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Elon Musk Addresses New Jersey's Tesla Store Ban
An anonymous reader writes "On Tuesday, we discussed news that New Jersey is trying to ban Tesla stores, which would force the company to sell through car dealerships instead. Now, Elon Musk has prepared a response: 'The reason that we did not choose to do this is that the auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none. Moreover, it is much harder to sell a new technology car from a new company when people are so used to the old. Inevitably, they revert to selling what's easy and it is game over for the new company. The evidence is clear: when has an American startup auto company ever succeeded by selling through auto dealers? The last successful American car company was Chrysler, which was founded almost a century ago, and even they went bankrupt a few years ago, along with General Motors. Since the founding of Chrysler, there have been dozens of failures, Tucker and DeLorean being simply the most well-known. In recent years, electric car startups, such as Fisker, Coda, and many others, attempted to use auto dealers and all failed.'"
They'll make you an offer you can't refuse.
Chris Christy isn't the only one with machinations.
A feeling of having made the same mistake before: Deja Foobar
Imagine if you wanted an Apple computer you had to buy it through Best Buy or Radio Shack, and dealing with their personnel. The companies that do business this way are maddening. Elsewhere, companies like Cisco choose not to sell directly to buyers, making them go through a partner or reseller. This may have been an acceptable model years ago, but these days it's tedious and I think people expect more; they don't want to deal with a third party whose interests are not wholly aligned with their own. At least when you're talking about tech vendors, you can opt to deal with someone else who does business differently. Government enforcement of a given model is quite wrong-headed and needs to be stopped. It smacks of protectionism to me.
Saturn was never a "startup". It was always a subsidiary/brand of GM.
There's already a White House Petition for this. If this reaches it's target this will be the second time a pro Tesla petition has reached 100k plus signatures - https://petitions.whitehouse.gov/petition/inform-new-jersey-markets-should-be-free-tesla-motors-and-everyone/ptHTHYMP
According to the New Jersey MVC (PDF), if you purchased a vehicle in another state and paid sales tax on the vehicle, you provide MVC with the receipt. If you paid 7% or more sales tax in the other state, you pay no sales tax to New Jersey. If you paid less than 7%, you pay the difference to New Jersey. In practical terms, if the purchaser buys in the states neighboring New Jersey, there is no additional cost — New York State sales tax is 4%, Pennsylvania sales tax is 6%.
For example: Alice, who lives in Atlantic City, buys a Tesla in middle-of-nowhere Pennsylvania (6% rate) for $60,000. Alice pays Pennsylvania sales tax on that vehicle in the amount of $3600. If she had purchased the vehicle in New Jersey, she would have to pay $4200 in sales tax. So when registers her vehicle with the MVC, she'll owe the difference ($600), plus title fee ($60) and registration fee ($59 assuming it weighs under 3,500 pounds, see here), and possibly, if Christie is really an a-hole, a 0.4% Luxury Surcharge ($240). Keep in mind, if she purchased the vehicle in New Jersey, she'd pay the same sales tax, but all of it would go to New Jersey. If she purchased the vehicle in New York (4% sales tax), she would pay $2400 in tax to New York and $1800 in tax to New Jersey.
But, I could be missing something. If so, please let me know.
Finding God in a Dog
It's not so cut and dry. The difference in price of gasoline in these two states matches up almost perfectly with the difference in state tax rate. Take out the taxes and gas costs the same (which would still suggest that NJ customers don't really pay any extra for full service). NJ charges about 14 cents per gallon while PA charges 40. The current difference in sale price is 28 cents.
Tax rates: http://www.iftach.org/taxmatrix3/choose_tableq2.php
Average prices: http://www.gasbuddy.com/GB_Price_List.aspx
LOL!
Let's see... Well, the obvious counterpoint to your argument is that PayPal *did* succeed. I happen to hate what it's become (all the abuses of banks, plus a few others, but even less regulation), but back when Musk was starting it up the idea was pretty revolutionary. Even further back, though, there's his startup Zip2, which was sold for over $340 million back in 99.
Since then, his *three* companies (people always forget SolarCity...) all seem to be doing fine. SpaceX has huge contracts, Tesla can't manufacture fast enough to keep up with demand, and SolarCity is one of the top installers of photovoltaic panels in the USA. Sure, they *could* fail, but so could IBM or Google or Coca-Cola. None of them are *likely* to, though. In fact, in the last decade Tesla is just about the only US-based car company that hasn't gone bankrupt...
As for whether the NJ law is aimed at Tesla, you'd have to be a worse nutjob than you claim Musk is to not see it. Let's see, a proposed bill that prohibits a car sales model which happens to be used by exactly one company in the world, right as that company is getting hugely successful? Yeah, there's no evidence at all that this is aimed squarely at Tesla... </SARCASM>
There's no place I could be, since I've found Serenity...