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Government Transportation

Tesla Wants Texas Auto Sales Regulations Loosened 137

An anonymous reader writes Tesla decided not to build its new $5 billion battery factory in Texas, but the company still wants to sell its electric cars directly over the Internet there. The automaker hopes that the possibility of future investment in the state will be enough to overcome the Texas Automobile Dealers Association lobby and change dealership laws. From the article: "Diarmuid O'Connell, Tesla's vice president for business development admits that getting the law changed won't be easy. 'Does the fact that we didn't site the factory there complicate things? Absolutely,' O'Connell said. 'But we're going to be doing a number of big battery factories in the coming years and we're going to need new vehicle factories as well, and there's a certain logic to doing those in Texas.' He didn't elaborate, but added that the state may not be so attractive if current sales regulations stand. 'If we're banned in Texas, why are we investing billions of dollars here?,' O'Connell asked."
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Tesla Wants Texas Auto Sales Regulations Loosened

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  • by edibobb ( 113989 ) on Sunday December 07, 2014 @07:08PM (#48544699) Homepage
    The good Texas conservatives are committed to fight unnecessary government regulation and would never... Oh, wait.
    • I know right...what happened to not picking winners....so it's a case of "Do as I say, not as I do."
    • It has nothing to do with conservatives. It has everything to do with preserving the good old boy network. Texas represents a huge sales opportunity for Tesla and much like other states, the laws here mimic the old Dealership mentality. Fishing a battery plant in Texas isn't exactly going to make or break Texas, nor will it probably entice legislative change. It's certainly good for Nevada because high paying jobs, especially in Northern Nevada, are few and far between.

  • or LOST. After all, we have to adhere to /. grammar here, right?

  • Probably (Score:2, Interesting)

    by phantomfive ( 622387 )
    If there's one thing Elon Musk is very good at, it's getting governments to do things for him.
    So he'll probably get his way here eventually.
    • I don't think that this is just a matter of him getting his way. Consumers will also be getting their way too.
      • by dublin ( 31215 )

        Really, if Tesla gets their way, then GM (or Toyota, VW, etc) can force you to get your GM car serviced only through "authorized" GM service centers, under pain of voiding your warranty. Especially in today's world of telematics, they will control your car more than you do. Is that what consumers want? I damn sure don't...

        Tesla's model is hideously proprietary and abusive of its customers. The silly thing is that Tesla's customers are such fanboys that they cheer Tesla on in their subjugation of their r

    • Bingo. While I understand the agenda they have, a push for favorable business conditions just like any other business would pursue, why does Tesla not think they can compete on equal terms as the competition? Sounds like they feel they need help being competitive.
      • why does Tesla not think they can compete on equal terms as the competition? Sounds like they feel they need help being competitive.

        Perhaps for the same reasons that allowed society to exit the feudal era? The current rules favor incumbents. The current rules are against progress.

        • by raymorris ( 2726007 ) on Sunday December 07, 2014 @11:06PM (#48545341) Journal

          > the current rules favor incumbents. The current rules are against progress.

          The whole point of these laws is to prevent the big three established automakers from controlling the market and bullying the little guy. Anyone is allowd can sell cars in these states, except for the big bad car companies, so you don't have any 800 pound gorillas bullying the individual dealers.

          Dealers are local, so they've been able to successfully lobby state lawmakers to slant the law even against the far-away car companies and toward local dealers. That's ANY local dealers, including local Tesla dealers.

          Tesla wants the same thing Ford and GM wanted, a type of monoply known as a vertical integration monoply. A vertical monoply is when one company controls the entire chain from manufacturing major parts (Tesla's battery mega-factories), building the cars, the distribution network, sales, and service.
          Contrast to a horizontal monopoly, where one company controls all car sales. In the horizontal, they control only one layer, but completely control that layer. In the vertical, they participate in, but do not necessarily control, control all layers.

              To combat these vertical monopolies, voters decided in the 1930s and 1940s that the company who manufacturers parts (Tesla), builds the cars (Tesla), and controls wholesale distribution (Tesla) can't also control sales and service. Other companies get to compete to provide the best sales and service. That's the purpose of the law.

          Personally, I'm not sure that I need to be protected from this type of vertical monopoly given the strength of Toyota and Honda in the US. If the big three from Detroit don't treat me right, I'll just buy a Toyota.

          • Personally, I'm not sure that I need to be protected from this type of vertical monopoly given the strength of Toyota and Honda in the US. If the big three from Detroit don't treat me right, I'll just buy a Toyota.

            Exactly. It's not that such rules were never required, but they are not required now. The current effect is not to protect consumers, but instead, to protect incumbent dealerships. Look at all the states that don't have such rules. The auto market hasn't imploded in those states.

          • One major purpose of car dealerships is to confuse buyers concerning the cost of driving a mile. For example offering a $4,000 cut in price for any trade in that can be dragged in on a garden hose gives the buyer and illusion that the cost per mile of operation is reasonable. If one takes the cost of the vehicle, the interest on the loan, the compulory mainetence fees, the optional maintenance fees, the insurance, repairs, and gasoline over the life of tye car then one can get the cos
            • >For example you buy a $30,000 car

              Well not me. I've never spent that much on a car, even though I could if I chose to.
              I don't need to have that much invested in a car. I have better things to spend that money on.

      • Because the current rules are written specifically to favor the incumbents.

        It's what all businesses do - break the lower rungs of the ladder they climbed up.

        Why can't a customer decide to buy a car without a dealer? Once it's 2 minutes old, they can purchase the same car from a private individual.

      • Bingo. While I understand the agenda they have, a push for favorable business conditions just like any other business would pursue, why does Tesla not think they can compete on equal terms as the competition? Sounds like they feel they need help being competitive.

        Sure, and if they wanted to they could sell gasoline-powered cars, too.

        Tesla is taking a shot at modernizing the car industry, and not just with their choice of powerplant. The dealer system made sense when you needed local expertise, but information is much easier to distribute today. Dealers are an anachronism -- and they know it, which is why they're fighting so hard to retain the regulatory restrictions on direct sales.

        There are lots of practical reasons why Tesla doesn't want to go the franchise ro

      • By selling their cards through a middle man? Yeah real competitive.
  • by Anonymous Coward on Sunday December 07, 2014 @07:38PM (#48544811)

    Tesla needs and is aiming to build lots of high capacity batteries, which are exactly what consumers need to store energy from solar / renewable sources and off-peak rate time periods to be used during more expensive on-peak rate times. Energy companies are among the largest consumers of fossil fuels, and have to be totally against any technology that eats into their profits, no matter what they say or do publicly. Their fossil fuel providers must also be in that camp, as they lose big time if their largest customer quickly becomes much less profitable, and sets the stage for personally owned renewable energy sources which they don't have a piece of.

    I'm rooting for Telsa to succeed in spite of Texas, Big Oil, the energy companies, etc.

    • What a dumbshit. What state in the US has the largest wind farm generating capacity? California? No. It's Texas. Get your facts straight.
      http://www.awea.org/Resources/... [awea.org]

    • If home owners could take advantage of using batteries to balance out the peaks in electricity usage, the electricity companies would probably be doing it already. Maybe not in the US, but some power company in some country would be doing it if it was economical. The reason it's not being done is because it's not economical yet. Perhaps someday it would be, and I hope it is soon. As soon as we get battery technology that makes it economical to do so to offset the peak usage rates, renewable forms of elect
  • General Motors reports Tesla is still dead...

    Wicked Early News, do you still exist and want this story?

  • Go Texas! (Score:5, Insightful)

    by Ol Olsoc ( 1175323 ) on Sunday December 07, 2014 @08:20PM (#48544945)
    Texas, the right thinking conservative bastion of the world, is all about the free market. A cornerstone of small government capitalistic core values.

    Except when they aren't.

    • Re:Go Texas! (Score:4, Insightful)

      by Impy the Impiuos Imp ( 442658 ) on Sunday December 07, 2014 @10:31PM (#48545273) Journal

      We lecture other nations about free trade, but fucking Canada is freer than the US for some farm goods and other stuff.

      And don't even get Australia started. For that matter, our sugar is 2-3x world price inside the US because, umm, you know, we love free trade. It's been pointed out Congress is holding 310 million Americans hostage to about 7000 farmers.

  • I recall way back in the mists of time car manufacturers in the UK sellimg kits of parts to avoid the high sales tax on cars.

    I'm sure Elon could come up with a similar work around. Wheels sold separately.

    • I'm sure Elon could come up with a similar work around. Wheels sold separately.

      The problem is then licensing it for use on a public roadway. Some states have a mechanism by which it might be possible, but only if you actually put it together.

      • If it is sold as a kit car then it can be titled and sold in every state in the US. The issue here is that the rules vary dramatically from one state to another with some just requiring a simple bill of sale while others require all sorts of legal hoops. Minnesota is fairly simple having seen my father go through it with one of his vehicles that lacked a VIN (the VIN plate had long since fallen off or rusted away) so was treated as a home built (kit) car. They require bringing it into one of the bigger full
  • The Constitution reserves to Congress the power “to regulate Commerce [...] among the several States.” Art. 1 Sec. 8 Para 3. SCOTUS interpretation: * includes the power to preempt state law (express or implied) by the enactment of federal law * denies states power to unjustifiably discriminate against or burden the interstate flow of articles of commerce even if Congress has not enacted a preemptive federal law.
  • by Jahoda ( 2715225 ) on Sunday December 07, 2014 @10:20PM (#48545251)
    ....and lucrative contracts to one's brother-in-law are how it is done in Texas government. It is the same as it ever was. Crony capitalism at its finest.
  • by onix ( 990980 )

    Great opportunity for Oklahoma.

  • I had a friend years ago whose family owned a dealership in Texas. More cutthroat politics are hard to imagine: among the dealerships, the car manufacturers and the government (local and state), some of it pretty clearly out-and-out corruption. Just as an example, they built a new showroom, but the building kept failing some inspection or other. The inspector would write up faults, they would fix them, he would write up new faults...eventually he lost patience and let it be known that the real problem was t

    • by dublin ( 31215 )

      The inspector would write up faults, they would fix them, he would write up new faults...eventually he lost patience and let it be known that the real problem was that he hadn't yet found a blank envelope filled with cash.

      This is Texas after all - a call to the Texas Rangers might well have ended that kind of corruption for good - most inspectors are state-licensed, and it's hard to make a living if you've lost your license. I'm not saying we're corruption-free here, but in my experience, the level of comm

  • While I'm sure Tesla would face the same kind of stupid auto dealer protectionism in any state where they do business, I wish they'd come to Indiana, which has a great deal of experience building RV's.If they took hold of a midwestern state, it would have a greater positive impact on the region than down in Texas.

  • State blocks the sales of a companies product. Company employs a newsworthy amount of common sense and does not put 5 billion dollars into the state by building a mega factory for a product that is blocked in the state it would be constructed in. It also fails to contribute the jobs that would be needed to build and staff the mega factory to the overall employment of that state.

    I for one am thrilled. I think bad things should always happen to vindictively stupid people and then be thoroughly reported in the

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