Tesla Faces Tough Regulatory Hurdle From State Dealership Laws 309
First time accepted submitter vinnyjames writes "States like Arizona, Texas, Massachusetts and North Carolina either have or have recently added legislation to prevent Tesla from selling its cars directly to consumers. Now there's a petition on whitehouse.gov to allow them to sell cars directly to consumers." Laws that protect auto dealerships aren't newly created for Tesla, though, as explained in this interview with Duke University's Mike Munger.
Middlemen: the official plague of the modern age (Score:5, Insightful)
I think we've just figured out what the next big thing is. Mercantilism should have disappeared centuries ago.
Re:Middlemen: the official plague of the modern ag (Score:5, Insightful)
Three things,
Middlemen don't like being cut out. those that try find themselves cut.
Manufacturers, factories, etc don't want the headaches of dealing with uniformed idiots. Ever work a computer Hell desk? yea that has been going on for as long as we have had machines. The average person is barely above being an idiot and half the population is dumber than they are. I have explained the same thing to the same person 30 times in the last 3 months she still doesn't get it. She can't open her mind up to possibilities other than what she already knows.
Lastly, Middlemen provide slack, and options for the supply chain. In today's tight supply chains they are even more important than ever. As if the factory doesn't have your part your stuck unless your lucky enough to have a middleman with extra.
Re:Middlemen: the official plague of the modern ag (Score:5, Insightful)
Manufacturers, factories, etc don't want the headaches of dealing with uniformed idiots.
If manufacturers don't want to deal directly, they why do we need laws prohibiting them from doing so?
Middlemen provide slack, and options for the supply chain.
If middlemen really added value, then customers would be willing to pay for that value, without government coercion.
Re:Middlemen: the official plague of the modern ag (Score:5, Interesting)
Re:Middlemen: the official plague of the modern ag (Score:5, Interesting)
So the argument against removing the laws (for all auto manufacturers) and making the dealers "sell" themselves to the auto manufacturers is what exactly? That dealerships lobbied really, really hard to sell you a product that they add no value to? Can you say "crony capitalism"?
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Do manufacturers of other cars have to sell through dealers because of the laws? Or did dealers get these laws passed so manufacturers have to sell through them? One way could be interpreted as dealers just wanting to have a level playing field. The other way could be interpreted as dealers protecting themselves from competitive alternative business models.
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Re:Middlemen: the official plague of the modern ag (Score:5, Insightful)
If middlemen really added value, then customers would be willing to pay for that value, without government coercion.
Well, there are middlemen that add value, but they're not typical auto dealerships. They're facilitators that help you locate the car you're looking for. Many of them have agreements with dealerships that will get you the best price or near it without having to dicker, and you only pay a [relatively] small commission to the "dealer" that you're actually dealing with. This only really makes sense when buying a fairly new vehicle, otherwise the commission can be disproportionate. Of course, their value would fall without this sort of protectionist nonsense.
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That's wrong.
a) the show room is a value add regardless off who pays for it, and it's cheaper to the consumer for the manufacturer to do it. There is no middle many percentage on top.
b)" you would have no choice on what dealer to go to, " Says who? That would only be the case if separate dealerships weren't allowed. and manufacturers still have to compete against other manufacturers.
c)" consumers will go to what dealer provides the best value and service." as they would continue to do. again, you are makin
Re:Middlemen: the official plague of the modern ag (Score:5, Insightful)
So, why not allow the option of middlemen, and the option of direct sales. If what you say is true then middle men will foster a better experience, capitalism will prevail, and companies dependent on direct sales will falter.
Right?
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I'd like to, though. Abolishing these laws would be one step in that direction.
Re:Middlemen: the official plague of the modern ag (Score:5, Funny)
The average person is barely above being an idiot...
I admire your optimism.
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Half of all people score in the lower 50% of intelligent tests.
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I thought No Child Left Behind was supposed to fix that.
Re:Middlemen: the official plague of the modern ag (Score:5, Insightful)
I think of that fact every time I sit in a doctor's office. Half of them are below average, too. :-(
Yes. They are called general practitioners. The other half tend to specialize in higher paying fields, like surgery or anesthesiology.
For better or for worse, medical schools set their standards so high that only the most qualified (typically overqualified) ever get the opportunity to even study medicine, let alone practice. You may have a physician who was at the bottom of his class, but he's still likely to have more knowledge and intelligence than anyone else working or waiting in his clinic. It's not like IT, where there is a job for everybody, with a very wide spectrum of credentials or abilities (or lack thereof). Nor is it like those with a liberal arts degree, where employers just presume the degreed applicants don't know a thing about working life and have them start at the lowest position in the company, most often side-by-side with non-degreed hourly employees, and then only promote those noobs who show some potential to figure it out and actually make some effort to show up on time, properly dressed, and without a bad attitude.
Given that the student loans for the professions can easily top $100k, success is the only option. There is no bankruptcy allowed, and without a physicians salary there is little hope of ever having more than a Spartan existence, regardless of how earnestly one tries to pay off such loans by any other means.
Re:Middlemen: the official plague of the modern ag (Score:4, Interesting)
Don't forget another reason for resellers - manufacturers don't want to deal with 1 piece orders constantly - it's way too much overhead for them. It's cheaper for them to sell 100 units to one person, then that person to sell it to 100 people, than for the manufacturer to sell to those 100 people.
Also, resellers can handle warranty issues locally - manufacturers then can deal with the reseller to handle it - e.g., the reseller can exchange 5 units to customers, then the manufacturer can send 5 extra units as replacements. Less overhead for the manufacturer, and local sellers may know their market better.
There are exceptions - like Apple, who can handle it all vertically, but they tend to be the exception. Even then their ordering systems aren't as slick as say, Amazon's.
Re:Middlemen: the official plague of the modern ag (Score:4, Insightful)
In which case you don't need a law preventing manufacturers from doing so - they'll use resellers because it is cheaper/better for them. That there is such a law is usually evidence (not proof, there are other possible explanations) that manfacturers do in fact want to sell directly. If no one wanted to speed we wouldn't need speed limit laws after all.
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That used to be true. Nowadays there's this thing called "the internet." Maybe you've heard of it?
Re:Middlemen: the official plague of the modern ag (Score:5, Insightful)
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Now there's a petition on whitehouse.gov... (Score:4, Interesting)
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Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
Typo... 74K short. Although now it's only 72K short, seems it's working...
If there's one thing business can't stand it's competition - given that the Big 3 conspired to kill the Tucker, you have some idea where the original legislation found its roots and monetary $upport (when it came to buying votes to pass the original bill). Every business would love to be a monopoly, barring that, they settle for an oligarchy.
Re:Now there's a petition on whitehouse.gov... (Score:4, Insightful)
Please Mod the parent up. He's the only one that got the Tucker reference to where the laws originally came from.
Laws that protect auto dealerships aren't newly created for Tesla, though ...
Nope, a lot of them were created to kill Tucker in the late-1940s. Luckily, Elon has a few other hits to back him up so even if the automotive industry quashes Tesla's dreams he's still got rockets and Paypal.
Re: Now there's a petition on whitehouse.gov... (Score:5, Informative)
Lets transpose tucker to today.
The consortium (a-pull, prounounced ahh-pull) took Tucker to court for patent infringement. A-pull stated that the Tucker breached many existing parents, including: 4 wheels, headlights, steering wheel, seats, brakes, windows, an engine, side mirror, ignition, the list goes on.
A-pull fanboys rejoiced when the courts upheld the 2013 verdict and sent Tucker corp bankrupt. "This is a win for protection of consumers", stated A Congress Member, when asked a about the outcome.
Sound familiar?
"Sound familiar?" Well ... no, it doesn't. Tucker won his trial, although he did go bankrupt. His trial wasn't about patent infringement, it was about securities fraud.
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Re:Now there's a petition on whitehouse.gov... (Score:4, Insightful)
Saturn was a subsidiary of GM and, because of that, considered to be under the same set of rules as GM.
Thanks for this, but the matter is still not clear to me. How was GM able to circumvent the manufacturer != dealer rules?
They didn't. Saturns were sold at GM dealerships, just they tricked some hapless suckers into thinking that they were buying them direct form the manufacturer. Want a Saturn part today? Call your local Chevy dealership.
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Whereas the current program, while arguably flawed and misguided, is an attempt to protect the country
And you called the poster you were responding to an "idiot?" Who's going to protect it from its protectors?
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Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.
I'd be the first to agree that the feds(the executive branch, no less, get your fucking civics in order, people...) are the wrong place to go; but I'd bet a nontrivial amount of money that the Interestate Commerce Clause is 'elastic' enough to handle this one, if Congress felt like it.
It would be bad form, and strikes me as unlikely to happen; but I suspect that if the feds felt like trying, they'd probably get jurisdiction.
Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
If a federal judge can strike down [nytimes.com] Virginia's ban on out-of-state trash processors shipping their trash to Virginia landfills, striking down barriers to Tesla selling direct to consumers across state lines seems like a no brainer to me. And I'm a states rights advocate.
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If a federal judge can strike down [nytimes.com] Virginia's ban on out-of-state trash processors shipping their trash to Virginia landfills, striking down barriers to Tesla selling direct to consumers across state lines seems like a no brainer to me. And I'm a states rights advocate.
And this post winds a kewpie doll. If I had mod points you'd get a bright and shiny one for understanding this and stating it clearly. A federal court should be able to throw out a law which was cynical enough to be designed to protect dealerships. Smacks of the 'Old Boy Network', doesn't it?
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WTF is that suppose to mean? Kewpie dolls weren't mechanical. If anything, it might mean something akin to "pissing against the wind."
Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
For all the times that we see the interstate commerce clause treated as a blank check for federal power, this is one time when it would actually be appropriate. Preventing one state from erecting barriers to trade with another is exactly what that clause had in mind.
Guess Washington is too busy regulating everything else they can see to even notice when an opportunity to wield power constitutionally comes along.
Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
I really don't see how anyone can perceive this as stretching the ICC. This is precisely the kind of thing it is actually for! States are erecting unconstitutional barriers to trade of goods from other states, that's exactly when congress should invoke the ICC.
Re:Now there's a petition on whitehouse.gov... (Score:5, Interesting)
And that's also precisely why they won't.
Anything that falls under "shit they SHOULD do" also usually falls under "stuff that will piss off special interests"
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> It doesn't really matter since the federal government doesn't have jurisdiction anyway.
Ahahahahahah, they've invoke the Commerce Clause for less.
Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
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Because selling cars manufactured in another state isn't interstate commerce? Hell, growing your own vegetables for your own consumption has been ruled to be interstate commerce.
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Well using the all mighty interstate commerce clause, this could be considered a federal matter as it bans a company from one state selling in another. I mean one group in one state selling to people in another is sort of the root of 'interstate commerce'.
I believe this is why saturn has no dealerships in my state, but they do in Ohio (next door). Though I've never actually heard that we have such a law in place.
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Except that the Supreme Court has ruled otherwise such as Exxon Corp v. Maryland [wikipedia.org].
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They certainly do have logic. That's why they write their lengthy opinions so that they can explain their logic. And in this Exxon case they did give reasons why this law did not violate existing federal laws.
Re:Now there's a petition on whitehouse.gov... (Score:5, Insightful)
The SC has ruled that people aren't citizens because of the color of their skin (Dred Scott), that corporations are (Citizens United), and that personal crops are interstate commerce (Wickard v. Filburn). None of which stand up to plain reading or common sense.
The Supremes are in contempt of simple logic and common sense. They're illogical - as political as the Legislative and Executive.
The SC is the biggest flaw in our system - it should have consisted of a rotating chamber of state justices to provide a true "check and balance." The Feds deciding what the Feds can do is ludicrous.
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I agree with you generally here. I find the flaw lies in the amendment that had US senators elected by popular vote. The Senate was intended to be a body representing the state governments, a check on federal power in favor of states' rights. If US senators were appointed by state legislatures, as the Constitution originally intended, we'd effectively have a rotating chamber of state justices. Any appointment to SCOTUS has to get past the Senate, the Senate can choose to only appoint those people that a
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Except that the ban on shipping cars direct to customers would apply to both Tesla, as well as out of state car dealerships if for some bizarre reason you bought a car from said dealership and wanted it shipped to you. Operating a dealership also adds a large surcharge on the item in question. As such, it violates 3 and 4 of the majority holding.
Re:Now there's a petition on whitehouse.gov... (Score:5, Informative)
As someone who has actually bought a car from an out-of-state dealership and had it sent to me, I can say that not only is it legal, but that states have special forms of registration just for this purpose (I still paid registration fees in the state the car was shipped from, but they were very small and accompanied by a warning that'd I'd owe a fine if I tried to register the car in that state within a year).
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It doesn't really matter since the federal government doesn't have jurisdiction anyway. It wouldn't be much different from the federal government telling states that they can't have their blue laws. In this case it just happens to be car dealers rather than bar owners.
Well...a petition to the White House is ridiculous. However, I can see you'd be able to challenge the law in a Federal Court. Tesla manufactures its cars in California, and when I buy one online, I'm buying it from California, where it's a perfectly legal sale. Then they're delivering the car, which is already mine and fully paid for, to me in NC. Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in. That's definitely in the federal gov
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Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in.
I think this alone would be enough to overturn such state laws in federal court. One doesn't need the other branches of the federal government to interfere.
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Prohibiting that sale is interference with interstate commerce, which the state government doesn't have jurisdiction in.
There's no actual law that prohibits interference with all types of interstate commerce by the states. The constitution gives the federal government authority to create laws regulating interstate commerce but that does not preclude states having their own laws commerce with its neighbors as long as these do not conflict with federal laws.
Or at least this is the interpretation of the interstate commerce clause that the supreme court has been upholding for a very long time. The "Dormant Commerce Clause" doc
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Blue laws say that no one can do certain things on certain days. What dealership laws say is that one must have a dealership relationship with the manufacturer to sell new vehicles. The difference being that blue laws effect everyone while dealership laws only effect non-dealer sellers. It is very different and probably does fall under the Commerce Clause.
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I just noticed something that makes it definitely a Commerce Clause issue. Basically some one out of state can not sell a new car to some one in state. That is easily restraint of interstate trade. I wonder if there is any other product restrained that way.
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It's OK, this isn't 1950. Most of us shop for cars on the internet. We show up to a dealership for a test drive, the salesman hands us the keys and sits in the car. He then makes a terrible offer, I say I'm still looking and wander off. We then negotiate the price on the internet, and play dealers off against each other until they won't deal anymore. Then we sign a paper and drive a car away (or in my case, had it delivered).
I haven't spent more than 15 minutes in a dealership in over a decade. Not being ab
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Regulation is good when it forces other people to do what I want/support... Regulation is bad when it lets other people force me to do things I don't want/support.
I do love the hypocrisy of Slashdot.
I've found that in general, slashdot users tend to support regulation that leads to more freedom, and are against regulation that suppresses freedom especially when it comes to the rights of companies to impose their will on individuals. For example: supporting reform of the patent system to stop patent trolls, being against regulation that supports DRM or limits the ability of consumers to use content they own, being for regulation to enforce net neutrality, being for regulation that prevents a state from
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Where is the /. user that supports the Citizens United Supreme Court ruling?
Before the ruling, I as an individual was not allowed by buy a TV ad for my favorite politician within 90 days of an election.
After the ruling I can.
I have seen nothing but hatred for that ruling, which increased freedom, here on /.
Truth - If the regulation oppresses those against government it is good here, period.
Can you post a link to the Slashdot story that discussed the ruling?
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"Citizens United" doesn't sound like a person. It sounds like a corporation. The idea that a limited liability entity should also have limited rights is by no means hypocritical.
Your personal fantasy is a red herring.
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Where is the /. user that supports the Citizens United Supreme Court ruling?
Before the ruling, I as an individual was not allowed by buy a TV ad for my favorite politician within 90 days of an election.
After the ruling I can.
That's great! How many TV ads are you going to buy for your favorite politician?
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Yes, regulation is a tool. When applied correctly, we support it. When applied incorrectly we oppose it.
Pro/anti regulation religion is silly politics.
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You know that more than one person expressing different opinions is not, in fact, hypocrisy, right?
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Regulation is good when it forces other people to do what I want/support... Regulation is bad when it lets other people force me to do things I don't want/support.
I do love the hypocrisy of Slashdot.
So just to be clear, you believe it would be hypocritical to oppose regulation permitting slavery, but support regulation requiring safety inspections before using a public road?
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Really? You had to Godwin a Tesla article?
No. I did not have to.
Protectionism... (Score:4, Insightful)
I've seen your face before .. back when Michigan fought Japan through legislation in Washington DC. How have you been? I see you are on the rise again as people pretend you're their last, best hope.
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This was about preventing new players from cheaply entering the market.
Except, Tesla won in NC (Score:5, Informative)
Tesla victory in NC [engadget.com]
go figure...once they go on test drive....they love it.
rich car buyers vs rich dealership owners (Score:2)
Re:rich car buyers vs rich dealership owners (Score:5, Insightful)
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Count me in the latter group (except I kinda like going to the dentist) -- you're typically way better off getting a newish used car off Craigslist where someone else has paid the "I drove it off the lot instantaneous depreciation" cost. All you pay for is the car that way.
Re:rich car buyers vs rich dealership owners (Score:5, Insightful)
There are plenty of people who would like to purchase a Tesla if they had the means, and Tesla has lower-priced cars on their roadmap. Just because this wouldn't affect someone right now doesn't mean they shouldn't support it for when they need it. It's the "first they came for X, but I said nothing" scenario. Just because you're driving a gas car now doesn't mean you shouldn't support Tesla or any other EV maker. I'm sure the various auto dealer associations would love to get a bunch of laws passed in their favor before Tesla releases their lower-priced models in a few years. If you don't want to see that happen, then now is the time to speak up.
Everybody has a horse in this race. (Score:4, Insightful)
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Can't speak to the wine thing, does sound bogus, but the MLS in each city is essentially OWNED by the realtors, it is a private database. Hell the name "realtor" is a trademark of NAR [realtor.org] - national association of realtors.
I do think we should have some sort of open MLS, I bet craigslist could make a dent there if they just beefed up the sophistication of their real-estate listings.
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I don't see how most people have a horse in this race right now.
Everyone who is paying attention has a horse in this race. Unless you support the notion that states should promote unconstitutional restraint of interstate trade as well as economic protectionism which harms consumers, you should oppose laws which require cars to be sold through dealerships.
Impossible! (Score:5, Funny)
Impossible! North Carolina and Arizona, at least, are libertarian paradises - very "business friendly" - that would _never_ pass legislation interfering with markets or freedom to contract. Never! There must be some misunderstanding.
sPh
There Some Reason (Score:3)
If they want to be really cool about it, they could have someplace you could deposit $50000 worth of bitcoins and have the car delivered directly to your doorstep.
Why does this law exist? (Score:2)
I'm sorry, this may sound stupid, but can anyone point me to directions where I can find something about WHY this is the case? I.e. why is it forbidden for car manufacturers in the US to sell cars directly to consumers?
I'm not native, so I don't know and it sounds outlandish for. The TFA has a link but the text there is awful to read, so any help really appreciated.
Thanks
a former European
Re:Why does this law exist? (Score:4, Informative)
It's not forbidden in the U.S. by the national (federal) government. Some local (state) governments do forbid it to protect a class of people called "car dealers".
Why you ask? Same reason the British forbid Indians from making their own salt: to protect the profits of a certain group. It's not unique to the U.S., I'm sure it happens all over the world. Is it fair? No it isn't.
Re:Why does this law exist? (Score:4, Interesting)
Thanks for the answer.
I probably was not accurate enough in my question. Question was rather "how this happened and still happens..."
Now, a little search provides a really good link I found: http://www.justice.gov/atr/public/eag/246374.htm [justice.gov]
I thought there was a real reason historically but it just seems that car dealers effectively lobbied their state governments to introduce these "Franchise Laws" after they were established. And it was in order to "... protect their investment in real estate and showrooms, etc..." - So, as you said, the traditional protectionist malaise as everywhere (reminds me of the stupid solar industry in Europe which actually managed to convince the EU Commission to introduce tariffs on Chinese solar panels... up to 67% ... now the Chinese are striking back with tariffs on European products *sigh* - will this never end?)
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Because then, as now, car dealers are businessmen. And hang out with the lawmakers.
Or are actual lawmakers themselves. Like Scott Rigell in Virginia. Who owns Freedom Ford. Do you really think he would craft laws that challenge the car dealer status quo? Not likely.
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I'm really confused by this... Europe is constantly being lambasted by some in America about the consumer protection laws restricting free capitalism. These kind of laws seem the antithesis of free capitalism - they're designed to keep the local rich rich. I don't see their purpose, at all.
This kind of law wouldn't last 5 minutes in the UK, let alone the rest of Europe. The salt tax on India is getting on for a century since it was repealed, prior to independence.
Rentseeking (Score:5, Informative)
Thus the laws were originally intended to protect consumers on the local level. Now, especially in the face of subversive business models like Tesla's, matters have changed. Local dealers are in closer league with manufacturers, the latter often even providing financing for purchases [wikipedia.org]. The arrangement is mutually beneficial: manufacturers can prevent upstarts like Tesla from getting a foothold in the market; dealers, acting as middle-men, can reap the rich benefits of rentseeking [wikipedia.org] through powerful lobbies targeted toward state governments. N.b., however, this arrangement does not prevail in all states.
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Thank you very much for this great explanation. Now I understand.
So, in fact, what is happening now is exactly what these laws were meant to prevent - e.g. with regards to Tesla Motors. I have experienced these unwanted side effects every time any government tried to regulate an industry with very specific laws with the intent of protecting one group of people from another... be it consumers against Big Business or one side of business against another.
Thanks again, this helped me understand the history of t
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I also occurs to me to note that a similarly vestigial system also remains in place in the form of the three-tier system of alcohol distribution [wikipedia.org]. Major producers of alcoholic beverages cannot sell directly to retailers or to the public in the U.S. (brew pubs and the like excluded, and there are many other state-level exceptions). Rather producers sell to wholesale distributors who, in turn, are allowed to sell to retailers. I needn't add, I am sure, that this makes for many taxation opportunities and this m
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With independent dealers, states hoped to insulate themselves from concentrated corporate power and force it to serve their communities if it wanted to sell to them.
Of course, all of that is a lot of bullshit, because dealers were never actually independent. They still had to form relationships with manufacturers, and they couldn't just force the manufacturers to sell them cars for resale. Therefore the manufacturers still wound up tightly coupled to the dealerships. As time has gone by, more and more special-purpose, maker-specific tools have crept into use (you can work on cars from the fifties and sixties with pretty much only generic tools; try that on cars from th
Re:Why does this law exist? (Score:4, Interesting)
For anyone interested, NPR's Planet Money team ran a very good story back in February on this topic. If focused on the entrepreneur behind carsdirect.com, who ran into the same obstacles in the 90s when he tried to set up a Web site to sell cars directly to consumers.
http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes [npr.org]
Relevant planet money story (Score:3)
Dealerships should be optional (Score:5, Interesting)
Having purchased a Tesla Model S the experience is the exact opposite of when I purchased a Toyota. Tesla's showrooms do not sell cars. They show them. When I went to the showroom I could ask questions without any pressure to buy the car. The only way to buy a Tesla is on their web site so there's no sales critters trying to get a commission. There are a myriad of options to choose from which allows you to get the exact car you want. I got the paint color, interior color and all the options I wanted. It went to the point where I chose the wheel colors and whether or not to have a rear carbon fiber spoiler (I chose not to). There's also no haggling over price. Tesla basically builds to order without having to deal with an inventory of cars. You order your car and they deliver exactly what you ordered, or in my case I picked mine up at the factory and took the tour.
At the Toyota dealership I didn't have much choice. I could choose any car as long as it was on their lot, plus there's the high pressure sales. The only thing worse than one of their car salesmen is a used car salesman (which they also sell there).
Dealerships don't really protect the consumer. As far as I'm concerned, they're leeches. A relative of mine bought a Fisker Karma and the dealerships are basically helpless since Fisker is more or less bankrupt in all but name. The warranty is basically worthless as is any pre-paid service and parts are unavailable. Since Fisker laid off their engineers even support is limited even if paid by the owner. The dealership my relative goes to is better than many. Many dealerships completely dropped any and all support for Fisker so the owners are completely SOL. There's nobody to even perform routine service on the vehicles.
I groan every time I have to have something fixed that's not under warranty at Toyota. They charge a premium for the service since they know that with a Prius you're unlikely to take it elsewhere.
Dealerships also wouldn't make nearly as much profit on service either. Tesla has vowed to not make a profit on service, but then again, service should be a lot simpler than a gasoline powered car. There's no transmission to service or wear out, only a simple gear reduction. There's no 5K mile oil changes, the motor is lubricated for 12 years. There's no fuel pumps or spark plugs to replace.
Since the number of cars sold is fairly low, a dealership would also be selling o
Tesla service consists of a 12,500 mile inspection, replacing the wiper blades and brake pads if needed (brake pads should last basically forever), rotate the tires, replace the cabin air filter and possibly flush the coolant. Service also may include hardware upgrades, software upgrades are distributed over 3G and can be applied by the owner whenever it's convenient.
Tesla has vowed to not make a profit on service. When I broke one of the clips on my roof they had to replace the entire panel next to the glass sunroof. If the panel were on my Prius, the dealership would probably charge $200-300 just for a replacement panel plus a fortune in labor. Tesla charged me $100 and $175 labor to replace it, which after explaining what they had to do to replace it was a bargain.
Things are quite different now than they were in the 1950.
Middlemen everywhere (Score:3, Interesting)
Usually it is in our best interest to go through a middleman as it ends up with savings for everyone. The middleman usually buys in bulk (thousands of items) and then sells to us (1 at a time) at a markup. The manufacturer gets the benefit of a steady, predictable cash flow while we get the convenience of buying one at a time.
Of course, that's how it usually works. Not everyone wants that though. In today's connected world we can pay a premium straight from the manufacturer for items custom created directly for what we need. Cars, as large capital investments for most people, are a perfect example of this - especially as the "premium" is usually the same price that you would be charged from the middleman anyway. For middlemen to survive they need to provide a "value added" effect to the merchandise and I do not see that happening with most car dealerships.
tl;dr version: You use middlemen every day, usually love it, but if they don't provide extra value they shouldn't exist.
Re: (Score:2)
Seems like these States are trying to invoke the Federal power to regulate interstate trade. That's a no no.
Some states still do it for liquor and other alcoholic beverages. The Feds have pretty much left them alone to do as they please since at least Prohibition. I don't know if it's Federal indifference towards alcohol or Constitutional issues at work.
Re: (Score:2)
I think the logic there is that sales over the counter aren't interstate commerce, so they're open to state regulation. Mail-order direct to consumers would be interstate and a Federal matter.
Of course that's the opposite of what the Feds claim when it comes to a lot of other regulation, where anything that crossed a state line at any point or involved any party in another state, no matter how peripherally, is "interstate commerce", but nobody said the government had to be consistent...
Re: (Score:2)
Everything is interstate commerce. [wikipedia.org] You can't describe any activity which isn't. No one can.
And that was a Republican AG.
Re:Federal Case (Score:4, Interesting)
All goes back to Wickard v. Filburn, under FDR's long-standing administration. Perhaps the most destructive Supreme Court ruling in our modern era. At a time when America was fighting Fascism abroad, this decision probably did the most to entrench Fascism, corporate hegemony and cronyism in the United States, usurping the natural rights of free citizens as well as transferring power from the state level to Federal government agencies.
The logic behind the Wickard v. Filburn decision seems to stand in opposition against the small government ideals of conservatives, the civil liberties of individuals as espoused by liberals, and the value of a free market as advocated by libertarians, yet this attitude seems to be growing more pervasive throughout our government, especially on the Federal level, with rarely any outcry from voters, the politicians they elect, or from hardly any of the many outspoken critics of our government and society. What is behind this sheeple mentality?
Re: (Score:2)
21st amendment basically gives the states unlimited power when regulating alcohol.
Re:So why not have Tesla dealers? (Score:4, Interesting)
From what I understand, Elon Musk wants to control the Purchase Experience as close as Apple does with their computers.
Remember the time before Apple Stores? When you went into a computer store to buy a Mac, the sales guys would try to sell you anything else but not a Mac. Because it was so much easier for them.
With the Apple Store, that all changed and the purchase experienced is fully managed by Apple.
Elon Musk, being an adherent of Steve Jobs' approach, also wants to display his products in the best possible way and he believes that only sales people who exclusively sell Tesla cars (i.e. stores that only sell Tesla cars) can sell it right and that these people should then be also employed by Tesla Motors.
I get that and if I was him, I would do the same. This is really a crucial time for Tesla (and electric cars in general) and I wouldn't want any GM, Ford or Chrysler-sales person trying to sell my cars - next to all the other cars he has on display...
Re:Repeat ad nostrum. (Score:5, Insightful)
And where was the political outrage towards Apple when they opened their own stores, for causing "unfair" competition with the other retailers?
(Obligatory computer analogy in this car thread.)
Re:Repeat ad nostrum. (Score:4, Informative)
And where was the political outrage towards Apple when they opened their own stores, for causing "unfair" competition with the other retailers?
(Obligatory computer analogy in this car thread.)
There were tons of complaints by tons of people; they were unable to buy the laws because the resellers were not franchisees. Here's a short list of pissed off people:
All U.S.: http://www.sfgate.com/business/article/Apple-dealers-biting-back-Mac-sellers-say-2636871.php [sfgate.com]
Australia: http://www.macworld.com/article/1027780/australia.html [macworld.com]
France: http://www.padgadget.com/2011/12/30/apple-reseller-sues-apple-in-france/ [padgadget.com]
Portugal: http://appadvice.com/appnn/2012/07/portuguese-reseller-interlog-fails-sues-apple-for-hefty-sum [appadvice.com]
LA and Boston: http://appleinsider.com/articles/11/02/22/apple_repair_consultants_upset_over_changes_to_apple_retail_referral_policy [appleinsider.com]
The current Apple pissing contest is over the changes to the repair referral channel. They're going to lose to Apple's wishes there, too, since what Apple sells is a holistic customer experience rather than selling only consumer devices.
Re: (Score:2)
The very name "Big 3" implies that they deserve special scrutiny under the Sherman Anti-Trust act.
So they are a p*sspoor example. Conflating Ford with Tucker is pretty dishonest.
Re: (Score:3)
You've missed something. All QE does is funnel cash into PDCFs on Wall Street. It's not increasing the money supply.
They are simply buying notes on a one-to-one basis, which keeps the balance sheet in balance. The only time that cash escapes into the general economy is through a lawsuit settlement. Otherwise it stays locked up in equity issues and offshore partnerships. If it got loose into the economy, you'd have runaway inflation.
The Chinese dump cash directly into the pockets of their own internati