Tesla CEO calls for change in sales model
Chief executive officer of Tesla Motors, Elon Musk, said the traditional way cars are sold in the U.S. is dampening the electric automaker's growth prospects, calling for direct-to-consumer sales.
Car manufacturers are prohibited by most states from selling cars directly to consumers, except through online sales. The company has sidestepped the network of independent dealers by simply opening showrooms to display the electric car and taking orders for its Model S online. The company has urged for changes in the traditional sales model, aiming to sell cars directly to consumers.
"The auto dealers association is definitely creating some problems for us, making it harder to get things done," said Musk at Tesla's annual meeting on Tuesday. Musk is of the opinion that traditional dealers aren't the best promoters for electric cars, adding that consumers extensively support direct sales. "It didn't work for Fisker, didn't work for Coda. In the last 90 years, when did it work?" Musk said at the meeting. "We have to do this directly."
David Hyatt, vice president of public affairs for the National Automobile Dealers Association said, "Industry experts say Fisker failed because it rushed its product to market before engineering problems were resolved. Coda did not receive government loans and was under-capitalized. Thank goodness there are independent dealers left to try to help the customer. Manufacturers and brands may come and go, but the dealers are there for the long term."
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