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New Jersey Auto Dealers Don't Want to Face Tesla
cartechboy writes "It feels like this story is becoming repetitive: X state is trying to ban Tesla stores, or the ability for an automaker to sell directly to a consumer. Either way, it's all aimed at Tesla. Now it's New Jersey's turn as a hearing today could end up banning Tesla stores in the state. Naturally Tesla's displeased with this and is crying foul. A rule change that is expected to be approved today would require all new-car dealers to provide a franchise agreement in order to receive a license from the state. Obviously Tesla (the manufacturer) can't provide a franchise agreement to itself (the distributor). The proposed rule would also require dealers to maintain a 1,000 square foot facility, the ability to show two cars, and service customer cars on site. Tesla doesn't meet that last requirement at any of its galleries, and most of the Tesla stores are located in shopping malls which mean they are smaller than 1,000 square feet. Tesla's arguing the New Jersey Motor Vehicle Commission is overstepping its bounds. Will Tesla be able to defeat this new rule in New Jersey as it has overcome issues in many other states?" (Also covered by the Wall Street Journal.)
The right wing should be opposed on free-market principles. The left wing should be opposed on environmental grounds. So which politicians should be in favour of this regulation again?
Since we are constantly regaled how awful the Tesla is. - They all burn up, they are stupid, They are too expensive, I can't drive the Trans American Highway in one, electric cars suck - why don't we just let the free market do what it always does, eliminates bad products.
I'm pretty sure at other times, car dealership owners are all about the free market, competition, and the heartbeat of America.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Oh look another moron that doesn't understand what in there state commerce clause means.
Oh look another moron that doesn't understand the difference between their and there.
Many members of Congress own car dealerships or are closely associated with those who do.
Being protected monopolies, they are very profitable.
Surely you've noticed that all the products of technology get cheaper every year except cars?
Since when does the quality of customer service become the purview of law? There are no dishonest dealings going on. Customers enter into these purchases fully aware of the requirements of ownership. No one expects Walmart to provide a service center for the electronics they sell, nor a seamstress for their clothing.
This is protectionism and corrupt politics as can only be done at the local level pure and simple.
Two of my imaginary friends reproduced once
Laws in Texas for example:
http://www.statutes.legis.state.tx.us/Docs/OC/htm/OC.2301.htm#2301.4671
(c) Except as provided by this section, a manufacturer or distributor may not directly or indirectly:
(1) own an interest in a franchised or nonfranchised dealer or dealership;
(2) operate or control a franchised or nonfranchised dealer or dealership; or
(3) act in the capacity of a franchised or nonfranchised dealer.
You overstate it. It was originally meant to prevent states from taxing commerce moving through their state. Of course the courts have rewritten it out of whole cloth to mean that the feds can regulate anything they want, but in this case there is no way they will intervene. Car dealers are powerful in most states and it's perfectly rational (but bad) that they manipulate the govt into propping up their businesses. Maybe Tesla has deep enough pockets to fight it in the legislatures, but i doubt it.
The right wing should be opposed on free-market principles. The left wing should be opposed on environmental grounds. So which politicians should be in favour of this regulation again?
The pragmatists & cynics who need local, wealthy donors to bankroll their campaigns.
From the movie:
There is no America. There is no democracy. There is only IBM, and ITT, and AT&T. And Dupont, Dow, Union Carbide, and Exxon. Those are the nations of the world today [in 1976]. What do you think the Russians talk about in their councils of state? Karl Marx? They get out their linear programming charts, statistical decision theories, minimax solutions, and compute the price-cost probabilities of their transactions and investments just like we do. We no longer live in a world of nations and ideologies Mr. Beale. The world is a college of corporations inextricably determined by the immutable by-laws of business. The world is a business Mr. Beale. It has been since man climbed out of the slime.
https://www.youtube.com/watch?v=zI5hrcwU7Dk&t=2m15s
This is a complete mischaracterization of what's going on. It's not that they don't want to compete with Tesla, it's that they want a cut. Right now, it's illegal for automakers to own car dealerships in most states, because when cars were in early adoption the state government didn't want to allow a situation where a car manufacturer pulled out of a state completely because it was unprofitable, leaving the citizens of that state unable to buy cars easily. So dealerships are independent from the manufacturers. Tesla is bypassing this 100 year old, out of date system, because it no longer makes sense, but the dealers aren't afraid of electric cars, they just want to make Tesla "play by the rules" and let the dealers sell (or not) the Tesla cars, so that they an make a profit off them like they do every other car manufacturer.
If you follow the logic a bit further, what the dealers are truly afraid of is that if Tesla gets an exception, the other manufacturers will also want the same exception. Once Manufacturer's own showrooms and sell online they will be able to undercut dealerships, putting them out of business. Either they stand up for the current rules that created their business market or it dies.