Car Dealer Exec: Tesla No Longer Only ‘Cool Kid’

DETROIT – Not long ago, battery-electric vehicle maker Tesla stood out as the “cool kid” of the auto industry because it was “first to the party” in bringing upscale EVs to market, says car dealership executive Diane Maher.

By arriving early – in 2008 – Tesla soon became America’s EV market leader, at one point holding nearly an 80% share. Tesla sold a record 1.3 million vehicles in the U.S. last year.

But things are changing as mainstream automakers introduce a steady cadence of new EV models.

“Now there are other cool kids,” says Maher, president and chief operating officer of Michigan-based Fox Motors, a multi-brand dealership group with 45 stores. “So, Tesla is not the only game in town. America loves a choice.”

Her remarks were made as a panelist at a session entitled “The Future of Automotive Retailing” at the 2023 Automotive News Congress. The event is held in conjunction with the Motor City’s North American International Auto Show that starts this week.

The automotive extravaganza will feature several EVs from BMW, Cadillac, Chevrolet, Ford, GMC, VW – and Tesla, which returns to the Detroit show after a seven-year absence.

Besides its impressive sales, Tesla stands out in another way: It sells vehicles directly to customers, skipping the traditional franchised auto dealer network.

Dealers on the panel make a somewhat disdainful note of that, even as they concede Tesla’s success.

“Tesla has done a good job capitalizing its market share,” says Damon Lester, owner of the Maryland-based Lester Auto Group.

But as new EV models from competitors enter the market, many of them will get people thinking, he predicts. “People will see other EVs on the road and say, ‘That’s a cool car – and it’s not a Tesla.’”

Tesla, inextricably linked to co-founder Elon Musk, also stands out for its pricing flexibility, Lester says. “He can change his prices at will. He can change them immediately.”

For instance, Telsa this year cut the price of two vehicles -- the Model X and Model S -  in a bid to boost sales.

Average consumers, not just affluent people, want EVs, Lester contends. But the price of many of them today can scare away those on a budget, he adds. “We’re at a point where a customer may want an EV, but it is deemed as a luxury vehicle.”

For EVs to garner mainstream consumer appeal, some of them must be priced accordingly for use as “primary, everyday drivers,” not as an extra car in the driveway, he says.

EV affordability is an issue, panelists agree.

Moreover, vehicle affordability “is an issue at large for the auto industry,” says Cox Automotive Executive Vice President Amy Mills.

The average price of a vehicle in the U.S. reached $48,008 in March, according to Cox Automotive’s Kelley Blue Book.

Certain newly introduced EVs won’t bring down that average. For example, at the Detroit auto show, Ford is showing its top-of-the-line F-150 Lightning Platinum Black EV pickup truck. It’s priced at $99,990.

Meanwhile, panelist Todd Milbury, the National Automobile Dealers Assn.’s head of industry relations, touts the franchised dealer model as the best way to sell cars, both now and in the future.

“We all understand that when you stand on the side of the consumer, you win,” he says.

“We need a unified voice that says dealers matter,” Lester adds. “Keep in mind that customers want to drive off our lot and be happy.”