Car Dealers Are Terrified of Tesla’s Plan to Eliminate Oil Changes

[BlueStreak]

53. Exactly. The initial sale is a small part of the dealership profit

There have been so many bad actors in the car business over the years, states certainly have a vested interest in requiring a substantial point of presence for anybody selling cars in each state. There is no doubt that the dealer associations have used this politically to their advantage to erect barriers to competition, and some of that needs to be rolled back.

But it is absurd for Musk to cry that this should not apply to him because -- well you know, because I am a visionary and how dare you suggest that I might produce a lemon at some point, and if I do, that is my own business ...

What's the big deal? If he is going to produce 500,000 cars a year, then he OUGHT to have local dealerships.

Regarding the dealership profit breakdown, it is complicated with all sorts of floorplan deals and other incentives, but a dealer might net $1000 on a high end vehicle and under $500 on a small car. If they can get that customer to patronize the dealership throughout the life of the car, they could easily make well over $1000 in service profits over the life of the car. And then the customer is also more likely to buy the next car from that same dealer (even if it is a completely different auto manufacturer the next time.) Dealerships have a real fortress to protect.