Illinois Dealers Sue Rivian

[JeffKeryk]

Comparing the direct sales model vs the franchised dealership is pretty similar in the case of Macbooks or electric cars. Any retailer can't sell you a iPhone or Macbook, they need to be a Apple reseller which comes with terms and conditions. It's no random fluke that Tesla has stores that look and feel like Apple stores. Most of the overhead of a dealership is needed, in the case of a shiny Tesla store in a mall they don't eliminate the overhead and cost of storage of extra inventory, the service center, the parts storage, etc they just move it to another place.

Tesla stores carry zero inventory. What do you think it costs to build that shiny Ford, Mercedes, Honda, you name it store? What do you think it costs to operate it? To staff it?
The carrying costs associated with new car inventory at conventional dealerships is high; most dealerships have a revolving line of credit. Every day a car sits in inventory its cost increases. All these costs are passed on to you and there is no value added.
The dealership is a huge, very costly middle man. Tesla eliminates the middle man. Stores have a few cars that you can look at and test drive. These cars are sold from time to time, also online. There are few employees, because there is no management sales hierarchy to set and approve sales price. Employees only need to know how the cars work and some stats. There is zero pressure at a Tesla showroom store.

I humbly suggest people try to stop comparing Tesla as a car and a business to conventional cars and car companies. Tesla has no desire to be conventional.

 

[UncleDave]

I still think the back shop service operations and used cars make a franchise possibly cheaper to run than a factory outlet store. Plus the staff works at least partially on commission. Cars aren’t phones. People take their car in to get ripped off as long as they own it, then get another one, take a beating on the trade, and start all over again. What’s not to like?

I have no problem with a dealer making a % off what they bill from a service perspective.

My problem is when they get 15-25% margin in the car for adding no value to the selling or delivery process.

 

[Jake_J]

Why should the state or separate stand alone business be allowed dictate the insertion of a middle man?

How does a middle man that adds cost to the product help the customer or the company?

I'm not a lawyer nor do i know the state laws in Illinois, that's what the lawsuit is about. If you know the law and you think it's unfair then I'd suggest getting in touch with your member of Congress (if you live in Illinois).

It doesn't help the customer or the company, that's not my point. My point is that the alternative is that the company get's the retail markup, and the customer is no better off (unlike the company). The lawsuit isn't about benefiting or helping the customer or the company, it's about who get's the retail markup that the customer will pay either way.

 

[UncleDave]

I'm not a lawyer nor do i know the state laws in Illinois, that's what the lawsuit is about. If you know the law and you think it's unfair then I'd suggest getting in touch with your member of Congress (if you live in Illinois).

It doesn't help the customer or the company, that's not my point. My point is that the alternative is that the company get's the retail markup, and the customer is no better off (unlike the company). The lawsuit isn't about benefiting or helping the customer or the company, it's about who get's the retail markup that the customer will pay either way.

I used to live in Illinois, I know firsthand whats happening. My family had an Olds Franchise when I was youngster in Indiana.

Im suggesting rivian take the path of least resistance and simply sell where they are wanted, not in a state that wont protect their chosen model.
No one looked down on tesla when they stayed away from where they weren't welcome.

I agree the lawsuit is about the franchise business suing to get markup, its not about the customer.

 

[Jake_J]

Tesla stores carry zero inventory. What do you think it costs to build that shiny Ford, Mercedes, Honda, you name it store? What do you think it costs to operate it? To staff it?
The carrying costs associated with new car inventory at conventional dealerships is high; most dealerships have a revolving line of credit. Every day a car sits in inventory its cost increases. All these costs are passed on to you and there is no value added.
The dealership is a huge, very costly middle man. Tesla eliminates the middle man. Stores have a few cars that you can look at and test drive. These cars are sold from time to time, also online. There are few employees, because there is no management sales hierarchy to set and approve sales price. Employees only need to know how the cars work and some stats. There is zero pressure at a Tesla showroom store.

I humbly suggest people try to stop comparing Tesla as a car and a business to conventional cars and car companies. Tesla has no desire to be conventional.

Tesla makes cars, they only make cars, and they're in direct competition with the other car companies like Honda, Ford, Mercedes, etc. If Tesla was in the sneaker business then I'd compare them to Nike and Adidas. It's great that they don't want to be conventional but it doesn't change the fact they're in the car business.

 

[Spector]

My local Ford dealers state that they cannot take orders on the Mustang E,, all orders must go through Ford online. Now, when you do order an E you must name a dealer but my understanding is that Ford wants to follow the Tesla model for the E cars and move stealerships out of the sales picture. Most customers believe buying a car from a dealer is a horrible experience and Ford agrees

 

[Job]

I have no problem with a dealer making a % off what they bill from a service perspective.

My problem is when they get 15-25% margin in the car for adding no value to the selling or delivery process.

I learned to just say no at the end of the sale to all the add ons. Their faces drop a little, but it's not like they are your buddies. I don't see Tesla as any different really,, with their savings in gas discount, before the real price in fine print at the bottom is noticed. I find that one very sketchy.

 

[JeffKeryk]

I don't see Tesla as any different really,, with their savings in gas discount, before the real price in fine print at the bottom is noticed. I find that one very sketchy.

I have to agree; the "Potential Savings" with asterisk is pretty lame. At the very least, it should not be the default pricing unless they will sell the car to you for that price.
Kinda makes me wonder, "What else do they have up their sleeve?"
But it ain't that big of a deal; just kinda lame if you ask me.

 

[Rmay635703]

Rivian is owned by Amazon,

If they experience any actual trouble their sole customer and 49% stakeholder has pretty deep pockets and resources

 

[UncleDave]

I learned to just say no at the end of the sale to all the add ons. Their faces drop a little, but it's not like they are your buddies. I don't see Tesla as any different really,, with their savings in gas discount, before the real price in fine print at the bottom is noticed. I find that one very sketchy.

The pricing switch is at the very top of each page, you can click it as you see fit.

I wouldnt call that fine print at the bottom of the page.

 

[JeffKeryk]

The pricing switch is at the very top of each page, you can click it as you see fit.

I wouldnt call that fine print at the bottom of the page.






View attachment 53304

Agreed, and the caption is "Potential Savings" with an asterisk. It isn't called price.
Still kinda lame...

 

[UncleDave]

Agreed, and the caption is "Potential Savings" with an asterisk. It isn't called price.
Still kinda lame...

Its still the easiest way to buy a car.

Ive seen nothing nearly as straightforward from the big 3 who often wont even give you a price.

 

[UncleDave]

Ill put up with a toggle switch on an order form any day compared to this.

Puente has a 20K markup as a starting point and 3K of "trukote" (2K+ 941 of "mystery" fee)

Evergreen simply added 5K.

They already get markup on MSRP, but why not gouge the customer at every possible opportunity? - especially when you can.

 

[Danno]

Very good point. The local Ford dealer is just up the street, directly beside my amazing Stellantis (formerly FCA) dealership. The Ford dealership I've been dealing with is only 30km away. There are probably 5 or 6 of them within a 50km range. The closest Tesla service centre is in the GTA, which means venturing down the 401 or 407 (toll) highway and clearly vastly less convenient.

I wonder how service is provided to Tesla customers that are a 4 hour drive away?
I launched Smith EV trucks in Canada. They had to fly technicians in from Kansas City to fix them when they went down. And they went down quite often. No fun at all when its a 2 week turnaround on a commercial fleet.

 

[OVERKILL]

I wonder how service is provided to Tesla customers that are a 4 hour drive away?
I launched Smith EV trucks in Canada. They had to fly technicians in from Kansas City to fix them when they went down. And they went down quite often. No fun at all when its a 2 week turnaround on a commercial fleet.

Flatbed I assume, definitely not convenient.

 

[UncleDave]

Rivian's going to have a tougher time than Tesla in this regard.

 

[PimTac]

Tesla makes cars, they only make cars, and they're in direct competition with the other car companies like Honda, Ford, Mercedes, etc. If Tesla was in the sneaker business then I'd compare them to Nike and Adidas. It's great that they don't want to be conventional but it doesn't change the fact they're in the car business.

Yep, and when customers are going to spend a big chunk of money on something they want to make sure it’s right for them. They want to get in and make sure the car fits them. Sometimes a car checks all the boxes on paper but when you sit in it or test drive it you find out it is not to your comfort or whatever.

Ordering a vehicle online and then finding a problem is probably a big concern.

 

[Job]

The pricing switch is at the very top of each page, you can click it as you see fit.

I wouldnt call that fine print at the bottom of the page.






View attachment 53304

Well it is set to this as default, with gas savings, and I do call it fine print at the bottom of the page. Because it is pretty darn fine. Why have this gas savings at all? Because it is tricky sales and marketing. At least on the Mustang it is bold and brash price padding. If I see a dealer doing that I go somewhere else.

Design Your Model 3 | Tesla

Design and order your Tesla Model 3, the car of the future. Learn about lease, loan and cash payment options, warranties, electric vehicle incentives, gasoline savings and more.

www.tesla.com

 

[UncleDave]

Well it is set to this as default, with gas savings, and I do call it fine print at the bottom of the page. Because it is pretty darn fine. Why have this gas savings at all? Because it is tricky sales and marketing. At least on the Mustang it is bold and brash price padding. If I see a dealer doing that I go somewhere else.

Design Your Model 3 | Tesla

Design and order your Tesla Model 3, the car of the future. Learn about lease, loan and cash payment options, warranties, electric vehicle incentives, gasoline savings and more.

www.tesla.com

I guess the toggle is challenging to some.

You cant even get a price on an actual available Mach E without going to the dealership or talking and emailing someone.

At least with Tesla I know exactly what Ill pay and they next guy isnt going to get a better or worse deal.

Heres Fords Xplan deal - If you can get it who knows who can or cant....

I call this fine print See 1,2,3 below You never do get a final price. nor does this represent an actual car on the lot.

notice an extra 1100 is getting tacked on, or is it 1100 twice with the inclusion of #3?

 

[JeffKeryk]

Its still the easiest way to buy a car.

So true... And there was no toggle switch when we got our car.
Dave, here's how it went down in Dec 2018. This was the last month for the $7,500 federal tax credit.
Sue and I were visiting my father in Sunnyvale. My sister was here to help care for him as I had surgery in Oct on my foot. I was on crutches and could not drive.
We went to Tesla on El Camino in Sunnyvale, just north of Wolfe Road. Kinda on a lark...
We looked and asked if we could test drive one. We were considering a Mid Range RWD; so that's what they had Sue drive.
I sat in the back; Sue and the young man were in the front. As soon as she pulled outta the lot, she exclaimed, "Oh wow..."
After testing the (mind blowing) EAP on 280, we came back. I looked at her and she said, "Yep."
We go to an open computer at the store so the young man could look for inventory; remember you had to take delivery before Jan 1st.
The perfect car had just pulled off the assembly line. White on black, EAP and alloy wheels.
I gave them a credit card, for maybe $200. Maybe I signed 1 time?
Back at home, Sue entered bank information online.
The car was delivered from Fremont to our Los Gatos driveway a day or so later; line workers were used for the late deliveries.
Full disclosure; Sue did sign a few delivery papers. 5 minutes max on our kitchen table. of course I was out in the driveway on my crutches.
By contrast, paying cash for a Lexus, on a deal already set up, takes hours.