Tesla, Rivian, Lucid take $910 million profit from traditional dealers in California – Autoblog -Dlight News

Tesla, Rivian, Lucid take $910 million profit from traditional dealers in California - Autoblog

In news that sounds like injustice or schadenfreude, depending on how you feel about the traditional dealership model, the industry publication Automotive News, reports that direct-sales operations like Tesla’s have exacted a huge opportunity cost on California, based on data from JD Power. Dealers – robbed them of $910 million in unrealized profits last year. Divide that by the state’s 1,303 brick-and-mortar dealerships, and the lost profits come to about $700,000 per store. Tesla, Rivian and Lucid all sell directly to consumers, adding up to 12 percent market share in the state last year. Part of that wound is decidedly self-inflicted on the part of dealerships and establishment automakers. Their supply of electric vehicles is dwindling, meaning there isn’t much availability on car lots, as research by the Sierra Club earlier this week showed. Two-thirds of dealerships contacted by the club do not have EVs on their lots, and in California, where demand is high, supply was shown to be particularly low. Meanwhile, Tesla had no such supply constraints; Dealerships have pushed some customers into Tesla’s arms. How JD Power arrived at the $910 million estimate: 193,707 new vehicles were registered in California last year, including Teslas, Lucids and Rivians. (188K of those were Teslas.) Franchised dealerships averaged $4,700 in gross profit per vehicle transaction last year. (That’s what a brick-and-mortar could have done on these lost sales. Tesla’s per-unit profit is believed to be significantly higher.) Total: $910.4 million, give or take. Here’s how things are shaping up in the state where EVs are the hottest. Traditional dealers elsewhere want to see this as a sign of trouble to come. “Production rules this industry,” Brian Maas of the California New Car Dealers Association told AN. “Dealers should go to their OEMs and ask for a product to beat Tesla.” For a deeper dive, check out the full report in Automotive News (subscription required).

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