A common myth perpetuated by advocates for direct sales automakers is that companies that sell vehicles directly to consumers create more local jobs than local dealerships. This couldn’t be further from the truth – in reality, dealerships bring in far more job growth and tax revenue in local communities compared to their direct sales counterparts.
Let’s look at the facts. In the United States, direct sales automakers provide a fraction of the jobs that dealerships contribute to their communities. Tesla, for example, employs less than 100,000 people, a quarter of which are based in California. Other major direct sales automakers, Rivian and Lucid, employ only 10,400 and 3,900 people, respectively.
Dealerships, on the other hand, directly provide a total of more than 1.1 million jobs, and they support an additional 1.18 million jobs in industries that service and do business with auto retailers. These jobs are critical, especially for providing tax revenue to many local communities. In total, 15% of state and local tax revenue comes from dealerships. Dealership profits are reinvested into their communities, while direct sellers like Tesla, who get federal tax incentives, put taxpayers on the hook for every vehicle sold because of federal and state subsidies.
Local dealerships continue to provide stability and revenue to their communities across the country and remain places where Americans can find good-paying jobs and consistent upward mobility. Direct sales competitors still have a long way to go when it comes to driving growth.
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