Revenge 248
franchise dealers have a fundamental conflict of interest
between selling gasoline cars, which constitute the vast ma-
jority of their business, and selling the new technology of
electric cars,” Elon said. “It is impossible for them to explain
the advantages of going electric without simultaneously
undermining their traditional business.”^244 The problem is
that auto dealers get most of their revenues from servicing
the cars, and an electric car requires less service than a
gasoline car. “It’s harder to sell and they make less money
from servicing so for sure we will be the last thing they
sell,” Elon said.^366
When we visit a car dealer, we have already decided
which car to buy. It’s often a gasoline car with the same
brand as the car we already own. So the Tesla Stores had
to be close to potential customers in malls and at similar
locations. It’s exactly like the Apple Stores. “We may not
be able to get them to drive ten miles to check out our
products, but we can get them to walk ten feet,” Jobs said.
“If they’re passing by, they will drop in out of curiosity, if
we make it inviting enough, and once we get a chance to
show them what we have, we will win.”^3
In 48 US states, it’s illegal for a car company to own the
dealer of the cars sold, so these stores have caused some
stir within the auto industry. The idea behind the law is to
prevent automakers from killing competition and driving
independent franchises out of business. “Franchised dealers
can’t compete with manufacturer-owned businesses be-
cause they can’t spend as much on facilities or advertising,”
a New York dealer said.^204