On the surface, the fear is hard to fathom. In New Jersey, for
instance, sales of Tesla’s $70,000 Model S reportedly number in the
hundreds. But if you dig a little deeper, it becomes obvious why dealers
are worried. They don’t just fear Tesla’s cars. They fear Tesla’s plan
to create a world where you never have to bring your car into the shop
again.
The first and most striking way Tesla kills the dealer service
department cash cow is downloads. As part of its sales pitch, Tesla says
you should think of its Model S sedan as “an app on four wheels.” That
may sound like vacuous Silicon Valley marketing copy, but the company
isn’t just being metaphorical. Software is at the heart of what keeps
Teslas running. These internet-connected cars are designed to
self-diagnose their problems. The vehicles can also download software
fixes or updates — even new features — much like an iPhone when Apple
puts out a new version of iOS. When fixes happen over the air, there’s
no need for a shop in the first place.