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If you can’t beat ‘em, join ‘em: This dealer is selling lots of EVs, including new Teslas
Posted on April 03, 2020 by Charles Morris
It’s a myth that you can’t buy a Tesla at a car dealer. Used Teslas have found their way to independent dealers around the world. Xcelerate Auto, a third-party provider of extended warranties, financing and leasing, has been working with dealers who sell Teslas for years. However, these are mostly used vehicles. We were surprised to learn (via Electrek) that there is at least one dealership that’s doing a brisk business in brand-new Tesla Model 3s.
Above: A line-up of Teslas (Image: EVANNEX; Photo by: Casey Murphy)
JN Auto, an independent car dealer located Québec’s Eastern Townships (Cantons de l’Est) region, has been selling regular old cars since 1982. A few years ago, the company started adding used plug-in vehicles to its inventory. Partner and sales associate Sébastien Marcotte has been an EV fan since buying a Ford C-MAX Energi and a Nissan LEAF. He sees EVs as a great choice for local car buyers—this is a rural region where people have long commutes, and stand to save plenty on gas. Furthermore, Québec has one of the cleanest electrical grids in the world.
State-owned electric utility Hydro Québec operates 63 hydroelectric power stations, which generate enough power for the province’s needs and then some—the company also supplies some 10 percent of New England’s power requirements. The company is the fourth-largest hydropower producer in the world, and its residential power rates are among the lowest in North America. Hydro-Québec is also a major supporter of EVs. It operates a public charging network called The Electric Circuit, which offers over 2,400 charging stations in Québec and Eastern Ontario.
When JN Auto first started selling EVs, most of its inventory consisted of Nissan LEAFs and Chevrolet Volts. However, the company wanted to have a wider range of choices for its customers, so it began importing used EVs from the US, including Chevy Bolts, Chevy Spark EVs and BMW i3s.
As most any EV buyer outside of California will tell you, trying to shop for an EV at a traditional dealership can be a frustrating experience—dealers usually have few or no EVs in stock, and sales personnel don’t have the product knowledge to be able to answer questions. Folks who were interested in buying plug-in vehicles started finding their way to JN Auto, which was always happy to put them in a used EV. Now, the company’s sales force generally keeps around 50 plug-ins on the lot, and told Electrek they wish they could get their hands on more.
As a way to win over skeptical buyers by letting them try driving electric, JN Auto started offering short-term rentals of a couple of weeks. These extended test drives resulted in a lot of sales. When Model 3 became available in Canada in 2018, customers started to ask if they could rent one. JN bought a Model 3 for its rental fleet, and found that demand was prodigious. Soon, customers were asking if they could buy a new Model 3 from JN Auto. And the rest, as they say, is history. JN has sold hundreds of new Model 3s, and these days, it’s buying them from Tesla by the trailer-load.
Why would a buyer pay a mark-up to buy from a local dealer, instead of ordering directly from Tesla? In some cases, JN is able to offer buyers a better deal on their trade-ins than Tesla can, and/or save them a trip to Montreal. But the main attraction is that many buyers really prefer to have a local dealer for service and support, and they don’t mind paying a little extra.
The choice between the traditional third-party dealership model and Tesla’s direct sales model is usually seen as an either/or proposition. But could independent dealers work with Tesla (or other emerging EV-makers such as Rivian) in a way that benefits all concerned? Electrek’s Charles Benoit believes that “there’s room for a mutually beneficial relationship without demanding franchise exclusivity.”
Experienced auto salespeople know that having a wide variety of models on the lot tends to result in more closings—buyers who feel they’ve checked out all the options are more likely to be ready to part with their money. Different car buyers have different needs, so if there were more ways to buy EVs, it stands to reason that more buyers would go electric—and that’s what we all want to see.