Former Tesla Exec Says Traditional Dealership Model 'Would've Ended' Company: 'Existential Threat To EVs'

Former Tesla Inc TSLA executive Rohan Patel on Sunday pinned the decision of the EV company not to pursue a traditional dealership model for vehicle sales on “survival.”

What Happened: Patel said in a post on social media platform X that going through the traditional dealership model would have ended Tesla. Dealership, he said, is an existential threat to EVs in the United States.

“People still ask me why Tesla decided not to use franchise dealers. My answer: survival. Going through the traditional dealership model would've ended Tesla,” he said.

Patel was responding to an X user and EV enthusiast David Roberts, who recounted his experience buying a plug-in hybrid version of the Toyota RAV4 Prime at a dealership. The employees at the dealership knew little about the particular model, its specifications, or price, he said, while noting that it didn’t have the particular model he was looking to purchase.

“Jesus. I’m scarred. Someone please tell me how to lease an RAV4 Prime without ever, ever talking to another employee of a car dealership,” the person concluded.

“@drvolts uncovering what Tesla figured out as an existential threat to EVs in the United States over a decade ago,” Patel added.

Why It Matters: Patel was Tesla's vice president of public policy and business development before he left the company in April after the EV maker announced that it was laying off at least 14,000 of its global workforce.

Tesla employs a direct sales model different from the dealership approach. Customers can order a new Tesla vehicle or visit a Tesla store online. Demo drives, too, are available via appointment online.

In April, Tesla CEO Elon Musk said that the company is aiming to simplify and streamline the whole Tesla sales and delivery system as it has become “complex and inefficient.” He was responding to a user on X who noted that the company has dropped discounts on inventory vehicles in the U.S.

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