According to a recent analysis, Tesla and other direct-to-consumer EV automakers may have cost California dealers up to $910 million in gross profit.
The biggest losers in terms of gross profit were luxury dealerships, but the six publicly traded new-vehicle retailers were hit hard, according to an analysis by Automotive News. These dealerships will average profit between $5,300 and $6,700 per vehicle. However, with the loss of market share, the dealerships saw a loss of between $800,000 to $1 million per dealership in 2022. Now it is unknown how much of this is due to direct-to-consumer options or the traditional OEMs’ inability to produce enough vehicles to meet demand.
Much of this is due to traditional automakers struggling to bring EVs to market in California while direct-to-consumer options were able to deliver units. Last year, Tesla, Rivian and Luci made up around 71 per cent of EV sales in the state, which means that traditional dealerships only had 29 per cent of the market.
In 2023, things could change with Ford, GM and others releasing more EVs and getting ahead of COVID-19 and the supply chain they battled over the last few years. With EV prices continuing to skyrocket and demand staying strong, those same dealerships may see record profits soon enough. However, it is up to the traditional OEMs to produce vehicles to beat out the direct-to-consumer both in numbers and in specs.