Tesla’s online car buying model is making dealerships a thing of the past

The growth of online car buying has suggested that physical showrooms and dealerships could eventually become a thing of the past, according to reports.

Since petrol vehicle sales have steadily declined in the past few years, the development of electric vehicles is likely to blame, Tesla in particular. The “Tesla Effect” is something Teslarati‘s own Simon Alvarez has touched on in the past. It is evident that Tesla has caused a transition to electric vehicles from the tradition gas-powered machines, and it is evident with the numerous manufacturers, like Volkswagen and BMW, who have promised to gear their production lines toward battery-operated cars. Volkswagen has even stated that it will begin producing its own lithium-ion batteries.

Electric vehicles are also becoming more and more advanced by the day. This is evident with Tesla’s recently released V10 update that allows people to utilize Smart Summon in order to provide convenience in any number of situations, Theater Mode that will allow owners to watch videos while their car charges, and other added features. With over the air updates available to Tesla owners, owners of traditional combustion engine cars everywhere must feel a sense of displeasure in knowing that the car they drive now will likely always be the same as what it was when they bought it.

Import price increases and falling sales have caused dealers of internal combustion engine (ICE) vehicles to feel an immense form of pressure. But perhaps the convenience of online vehicle buying in conjunction with the increasingly more appealing electric vehicle is causing dealerships to close their doors for good. The Future of Car Retailing found that over 40% of people do not end up buying a car because of the inconvenience and pain that the car-buying process causes. 1-in-3 people said that they would trade in their vehicles quicker if the process and experience was smoother.

“Today a lot is spent on the physical forecourt and the offline retail experience. This creates a mismatch between where car buyers are spending their time — online — and where retailers are spending their money — offline. As the whole industry evolves and takes a more digitally-led role, there’s a huge opportunity to streamline costs,” the report said.

Tesla stated in late February 2019 that they would be transitioning completely to online sales after the release of their $35,000 Tesla Model 3 Standard Range. However, we are now eight months past the fact, and Tesla continues to keep the doors of its many physical retailers open with no foreseeable end in sight.

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