The Tesla vehicle sales process is a competitive advantage, says Morgan Stanley. The conclusion came after an analyst bought a car from a traditional dealer and his experience was filled with negativity.
Morgan Stanley analyst Adam Jonas spoke about his recent experience buying a new car. This prompted him to point out the advantages Tesla has in owning its own stores. Tesla's sales model works for consumers, while traditional dealers are only looking for ways to ensure their own interests are served.
Jonas said that for the purchase he chose a car that was in short supply. So he had to look at several dealers before settling on one. All dealers considered were charging above MSRP, but the analyst managed to find one who promised to sell at MSRP. However, having come to the place, the seller then gave a price higher than promised. Jonas shared his experience (via Sawyer Merritt/Twitter):
“I was greeted by a friendly sales professional who took me upstairs to a prep garage where he pointed to the brand new SUV saying: ‘So here’s your new truck.’ I turned to him and said: ‘Isn't she beautiful? Hey, I just wanted to confirm that there's no dealer adjustment on this vehicle.
He looked at me and said: ‘You gotta be kidding? This [model] is in super short supply… we ask for thousands above MSRP in this market.’ Exasperated, I said: ‘But I called and confirmed with your coordinator you were asking for MSRP before driving down here.’ To which he responded: ‘Who told you that? No way, I'd normally start someone at least $3k above sticker on this vehicle. You should do your research buddy.
(mental note - story of my life).
So I took a deep breath and said very slowly: ‘You know, I thought this might be a problem.’ And handed him my phone with the screen shot clearly showing the dealer price = to MSRP for this exact stock number. He looked down at the phone and with a straight face said: ‘Ok, then I guess that’s the price.’ I asked him: ‘Look, I get it. You're just doing your job. But is how the process really works?’”
While Jonas did manage to buy his chosen car at MSRP, it was a hassle for him. The negative experience he had with the purchase led him to point out the benefits of Tesla's direct selling model. In fact, the company works for consumers, offering the same prices to everyone who is in the region where the store is located. According to Jonas, this is a competitive advantage for the manufacturer.
“Tesla's sales process is a competitive advantage: While a lot of attention this year has been paid to Tesla's frequently changing prices, within one region, all consumers pay the same price for the vehicle. There's no haggling. No arbitrage between stores. It's a smooth process that is creating an increasingly visible discrepancy between the legacy car buying experience and the Tesla experience,” he wrote.
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About the Author
Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.