Auto Focus  • December 8, 2020 • by Chris Brown   •  Fleet Forward

The electric vehicle market needs dealers onboard to foment the revolution. Tesla says otherwise, and we’ll get to that in a minute. But dealers are the in-person conduits, the knowledge experts, the hand-holders of the public into new technologies that get them where they want to go. 

Yet some dealers aren’t sold on the vision. For now, that’s understandable. 

General Motors is accelerating plans to make Cadillac an EV-only brand, as soon as 2025. Yet about 150 Cadillac dealers are opting out of the brand entirely rather than sell EVs. This makes economic sense for them. Many own multiple GM brands but don’t sell enough Cadillacs to warrant the $200,000 to upgrade facilities and the extra company training. 

GMC dealers, however, won’t be offered the same buyout. Though the electric Hummer is a lifestyle vehicle, the GMC brand isn’t luxury — its dealers drive much more volume to buyers who straddle the line between work and play. 

Many Cadillac and GMC dealers exist in rural areas in which charging infrastructure will lag along with the buying intent for EVs of their traditional customer base. As well, EVs hardly need any servicing — why would a dealer remove this profit center?  

Which brings us to Tesla. Tesla is becoming a player in fleet and is intent on growing its fleet footprint. “Bandwidth on fulfilling (fleet) orders is not currently a concern. I don't think we would limit a certain amount of allocation (for fleet) at this time,” said Tiara Thurston, sales director for Tesla, at the 2020 Fleet Forward Experience. Thurston added that Tesla’s order-to-delivery time, even for large orders, is about four to six weeks. 

Tesla has a one-price direct sales model with no franchised dealerships. Because of franchise laws regarding vehicle sales, Tesla needs to sell vehicles online. This, however, alleviates Tesla of a problem the traditional OEMs have — controlling dealer markups on hot products. The traditional OEMs will walk a tightrope with new EV models. They need to allow their franchised dealers, independent businesspeople, to make their profit while hoping to suppress high markups that will be a barrier to EV permeation.

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