A short interview (clip) from Chris Collins' Service Driver Revolution discussing the decline of the traditional auto dealership model as EV makers (Tesla, Rivian, Lucid, potential entrants like Apple) push direct-to-consumer sales. Speakers note US new-vehicle volumes falling (from ~18 million to ~14 million), legal barriers that prevent legacy automakers from selling direct in most states (even Tesla relied on special attorney-general interpretations), and an argument that incumbent OEMs should proactively negotiate new dealer-compromise arrangements rather than trying to block direct sales. The clip ends with subscription and promotional CTAs (phone line and offers URL).
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From 18 million new cars to 14 million (US).
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No — it states they cannot; change in law would be required and even Tesla needed special attorney-general interpretation in some places.
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There's a lot of people in this country that depend on the legacy brands. You know, a lot of my friends and people that I care about very deeply that depend on that model still working. And so it's a. It gets a little scary sometimes when you think about it. Also, like reading about Apple coming out with a car. And I've, I've said for a long time, and you know, Daniel, it's an interesting thing, like, nobody wants to ever have this conversation with me. Like, everybody always just kind of tries to shut me up when I try to talk about it. But I've said for a long time that we've gone from 18 million new cars in the US down to 14, and that kind of dwindles. Now you get Apple, Tesla, and they come in and they take 2 million of that. You're talking about a huge cut in margins, profit, volume for the big manufacturers.
Absolutely. This is why, I don't mean to be too hard on gm, but I think in the early days of Tesla, when their whole gambit was, let's insist on playing by the old rules on distribution, that was a mistake. Instead of saying in 2014 to John Casage, stop Tesla from selling direct, they should have said, all right, if Tesla's going to sell direct, give us that right, too. The problem is that would mean confronting the dealers in a battle to the death. That's what they didn't want to do. But really, from the dealer perspective, you can't expect that we're to go on with the same model we've had for 70 years, forever. There are new circumstances in the world, new technological, social, economic circumstances in the world. And so this is my editorial in Automotive News was to say, everyone needs to come to the bargaining table together and there needs to be a big compromise about the law. What we'd allow going forward. And it can't just be as the dealers have usually said, because we've done it this way for 70 years. That's the way we keep doing it for EVs. It just doesn't make any sense. So change is coming and everyone needs to figure out how in the new world they can be protected. Not how we're to go back to what we've been doing in the past.
Now as far as the laws are written, and I don't understand how complicated they are from state to state. But could GM and Ford decide that their EVs, they would sell direct to consumer?
They can't.
Not in most states. Certainly not in Michigan, where I live. They could not do that. Right now, I mean, frankly, right now, the way it's written, even Tesla needs kind of a special interpretation from the attorney general to be able to sell direct. So they could not do that. They cannot sell direct, and it would take a change in the law for them to be able to do that.
So do you think that they will start going after that state by state?
I hope so. I hope that they will make the decision to.
I've had some conversations with individuals at Ford and gm, and obviously these are huge organizations with lots of different people making policy, but there clearly are people in those organizations who are hearing the message and saying, look, we need for our company to start changing our tune in terms of policy and saying, we're not trying to stop direct sales anymore. What we're trying to do is talk about how we can do it as well. In some ways, we have the flexibility to do more things direct than we've had to in the past. So there are clearly people in those companies who understand this. And I'm just hopeful that the message comes through to the company as a whole that this is in their interest to do it now. Right. The longer they wait, Tesla rivian lucid, they're going to be selling direct. I'm quite confident they're going to be selling direct by hook or by crook. The question is, will Ford and GM be able to do that as well? And the longer that they play the backstop game of, well, let's stop Tesla from doing it, the less capital they will have to say, all right, let's do it ourselves as well. They need to have a proactive strategy now of talking to their dealers about not just opposing this, but coming up with a new package of ideas that will allow for flexibility going forward.
Thanks so much for watching this clip of Service Driver Revolution. We're uploading new stuff every day, so make sure you subscribe and click the bell icon so you don't miss out. If you have a question you'd like us to answer on the show, call 8333-ASK SDR and we'll answer your question on the show. That's 8333-ASK SDR. For special deals on our books and training, head over to offers.chriscollinsinc.com now that's offers.chriscollinsInc.com I'm Chris Collins and I'll see you in the next video. Sam.
