"An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car."
Well then what about BMW with bumper to bumper service as only one example. That's a high end car that you don't pay for service for (iirc) 3 years. They cover everything. Wiper blades you name it. I think last I checked the same was true for Subaru and I think even Jeep Chrysler is doing this (may be wrong about that one).
And that's not a conflict of interest but rather a business model. In the case of cars which do make money from service they therefore in theory have a lower price for the vehicle.
This argument is like saying that you are a better airline because you don't charge for luggage. Presumably that extra revenue allows you to offer lower ticket prices. And surprise that is what happens. Back when airlines were regulated (and had less competition) and they charged way higher prices they didn't have to nickle and dime you to make a profit.
More to the point, the things he mentions are not very expensive service items--to say nothing of the fact that there's no particularly compelling reason to have them done at the dealer if you don't want to. (And talking about "tune-ups" is pretty close to an anachronism at this point.)
Tesla, on the other hand, does have all its new electric car components which are all very impressive technically but about which relatively little is yet known about service life and long-term service costs.
Really, this is about Musk wanting control over the complete experience. Nothing wrong with that (see, e.g., Apple). And I'm no particular fan of the auto dealer experience. (Though I don't buy luxury brands today which, I've been told, unsurprisingly offer a better dealer experience in general.) But you'll end up with dealers of some sort one way or the other.
I took delivery on a new Porsche. The transmission had a problem. So they flew a new one in from Germany by Fedex at a cost of perhaps $8,000 (after all it's pretty heavy) in air freight I was told. Loaner cars? Last time they gave me a brand new Cayman (I own a 911) with 300 miles on it. Other times Cayene Hybrids with 3k miles.
It's not without it's bumps of course (routine service maintenance was $450 to keep up the warranty Mercedes does something similar). But if you can't afford that type of thing you don't buy this type of car (at least not a new one).
The standards are higher for several reasons. One is that people with money don't take shit generally and are very demanding. So they keep the people working there in line and don't take bs answers and complain so much.
I brought the car in to fix a problem and when I was driving down 95 the repair broke. I called them they towed the car back and got the repair mechanic back from home (he had left for the day) and fixed it while I waited. I felt bad for him he was literally fearing for losing his job.
If you have a problem with your Tesla they will come to you and if required leave you with a loaner (the top end model of course). I'll take that over going to any dealer, no matter how nice it is.
Keep in mind that when a car has a warranty or includes free service for X years, the dealership that performs that service is still paid. It's sort of like a medical insurance model, where you don't get a bill, but if your engine blows out, the manufacturer still pays the dealership for all of the labor (at a pre-negotiated rate) to do the service. Dealers love those kinds of arrangements because it trains people to get their service at the dealer, so even after the warranty is over, they keep coming back for overpriced maintenance and repairs.
When a dealer sells you a "lemon" that racks up thousands of dollars in warranty-covered repairs it's actually a bonanza for them.
The conflict of interest Musk is referring to is that dealers won't want to sell extremely maintenance free cars because their revenue on the back-end would be miniscule.
BMW provides free service for 3 years, but few cars have major repairs during their first 3 years. The money in service is in the later years, when major repairs and maintenance occur.
Well then what about BMW with bumper to bumper service as only one example. That's a high end car that you don't pay for service for (iirc) 3 years. They cover everything. Wiper blades you name it. I think last I checked the same was true for Subaru and I think even Jeep Chrysler is doing this (may be wrong about that one).
And that's not a conflict of interest but rather a business model. In the case of cars which do make money from service they therefore in theory have a lower price for the vehicle.
This argument is like saying that you are a better airline because you don't charge for luggage. Presumably that extra revenue allows you to offer lower ticket prices. And surprise that is what happens. Back when airlines were regulated (and had less competition) and they charged way higher prices they didn't have to nickle and dime you to make a profit.