The media narrative is predictable. Elon Musk, the transformative latest incarnation of Thomas Edison, locking horns with the entrenched old economy model of the NJ Auto Dealers. Musk is cool, he has a cool car, he’s a visionary. NJ and other states surely must yield. Right? While I may agree with the Tesla model of new direct sales — I don’t see Tesla volume and positioning an existential threat to any dealer from AutoNation to the local mom-and-pop single point dealer. I don’t agree with this in your face reply to the NJ dealer and politicians. It may gin up support from those who already support Tesla, but it’s not going to work in the long run. What if Musk turns to Jim Cramer and his hedge fund buddies for solution?
Auto dealers, while, not the most popular businessmen in perennial “trust surveys” hold significant clout in their local and state economies and political circles. Dealer are the biggest donors in the sector, and they donate mostly on local issues. Remember during the GM and Chrysler bailout we were reminded by the Car Tsar how the dealer networks were key employers of the million or so jobs at risk.
In addition to the “million” or so folks whose jobs are “at risk” there are the 99% of car buyers who view Tesla as an elitist brand. Cool, but elitist. Jim Cramer comes across as an any man, but at $100K a pop, Tesla is a rich man’s toy. And I don’t need to remind anyone that while green is good, class warfare has been fomented to froth over the past few years. How bad does a marginally employed tradesman feel for the hedge fund manager who can’t buy a six figure sports car? Not!
Just a thought. What if all these doctors, lawyers, marketing execs (one of my friends) set up a dealer group that sells Tesla at 0% for the company. The meeting-of-minds with these financial titans should be able to configure a pass-through dealer model that can be funded through Tesla equity and or new Tesla product ownership derivatives. Jim Cramer has been a major cheerleader for the group. He can be the front.
OK, so slightly more seriously. I am confident Tesla is working on creative relationships to transform the dealer experience at the same time as transforming the auto experience. For those that detect a touch of sarcasm, I’m serious. The last reform of the dealer structure was 20 years ago when Wayne Huizenga opened his first CarMax.
A hedge fund run dealer group is just one throught. Apple? Google? Or maybe a viable future for JC Penny or Radio Shack. OK, sarcasm noted.
It’s Tesla, I’m just trying to think out of the box.