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Tesla's Next Auto-Dealer Battleground State: Georgia

Posted by timothy on from the level-boss dept.

cartechboy (2660665) writes [Elon] Musk and Tesla's biggest hurdle in the U.S. has been bypassing conventional dealerships and selling directly to customers. This concept is something that's illegal in many states thanks to a nationwide patchwork of decades-old franchise laws. Tesla's latest battle is taking place in Georgia where dealers allege that the start-up company is in violation of the state's franchise laws. Not surprisingly, Tesla's fighting back. To sell cars in Georgia, Tesla had to agree to sell fewer than 150 vehicles directly to consumers in the state. Last week the Georgia Automobile Dealers Association complained that Tesla sold 173 vehicles. Tesla hasn't publicly commented on how many vehicles it has sold in Georgia. We've seen time and time again how this story ends, and the writing is clearly on the wall for this case. Another bit of writing on the wall, though, as reported by the L.A. Times, is that recent electric car sales in the U.S. have been stagnant.

14 of 157 comments (clear)

  1. ...really? by Anonymous Coward · · Score: 2, Insightful

    cars people aren't allowed to buy aren't getting bought? whoda thunk it?

  2. Franchise laws = Racket laws by Anonymous Coward · · Score: 5, Insightful

    There is no way in hell those franchise laws were put in place for the benefit of you and me. They were put in place merely to protect a lucrative profit stream for special interests.

    1. Re:Franchise laws = Racket laws by thaylin · · Score: 2, Insightful

      Originally they were not bad laws, back when there was only 1 or 2 car manufacturers who did not really have to compete, and when there were not many mechanic shops. Now the laws are really just a way to pay middlemen who pay lawmakers.

      --
      When you cant win, ad hominem.
    2. Re:Franchise laws = Racket laws by Quince+alPillan · · Score: 3, Insightful

      If you only read the laws themselves, you wouldn't think that. In theory, the laws are there to give you better service through a dealership because the evil large corporation gives you poor service at a steep price. They're there to prevent a monopoly on service so that you're not required to go to a Ford Garage so that a Ford Mechanic can fix your car with Ford Parts and price gouge the hell out of you.

      In practice, they still do it and with the kickbacks and other ties to the parent company, they might as well be the same thing. The dealer ends up being the middle man that takes his cut and raises the price by thousands of dollars. The laws have effectively enshrined the dealership business model and Tesla threatens that.

    3. Re:Franchise laws = Racket laws by alexander_686 · · Score: 4, Insightful

      It is a bit more subtle than that. Back in the 20s there were over a dozen auto manufactures and many repair shops, so that was not an issue. The issue was one of unbalanced power. The manufactures could bully the franchisors by forcing them to buy more cars than they could sell, yank their franchise after they had built up the brand and sell it somebody else, drive up franchise fees after the initial 10 year contract was over.etc.

      A free market only works when there is a free exchange between 2 parties. The laws were supposed to, and did, redress this balance of power. Of course, what was true 100 years – or even 25 years does not necessarily apply today or to Tesla. The NADA today is about defending locally entrenched business interests and the status quo.

  3. You're having me on... by Anonymous Coward · · Score: 2, Insightful

    "electric car sales in the U.S. have been stagnant."
     
    "Tesla had to agree to sell fewer than 150 vehicles"
     
    I don't think that is a coincidence.
     
    Captcha: congest

  4. Ah, how heartwarming... by fuzzyfuzzyfungus · · Score: 4, Insightful

    Do 'States' Rights' have any applications that aren't kind of embarrassing?

    1. Re:Ah, how heartwarming... by internerdj · · Score: 2, Insightful

      Yep. It is an availability bias. We only hear about states rights when in completely screws something up. You can't seriously say that a uniform code of law works best across the country, can you? What is best for California is best for New York? Or what is best for Arkansaw is best for New Jersey? Or what is best for Hawaii is best for Montana? Different attitudes, different resources, different population densitities. We are strong because we are different but united, granted when we screw it up the we screw it up monumentally.

    2. Re:Ah, how heartwarming... by GodInHell · · Score: 3, Insightful

      Pot legalization.

  5. RE: Electric Car sales. by Anonymous Coward · · Score: 2, Insightful

    My local dealers in Georgia do not carry electric cars. To get an electric car you have to order it through them (if their manufacturer actually makes one) or buy online. In other words, car dealers are hurting electric car sales.

    I hope Tesla is successful. Car dealerships are an anachronism and offer no value to the consumer. They are just needless friction in the car market and just adds expense and bullshit for us consumers.

  6. Let's keep big government out of business by gurps_npc · · Score: 3, Insightful
    By making sure that small government totally blocks business!

    That's how it's supposed to work, right?

    --
    excitingthingstodo.blogspot.com
  7. And how much of that stagnancy is because of.... by Anonymous Coward · · Score: 2, Insightful

    And how much of that stagnancy is because of a lack of options to choose from? I mean, really when you look at it there are VERY few models available as full EV - Tesla, and then a couple little entry levels that have been given EV versions... There's almost nothing available in between, and absolutely nothing in the small/mid SUV or mid-sized sedan or sport coupe markets to choose from.

    Until there are more models to choose from that span all the market segments, there's always going to be a limited subset of buyers who will be willing to purchase these as their primary car...

  8. Comment from Tesla by JamieKitson · · Score: 5, Insightful

    Tesla *has* publicly commented on how many vehicles it has sold in Georgia, it says that the 150 maximum is for a calendar year, while the 173 figure is for October to June and it hasn't hit the 150 mark for 2014.

    http://www.autonews.com/articl...

  9. Re: Stagnant electric car sales by Anonymous Coward · · Score: 2, Insightful

    The leaf is a reasonable attempt I the no, pricey for what it is, but seems an honest attempt.

    The problem is they're two different market segments. The Leaf is an honest attempt to build an electric car. It gets you from A to B, looks kinda cute, and RUNS ON ELECTRICITY NOT GAS! You're saving the environment! (But you could do that in a Prius, Fit, or any other subcompact.) The Model S and the Roadster are electric cars. They accelerate faster than a Lamborghini Countach, look totally badass, and, oh, by the way, they just happen to run on electricity, not gasoline. You're feeling awesome whenever you come up to a metered highway entrance because you get to go from zero to sixty in five seconds! (And there are still relatively few cars in which you can do that and save the environment.)