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Tesla Faces Tough Regulatory Hurdle From State Dealership Laws
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.
The manufacturers of other cars have to sell through dealers because of these laws, and they don't want Tesla to have an advantage, and the existing dealers want a chance to become dealers for Tesla so they can get a share of that action.
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"?
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.
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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"