Thought Leadership

Despite Tesla’s Retail Model Revolution, People Still Prefer Traditional Car Dealers

September 23, 2021
Escalent - People Still Prefer Traditional Car Dealers

Reports of Tesla’s retail model dominating the future of car shopping and buying are exaggerated.

Those are the findings of our latest EVForward DeepDive report, in which we examined car shoppers’ preferences regarding the car buying experience. While there may be a common belief that shoppers will increasingly want to buy cars directly from manufacturers à la Tesla retail model, our respondents—including millennials—favorably view the traditional dealer-centric car shopping experience.

What’s more: dealers have a unique opportunity in front of them as automakers seek to educate electric-vehicle-curious shoppers.

Flipping the Script

It turns out consumers not only like the car dealer experience but they prefer it to direct retail by nearly threefold:

  • 57% of all respondents prefer the traditional approach to car buying, while just 20% prefer Tesla’s direct retail model.
  • 94% of respondents younger than 35 are satisfied with dealerships—the highest of any group. Among all groups, 87% are satisfied with dealerships.
  • Further, a majority of shoppers prefer that many of the phases of the car-buying process take place in-person rather than virtually:
    • Purchase – 75%
    • Arranging for financing – 60%
    • Taking delivery of the vehicle (at dealership as opposed to at home) – 85%
    • Repairs and service (as opposed to tech coming to home) – 79%

While some of these sentiments could be attributed to simply preferring what’s familiar, the desire to conduct much of the sales process in person—rather than virtually or by email—is telling.

Forging a New Kind of Customer-Dealer-Automaker Relationship

These sentiments open the door to new opportunities for car dealers, who have long fought to preserve their role in the sales funnel—sometimes even at the expense of their relationship with the automakers whose products they sell. Pairing dealer-friendly consumer preferences with an emerging need among carmakers—educating customers regarding electric vehicles (EVs)—offers a look at what a successfully leveraged relationship may look like in the near future.

In fact, 63% of EV Intenders—respondents identified by EVForward as the next generation of EV buyers—in our study have shared that test driving an EV is important in their consideration and decision-making process, while 31% indicate that a dealership salesperson would be among their primary sources of information—a percentage that is likely to go up as more automakers move to fully electrified fleets. Automakers and dealers must work together to win the EV adoption race by providing the familiar dealer experience sprinkled with critical information regarding EV benefits and capabilities.

To learn more, send a note to our Automotive & Mobility team today.

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About EVForward™

This EVForward DeepDive was conducted among a national sample of 1,248 respondents between May 5 and June 16, 2021. These respondents are a subset of the EVForward database, a global sample of more than 20,000 new-vehicle buyers aged 18 to 80, weighted by age, gender and location to match the demographics of the new-vehicle buyer population and by vehicle segment to match current vehicle sales. The sample for this research comes from an opt-in, online panel. As such, any reported margins of error or significance tests are estimated and rely on the same statistical assumptions as data collected from a random probability sample. Escalent will supply the exact wording of any survey question upon request.

Mike Dovorany
Mike Dovorany

Mike is a former vice president with Escalent's Automotive & Mobility practice.