Morgan Stanley analyst Adam Jonas recently related Tesla’s shopping experience with paid subscription service Amazon Prime in his recent research note, Business Insider reports.
For context, the American electric vehicle giant employs a distinctive sales model. Unlike its rival legacy automakers that sell their EVs through dealerships, Tesla processes the purchase transaction directly to customers.
Put simply, Tesla’s selling approach underscores a long-standing issue with dealerships, which is price markups.
What exactly happened?
According to the report, analyst Jonas recently shopped for a new electric vehicle. However, he did not have a good experience.
The Morgan Stanley analyst stated that he received the usual dealership treatment when he visited an undisclosed brand’s dealership.
Apparently, he called early to confirm the availability of the e-truck he wanted. He even asked the dealer if he could acquire the vehicle at its MSRP value, as he included in his research notes on Wednesday.
Despite the early confirmation with the dealership, the salesperson still asked him for thousands beyond the unit’s OEM price, which is reportedly usual for dealerships nowadays.
“Who told you that? No way, I’d normally start someone at least $3k above sticker on this vehicle. You should do your research, buddy.”
Dealer
Fortunately, Mr. Jonas could screenshot the dealership’s website, proving that the dealership was selling the vehicle he wanted at OEM’s price. Then only he was able to process his purchase smoothly.
“I took a deep breath and said very slowly: ‘You know, I thought this might be a problem,'” Jonas said. “And handed him my phone with the screen shot clearly showing the dealer price = to MSRP for this exact stock number.
He looked down at the phone and with a straight face said: ‘Ok, then I guess that’s the price.’ I asked him: ‘Look, I get it. You’re just doing your job. But is how the process really works?'”
Analyst Adam Jonas
Why Tesla’s sales model is an advantage?
After having a bad experience with a car dealership, the analyst was convinced that Tesla’s sales model was a “competitive advantage.”
“While a lot of attention this year has been paid to Tesla’s frequently changing prices, within one region, all consumers pay the same price for the vehicle.
There’s no haggling. No arbitrage between stores. It’s a smooth process creating an increasingly visible discrepancy between the legacy car buying experience and the Tesla experience.”
Analyst Adam Jonas
According to Mr. Jonas, the fact that Tesla controls the whole product sales cycle, from design to manufacture to sales and delivery, makes the “shopping experience as easy as Amazon Prime.”
See Also:
- Brand Finance names Tesla the world’s most valuable automobiles brand
- Tesla Model Y advances as the world’s best-selling car in Q1 2023
- The $25,000 Tesla EV is coming along with significant implications for the auto sector and buyers
- Tesla Sales increased in China after price cuts
- Tesla China sales grew 2.44% month-on-month in May 2023
Indeed, Tesla’s direct-to-customer approach has effectively increased sales for the company. It also avoids the annoying issues most customers experience when going to a dealership, offering smooth purchase transactions.
