Tesla CEO Elon Musk Says Franchised Dealers Might Come, Sometime, One DayTesla CEO Elon Musk Says Franchised Dealers Might Come, Sometime, One Day

Tesla Motors’ company-owned stores have provoked a bitter response from state auto-dealer associations, who view them as a threat to traditional franchised dealerships.
Yet Tesla CEO Elon Musk seems to think the two business models can coexist.
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In a recent interview with Autoline Daily (via Autoblog Green), Musk hinted that Tesla itself may augment its existing network of stores with franchised dealerships as production of its electric cars grows.
Musk told Autoline host John McElroy that the carmaker may need a “hybrid system” combining its current stores with franchised dealers to meet its future growth plans.
Tesla Store opening in Westfield Mall, London, Oct 2013As the Model X crossover and Model 3 sedan go on sale, Tesla may need to move beyond its own stores–which resemble high-end retailers more than stereotypical car dealerships, and are often located in shopping malls.
Instead of choosing from on-site inventory, customers order their cars online and had have serviced at separate service centers.
An increase in the number of models and volume–thanks  partly to the Model 3’s estimated $35,000 base price–would introduce a new level of complexity not seen with current low volume of Model S sales.
Tesla’s original reasons for opening the Apple Store-like outlets may also become less relevant.
Elon Musk previously said that Tesla went the direct-sales route because it need salespeople to spend more time educating customers about the Model S and electric cars in general.
Tesla Store opening in Westfield Mall, London, Oct 2013This couldn’t be done by traditional dealers, Musk argued, because they rely on traditional internal-combustion cars for the bulk of their profits, and staff are paid to close deals, not host Q&A sessions.
However, as the Tesla brand becomes more established, and electric cars become commonplace, that educational component may become less important.
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As consumers learn what to expect from Tesla’s cars–and know to add them to their shopping lists–they may need to ask fewer questions before buying one.
Given the very small amount of electric cars currently sold in U.S., that day is likely a long way off, while dealer challenges to Tesla direct sales don’t show any sign of abating.
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