the coming years as the number of electric cars on the market increases.

How Tesla will do in this environment

Tesla is expected to continue to grow. There is a lot of demand for Tesla vehicles. It will be interesting to see if selling online can help increase demand for cars made by various manufacturers.

Daniel Cappo reports Tesla developments at Torque News. He has had a passion for cars ever since age five when his grandparents let him drive their old golf cart around their property in Upstate NY. He has attended numerous auto shows, and even got the chance to drive a Ferrari California on the track. Ever since Tesla opened up a dealership at his local mall, he's been an avid follower of their cars and technology. Dan has a B.S. in Public Communication from U Vermont. Follow Daniel on Twitter and LinkedIn for daily Tesla News.

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It is hard to watch these legacy car manufacturers struggle to spin their inevitable demise. This disruptive and transformative technology was painfully obvious years ago, if was just a matter of who among the big three would break the mold, and in the waiting and watching, they allowed an outsider to clean their clocks. This is what happens when an industry relies upon government to make free market decisions. Now all that is left is the sweeping of the floors and washing of the windows to make room for the new tenants. HOWEVER, bankruptcy is an easy play, besides, the only one that gets hurt are the taxpayers and the government has the public wrapped around their needy fingers. Good luck with all the paperwork and supplier requests for the same.