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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.

7 of 157 comments (clear)

  1. 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 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.

    2. 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.

  2. 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 GodInHell · · Score: 3, Insightful

      Pot legalization.

  3. 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
  4. 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...