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Tesla Wants Texas Auto Sales Regulations Loosened
An anonymous reader writes Tesla decided not to build its new $5 billion battery factory in Texas, but the company still wants to sell its electric cars directly over the Internet there. The automaker hopes that the possibility of future investment in the state will be enough to overcome the Texas Automobile Dealers Association lobby and change dealership laws. From the article: "Diarmuid O'Connell, Tesla's vice president for business development admits that getting the law changed won't be easy. 'Does the fact that we didn't site the factory there complicate things? Absolutely,' O'Connell said. 'But we're going to be doing a number of big battery factories in the coming years and we're going to need new vehicle factories as well, and there's a certain logic to doing those in Texas.' He didn't elaborate, but added that the state may not be so attractive if current sales regulations stand. 'If we're banned in Texas, why are we investing billions of dollars here?,' O'Connell asked."
The good Texas conservatives are committed to fight unnecessary government regulation and would never... Oh, wait.
Namely paying the workers less.
Less than Nevada? Not likely. Tesla certainly pays it's geeks competitively in Silly Valley, though I hear the hours are long. They make a high-margin product anyhow, and need quality more than 1% cheaper wages.
Texas is a great legal climate for business, which is one reason so many people are moving there. But state and local politics anywhere is hugely influenced by car dealers, as they have larger advertising budgets and more name recognition than state senators. Tesla can't even bribe/contribute their way to victory here, because an owner of a large dealership chain can so easily oust a state rep. OTOH, bringing a ton of new jobs, or even finally offering a car for sale that wasn't a rich boy's toy, could change things - give the Texas voter a reason to actually care.
Socialism: a lie told by totalitarians and believed by fools.
They'll end up paying twice the difference in bribes to state and local politicians and bureaucrats. Functionaries in India go to sleep DREAMING they lived in Texas. Illinois governors dream that when they get out of prison they'll get elected in Texas.
Tesla needs and is aiming to build lots of high capacity batteries, which are exactly what consumers need to store energy from solar / renewable sources and off-peak rate time periods to be used during more expensive on-peak rate times. Energy companies are among the largest consumers of fossil fuels, and have to be totally against any technology that eats into their profits, no matter what they say or do publicly. Their fossil fuel providers must also be in that camp, as they lose big time if their largest customer quickly becomes much less profitable, and sets the stage for personally owned renewable energy sources which they don't have a piece of.
I'm rooting for Telsa to succeed in spite of Texas, Big Oil, the energy companies, etc.
Actually, I don't know why they don't "acquiesce" somewhat to the demands - and offer to sell to the dealers at the same price as they sell in other states.
When the dealers refuse on the basis they won't be competitive with out-of-state sales, they should surely be able to use that to force the hand of the legislature (by advertising in Texas, with the tag line "Not available in Texas because none of your dealers will sell our cars" or something). Truthful. Pins the "blame" where it belongs (the dealers).
If, OTOH the dealers accept, the customers will demand to know why Texas is 25% more expensive (and Tesla can truthfully say "We sell at the same price to all comers, dealer or private, so any difference is the dealer's margin because your state gov't won't let us sell direct to you".
I'm very interested, with Tesla apparently coming to Oz next year, to see what happens here.
Yes, because democracy is setup to be sold... I would be willing to bet that the vast majority of their constituents think these laws are BS.
When you cant win, ad hominem.
I don't think that this is just a matter of him getting his way. Consumers will also be getting their way too.
Esra Erimez
Bingo. While I understand the agenda they have, a push for favorable business conditions just like any other business would pursue, why does Tesla not think they can compete on equal terms as the competition? Sounds like they feel they need help being competitive.
Except when they aren't.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
The Constitution reserves to Congress the power “to regulate Commerce [...] among the several States.” Art. 1 Sec. 8 Para 3. SCOTUS interpretation: * includes the power to preempt state law (express or implied) by the enactment of federal law * denies states power to unjustifiably discriminate against or burden the interstate flow of articles of commerce even if Congress has not enacted a preemptive federal law.
By "republicans" you mean "Democrats" .
... which meant "conservative" for the time period in question.
Texas didn't have a single. Republican governor between 1876 and 1983. These laws were passed in the late 1930s and early 1940s (first in 1937). So that's right in the middle of the Democrats' hundred-year reign in Texas.
So what you're saying is that Texas only voted in a Republican governor after Nixon's Southern Strategy brought all the ultra-conservative pro-segregationists over to the Republican party? What an interesting coincidence.
Maybe because the parties realigned? Why is that so hard for people to freaking understand? All the old Southern Democrats (like the Texas Democrats) BECAME TODAY'S REPUBLICANS! Read some history, look at their positions. It's so easy to understand and comprehend.
....and lucrative contracts to one's brother-in-law are how it is done in Texas government. It is the same as it ever was. Crony capitalism at its finest.
> the current rules favor incumbents. The current rules are against progress.
The whole point of these laws is to prevent the big three established automakers from controlling the market and bullying the little guy. Anyone is allowd can sell cars in these states, except for the big bad car companies, so you don't have any 800 pound gorillas bullying the individual dealers.
Dealers are local, so they've been able to successfully lobby state lawmakers to slant the law even against the far-away car companies and toward local dealers. That's ANY local dealers, including local Tesla dealers.
Tesla wants the same thing Ford and GM wanted, a type of monoply known as a vertical integration monoply. A vertical monoply is when one company controls the entire chain from manufacturing major parts (Tesla's battery mega-factories), building the cars, the distribution network, sales, and service.
Contrast to a horizontal monopoly, where one company controls all car sales. In the horizontal, they control only one layer, but completely control that layer. In the vertical, they participate in, but do not necessarily control, control all layers.
To combat these vertical monopolies, voters decided in the 1930s and 1940s that the company who manufacturers parts (Tesla), builds the cars (Tesla), and controls wholesale distribution (Tesla) can't also control sales and service. Other companies get to compete to provide the best sales and service. That's the purpose of the law.
Personally, I'm not sure that I need to be protected from this type of vertical monopoly given the strength of Toyota and Honda in the US. If the big three from Detroit don't treat me right, I'll just buy a Toyota.
Because the current rules are written specifically to favor the incumbents.
It's what all businesses do - break the lower rungs of the ladder they climbed up.
Why can't a customer decide to buy a car without a dealer? Once it's 2 minutes old, they can purchase the same car from a private individual.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Actually, I don't know why they don't "acquiesce" somewhat to the demands - and offer to sell to the dealers at the same price as they sell in other states.
I don't think there is anything stopping a Texas auto dealer from going to Tesla's web site today and buying as many cars as he wants to buy.
The real issue is that the dealer would then want to service and support these cars, which would require a more in-depth working relationship with Tesla; and Tesla (quite reasonably IMO) does not trust dealers to do as good a job with that as Tesla itself can. Without quality service and support, OTOH, there is no reason why a customer should want to buy through a dealership and pay extra for inferior support.
I don't care if it's 90,000 hectares. That lake was not my doing.
The port of Houston was ranked 2nd nationally in total tonnage in 2012. The port of Oakland was ranked 34th.
Houston is not far from the Atlantic (via the Gulf of Mexico) or the Pacific (via the Panama Canal).
Bullshit. There's absolutely no reason why Tesla couldn't open a training program to begin certifying maintenance techs for their vehicles. If they are somehow able to service the car in such a "superior" way then they certainly have the ability to codify and document those "superior" procedures, then actually make techs who wish to become certified demonstrate an appropriate level of competency with the maintenance procedures. Then dealers wishing to provide "Tesla Certified" maintenance would simply require their techs to acquire that certification.
I don't think you understand the situation. Traditional dealers make a lot of their money selling warranties and overpriced service after the sale. Tesla operates a nationwide network of service centers and charges $600 for annual service. Why should Tesla be any more anxious to give up that service than your local Ford dealer is to recommend you use JiffyLube for oil changes?
Right now, Tesla has a de facto monopoly on the technical expertise required to service their vehicles. You can't take it down to the neighborhood mechanic for work, because they just don't know its systems. You'd have better luck with the local dryer repairman. It's in Tesla's interest to keep as much service in-house as possible, for exactly the same reasons as traditional dealers.
If those procedures don't exist, then the vehicle is not ready for mass market - Tesla WILL NOT be able to keep up with the maintenance work as their sales grow. Can you, for a minute, imagine if every time you needed anything done on your vehicle, you had to ship it to Nevada, and wait a couple weeks? Who's going to buy that shit?
You're not paying attention. Tesla has its own network of service centers, more-or-less equivalent to the traditional network of dealers. Tesla wants to maintain ownership, control, and share profits of those showroom/service centers, where traditional dealerships are legally required to be independent. Tesla is using the facts that their showrooms don't maintain an inventory and that their vehicles don't require exhaust, fuel, coolant, oil, and other extensive support systems to claim these locations are outside the traditional definition of "dealership" and may therefor remain Tesla-owned. They definitely have a scalable architecture for servicing their growing fleet. It's one of the reasons they're resisting the traditional independent dealer model.
I think the story here is "man bites dog". Texas, home of the "fuck the people, give businesses ALL the money, regulation-is-literally-Hitler" attitude is resisting innovation with unnecessary regulation. So much for the free(er) market.
This is why car dealers can treat their (sales) customers like total dogshit and get away with it; the dealer chain owners are able to afford buying legislators outright, and protectionist laws give the dealerships unreasonable leverage in the manufacturer trying to get bad (well, worse than the rest, which is beyond horrible) dealerships to change their practices. Revoking a dealership's franchise is only slightly less hard than getting a Buick through the eye of a needle.
Never underestimate the power of stupid people in large groups.
The difference between Comcast and Tesla is bigger and more profound than you have indicated.
1) Comcast has local monopoly on CABLE, Tesla is not advocating a monopoly on Cars, roads, gas stations ....
2) Comcast Monopoly is sanctioned by the local municipality (typically at least), Tesla is only wanting to open up Factory Stores in the states.
3) Telsa customers will be buying Teslas regardless, while Comcast Customers cannot get Time-Warner or COX cable, even if they wanted it.
Those are three big differences between Comcast Monopoly and Tesla Vertical Control.
Which is why, I am pushing local municipalities to build out the infrastructure (roads) and let the Cable Providers provide service only (not the last mile) Break up the monopoly where it can be broken.
I have no problem with Tesla wanting to control its outlets, as we have other choices available.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.