Press

Fran O’Hagan sees a striking paradox in Tesla saying it will close down almost all its dealerships and switch to an online sales strategy.

He is president and CEO of Pied Piper Management, a consultancy that today releases results of a mystery-shopping study on how effectively dealerships brand-by-brand handle electric-vehicle shoppers.

Tesla scored first. “It’s so ironic,” O’Hagan tells Wards.

Referring to the dramatic retailing pivot, O’Hagan says of Tesla founder and CEO Elon Musk, “He’s making a mistake. Many EV shoppers are buying their first electric vehicles. They need help, even hand-holding, from a salesperson. Maybe that won’t be the case in 20 years. But it is now.”

Tesla will keep open a few high-traffic outlets but close the rest and shift to online sales only. Currently, the EV-only brand has 102 stores in 23 states, most in Florida and its home base of California. Unlike the traditional franchised dealership system, Tesla outlets are factory-owned.

Another irony: Although Tesla scored highest on Pied Piper’s EV sales-effectiveness study, it placed last for five years in the company’s annual ranking of overall dealership sales effectiveness.

Of that study, O’Hagan says some Tesla salespeople were “brilliant,” but many others acted like museum curators who politely answered customer questions but failed to do other crucial things, such as ask for the sale.     

In Pied Piper’s first-ever EV-related benchmarking index, Tesla scored 118 followed by BMW (111), Nissan (107), Volvo (105) and Mitsubishi (104).