The declining market share of franchised dealers in states like Washington and Colorado, which allow direct sales and follow California’s climate standards, is cutting into their potential profits.
Tesla’s sales of 16,000 vehicles in Washington and 9,391 in Colorado last year resulted in an average of $244,000 and $175,000 in missed gross profit for dealers, respectively. However, with traditional automakers launching more EVs, Colorado dealers are excited to compete.
Luxury legacy brands like Mercedes-Benz and Cadillac are rolling out competitive EV options that will make Tesla models appear outdated in comparison. As more than 50 EVs will be on the market by the end of this year, automakers, including Tesla, will have to face increased competition.
While Tesla’s sales have not affected dealers’ EV volume so far, it has taken share from gasoline vehicle sales.
According to David Long, the executive general manager at Hansel Auto Group in Santa Rosa, California, Tesla’s sales have not impacted dealers’ EV volume as there were not enough EVs available on the market. Instead, Tesla’s sales have affected gasoline vehicle sales.
However, with the arrival of EVs from traditional automakers, dealers like Long are now better positioned to compete in the market, stating that they are “at least in the ring” now.
Source: AutoNews (subscription required)
Mike Floyd is a finance executive by trade and a car enthusiast at heart. As a CFO with a keen eye for detail and strategy, Mike brings his analytical mindset to the automotive world, uncovering fresh insights and unique perspectives that go beyond the surface. His passion for cars—especially his favorite, the Porsche 911, fuels his contributions to Automotive Addicts, where he blends a love for performance and design with his professional precision. Whether he’s breaking down industry trends or spotlighting emerging innovations, Mike helps keep the site both sharp and forward-thinking.
