The market share of franchised dealers in Washington, Colorado and other states that allow direct sales and follow California’s climate standards also is declining and starting to eat into their potential profit pool.
In Washington, for example, Tesla sold about 16,000 vehicles last year, according to S&P. That amounts to potentially $244,000 in missed gross profit for dealers on average.
Tesla sold 9,391 vehicles in Colorado last year, according to S&P, leading to nearly $175,000 in average missed gross profit for franchised dealers in the state.
Now that traditional automakers are launching more EVs, Colorado dealers are “more than excited to compete,” said Matthew Groves, interim CEO of the Colorado Automobile Dealers Association.
Luxury legacy brands, such as Mercedes-Benz and Cadillac, are bringing out compelling EV options that will show Tesla models’ age in comparison, said Mark Barrott, a principal in consulting firm Plante Moran’s automotive practice.
“Tesla’s products are getting pretty long in the tooth from a refresh perspective,” he said.
As legacy brands roll out competitive vehicles, Tesla’s advantage will soften, he said.
Automakers, including Tesla, will have more than 50 EVs on the market by the end of this year.
So far, Tesla sales haven’t cut into dealers’ EV volume, said David Long, executive general manager at Hansel Auto Group in Santa Rosa, Calif.: There weren’t enough EVs available on the market. Instead, Tesla took share from gasoline vehicle sales, he said. Now that EVs from traditional automakers are becoming more available, “at least I’m in the ring,” he said.
“Before, I couldn’t even get in the fight because I didn’t have anything to compete,” Long said. “Now, everything I get that’s EV sells. Now they have a contender.”
