Musk: Tesla May Eventually Use Car Dealers But Not Ones Who Have Been “Jerks”

Even though upscale electric vehicle maker Tesla currently only puts out around 35,000 cars a year, it’s already gotten under the skin of the auto sales business with its refusal to use the traditional franchised dealership model, leading some states to enact backward-looking laws blocking non-dealership sales of automobiles. But Tesla founder Elon Musk admitted yesterday that his company may eventually go the dealer route, but only with non-jerks.

During an interview at Tuesday’s Automotive News World Congress, Musk explained that his company is focused on two things: improving production and establishing its own stores around the country.

“Tesla’s been production-limited really since we came out with the Model S,” he said. “Most of our focus is actually on production growth as opposed to demand generation.”

He did note that Tesla was able to double its production in a single year, which he believes is an impressive feat for a product with such a complex supply chain.

But until Tesla has ramped up its production to feed potential franchised dealerships, its small but growing number of company-run storefronts is sufficient, said Musk.

“At some point we’d consider franchised dealers but we want to first establish a few stores of our own,” he explained, saying that Tesla is open to compromises like the one the company struck in New York, where it is limited to five stores before it has to use a franchised dealership.

“We’re okay with a compromise of that nature in other states,” said Musk, calling out Michigan, which recently clarified the state law to make it very clear that Tesla stores are currently not welcome.

Part of the need for the Tesla storefronts is consumer education, claimed Musk: “It is hard to sell electric cars; it’s a lot more effort to sell it than a gasoline car. There’s a lot more education needed.”

Without putting a timeline on when it would be open to the dealership model, Musk left the door open to the possibility.

“We can transition later, if we find the right partner. We would only do this if we were sure the customer would have a really good experience,” he explained, later cautioning, “If you’re a jerk to us, we’re not going to turn around and try to do a partnership later.”

If Tesla is going to grow as Musk predicts, dealerships seem like an inevitability. His company can currently handle direct sales of the relatively few vehicles they sell.

But he hopes to be in full mass production of the upcoming Model 3 — which should get upwards of 200 miles on a single charge and cost around $35,000 — within five years and expects to be selling millions of vehicles a decade from now.

Musk said that he doesn’t see the recently revealed Chevy Bolt as a threat to his Model 3, even though they are both touting the same mileage and price points, because eventually all cars will be electric vehicles.