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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
Car dealerships are an anachronism. They offer no real added value. If it weren't for state laws protecting them, they would have been gone years ago - especially with the creation of the Internet.
The sales people are a nuisance, the parts section is to be avoided at all cost - and it really pisses me off when there are parts that are dealer only on rare occasions.
Warranty work? That could be streamlined too by having a tech of your choice do it.
I was hoping the Elon would take his billions and his cult of personality and crush the industry, but I guess that was a dream. I have the same dream for the elimination of Real Estate agents- another pointless middleman that just adds unnecessary costs to the consumer.
If you want to register a vehicle that you've purchased out of state in NJ, you have to pay sales tax on it, unless it was previously registered at your former address in the state where it was purchased. So basically, if you live in NJ and want a Tesla, you have to pay sales tax (and possibly registration fees) in the state you purchase it, and then pay sales tax AGAIN in order to register it in NJ.
“We need to talk about the fact that we are for a free-market society that allows your effort and ingenuity to determine your success, not the cold, hard hand of the government.” -Chris Christie
This is my signature.
In New Jersey, you still aren't even allowed to pump your own gas, due to a successful lobby by gas station owners ... in 1949. it's all "full service". never underestimate the power of crappy special interest lobbies in New Jersey.
i could live a little longer in this prison
If you want to register a vehicle that you've purchased out of state in NJ, you have to pay sales tax on it, unless it was previously registered at your former address in the state where it was purchased. So basically, if you live in NJ and want a Tesla, you have to pay sales tax (and possibly registration fees) in the state you purchase it, and then pay sales tax AGAIN in order to register it in NJ.
That's true in most states. I got lucky in that I'd bought my car ~7 months before moving from New York City to Chicago...had I bought it 2 months later, I would have been stuck with sales tax in both states.
That said, as egregious as this is, it is nothing compared to the bullshit New York City and New York State inflict upon their residents. When I moved out of the state, I had to pay a punitive tax for having the audacity of leaving New York state. I kid you not. At around $3k, it's enough to hurt, but just under the amount that would make a lawsuit overturning this doubtlessly unconsitituional tax financially worthwile. That said, after this experience I will never willingly live in New York state again.
The Future of Human Evolution: Autonomy
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.
And yet the gas is cheaper than in next-door PA, where you have to get out in the cold. If you end up in NJ frequently, you even time your gas purchases for when you are on the Jersey side.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
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
It's not "every Tesla", it's "every EV". The feds are not picking a company here. They are kick-starting a new technology, regardless who makes it.
The traditional car companies get exactly the same subsidy.
http://www.fueleconomy.gov/feg...
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 is illegal for a car company to open its own dealerships. That is the point of the law, they are required to have a middleman.
Tesla could make a deal with John Smith to sell him cars wholesale, and have John Smith re-sell them to the public at a huge markup with hidden fees and sketchy high pressure sales tactics... That's what normal car companies do. Lots of people hate that system. I intend to buy a Tesla for my next car, because I've hated ever interaction I've ever had with a normal dealership -- even though Teslas are out of what I consider my normal price range for a car, even though the range limit is kind of a bummer, even though I don't really want an electric car, I'll accept those downsides just to avoid dealing with the scumbags that run car dealers around here. Apparently Elon Musk agrees that there's some kind of market value in selling to people liike me, which is why he is trying direct-to-customer sales.
Actually, just like any out of state purchase, just tell the dealer you are going to register in another state, and they will give you a temporary tag instead of making you get one in the state you purchase. Then, you get 30 days to register in your state (and pay the sales taxes and registration fees). This usually helps negotiate a lower price on the car itself (in my experience anyway), because there is much less paperwork for the dealership to bother with.
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...
NY isn't the only state with a so-called exit tax.
One way that states apply an virtual exit tax is change the tax exemption status instead of pro-rating it. For example with property tax, such that if you leave the state, you end up paying a higher rate (e.g., lose the primary residence exemption on your property tax bill) vs if you moved within the same state you could pro-rate your exemption between 2 properties.
Another way is to have a separate rate for a transfer tax for non-residents (meaning it applies if you die or move). California was proposing this.
Another way is to blatantly add a surcharge (I think Yonkers has something like this)
Even if there isn't any actual tax liability, if you move out of the state, they will often chase you around claiming part of your income was derived from the state and you owe taxes on that amount. Say if you file your tax return from 2010-2012 in NY, then in 2013 you move say to Nevada and file a 2013 part year tax return for NY thinking you are in the clear for NY. Later in 2014 you only file federal taxes in Nevada, sometime in 2015 NY discovers that you never filed a NY state tax return for 2014, but the Feds got a 2014 return for you. They immediately send you a notice in the mail, that they have noted on your 2014 Federal Return that you had $X amount of adjusted gross income, and since you didn't file a NY tax return they "estimate" that $Y was earned in NY and as a out-of-state residence you should pay taxes on this amount (one theory they use is non-deductibility of state income tax for non-residents) . You can either fight this shake-down and show that none of the income was earned in NY, or just pay $Y.
How is it a free market when the law doesn't allow it to be? A free market would be Tesla being allowed to sell how they choose instead of being forced to go through third parties. A free market would be being allowed to pump your own gas instead of being forced to pay some tard to do it and then expecting a tip for something you may have preferred to do yourself instead of just sitting in your car doing nothing at all.
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