Tesla Inc (NASDAQ:TSLA) has not been having a dealer network for many years perhaps due to the fear of being locked out of certain states by the dealers who are politically powerful. However, while this may have looked like a disadvantage at the beginning, it may turn out to be an advantage in the long run. The company is only obligated to please its customers, and not the distributors, while it takes direct control of the pricing.
Car dealers currently have to work with assumptions in pricing the Chevrolet Bolt from General Motors Company (NYSE:GM). Two dealerships in California who are apparently five miles apart have different prices for the electric vehicle. An Auto Week states that one of them is charging $4,439 more than the other.
The discounts on the electric cars could make them loose market seriousness
Some reports have it that some dealerships had rolled out huge discounts on the cars and in particular states. In January consumers were spending $1,400 below sticker price but this escalated to $2,200 in February. A report from GM had earlier highlighted a cost of $37,495 before the tax given by the government to electric vehicles.
However, GM may not be as competitive as Tesla according to Chowdhry, an analyst for Global Equities research. Fred Ligouri, Chevrolet’s spokesman was quick to reiterate this citing that the Bolt EV’s future was bright. Besides, it takes the fourth rank in the plug-in vehicles.
“If you look back at any of the awards the car the won, look at some of the early customer enthusiasm around the car, look at the dealer enthusiasm around the car, Bolt EV is on track to bring a lot of new buyers,” Ligouri stated.
But the price and the discount disparities could be an advantage for Tesla’s Model 3
The pricing difference is not a big deal for GM at the moment. However, it means that its dealers will not enjoy any tangible incentive for pushing the Bolt. It may also be an advantage for Tesla’s competitively priced Model 3, which is scheduled to roll out later in the year.
Records have it that it will cost $35,000 before incentives and the number for those who have made reservations is close to 400,000. In the meantime, Tesla’s stock closed at $250.68 a fall of $11.24 or 4.29%
