Slashdot Mirror
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.
Except when they aren't.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
> 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.
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.