Tesla Plans to Sell Cars Direct to Consumers Over the Internet

Tesla auto store in a shopping mall

Tesla auto store in a shopping mall

Retail stores for almost every product we buy are becoming scarce or finding themselves under pressure because of the overwhelming presence of the Internet. The huge selection and often lower price available online, not to mention delivery to your door, make buying online commonplace, except for one glaring exception, ... car dealers. If you want a car, you have to drive to a dealer and go through the process we all know and rarely enjoy. Tesla wants to change all of that.

Tesla is opening showrooms in strategically chosen locations where a customer can look at the car, then place an order over the Internet direct from the company after which the car is built to order. No high pressure, no huge dealer inventory the salesman wants to sell, you just place an order for exactly what you want. Traditional dealers, unsurprisingly, are not amused.

Since the actual order is over the Internet, it seems you don't have to go to the store at all, and like online sales of everything else, Tesla will deliver to your door unless you prefer to pick up the car at the factory.

Car sales and dealer laws are regulated at the state level and create quite a bureaucratic thicket that only lawyers can understand, but Tesla says they are confident their plan will work.

My only concern is who will service the vehicle if the need arises during the warranty period, something Tesla has most likely already considered.

A new car company (a rare thing these days) has to face this issue head on, because without an established dealer network, how do you penetrate the market from Connecticut to California? Sell the cars online? It makes sense to me.

Link: Yahoo! autos


  1. Petter says

    This a great idea so far !

    The showroom should also include the ability to test drive the cars.

    I guess that getting paid by the factory and not with the margin they make on cars is not a welcomed idea among the tradionnal car dealers.

    • Paul Crowe says

      Most car dealers today know nothing else other than this “way it’s always been done,” which is the current system. State laws controlling the car buying process were put into place in the early 20th century and never updated to reflect changes in technology or to reevaluate whether there might be a better way. Tesla might get the conversation going again and this order online process, which a lot of people have been waiting for, can be tested to see if it works. It might or might not, but until it’s actually tried, we won’t know and the only push back will be from entrenched interests who benefit from the present arrangement.