Tesla Motors only sells its "marvelous product" directly—but if it ever moves to a retail model, AutoNation would be "completely open" to selling its vehicles, said Mike Jackson, the chairman and CEO of the dealership giant.
"It's an excellent electric car," Jackson told CNBC's "Squawk Box" on Thursday. "If you take the Fisker, which was a terrible car, the company is now bankrupt. You take Tesla, which is an outstanding car, and the company is really finding its way."
By all accounts, Tesla cars are well-made and safe, but the brand has also gotten a boost from its Silicon Valley-cool factor and the cult-of-personality that is billionaire founder Elon Musk, who's said to be the inspiration behind the "Iron Man" movie depiction of Tony Stark.
(Read More: Three things that could slow down Tesla)
Musk tweeted Thursday morning plans for a cross-country trip in a Tesla Model S to prove it's not that tough to keep it charged.
Shares of Tesla are up nearly 400 percent year-to-date, bringing the Palo Alto, Calif.-based company's market cap to about $20.5 billion.
(Read More: Cramer explains Tesla stock surge)
Meanwhile, in California, the nation's biggest auto market, Tesla has become the third best-selling luxury car. Not the third best-selling electric luxury car in the state, it's the third best-selling luxury car there, period.
"Tesla has a direct model at the moment. But when they want to go to higher volumes, I think they're going to need a different retail model," said AutoNation's Jackson. "And I'd be completely open to selling Teslas. It's a marvelous product."
A recent report from the California New Car Dealers Association showed the Model S—the only Tesla on the market so far with a $70,000 price tag—had 4,714 registrations in the first half of 2013 in the state, trailing the Mercedes E-Class and the BMW 5 Series but beating out the Lexus GS and the Audi A6.
In June, Tesla's popularity soared with nearly a quarter of this year's California registrations coming in that month alone.
"If you buy in California, you're going to get a $7,500 check from the [federal] government," Jackson explained. "You get an additional $5,000 from the state of California. You'll also get a credit for putting in a home-charging station. You get a lot of money in California."
California accounts for about half of Tesla's nationwide sales.