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New Jersey Removes Legal Impediment To Direct Tesla Sales
As reported by The Verge, the rule-makers of New Jersey have relented, and will now allow a slightly freer market for cars.
Almost exactly one year after it was banned from selling its cars directly in New Jersey, Tesla will be back in business in the Garden State. Governor Chris Christie signed into law a bill this afternoon that reversed last year's ban. The new legislation comes with some limits. Tesla can only open a total of four direct sale dealerships and has to operate at least one service center. But it's a major win following a heated war of words that saw Tesla CEO Elon Musk compare local dealers to a mafia protection racket subverting the democratic process.
Because if they opened more than four, that would be just... what?
...Elon Musk compare local dealers to a mafia protection racket subverting the democratic process.
Was anyone really surprised?
screw over family owned businesses to support large corporations. The protection of dealerships was originally created for good reasons. Large corporations were screwing over small dealers. Now the Republicans have trashed all of those protections.
Pathetic troll.
Currently, the Democrats are the majority party in both Houses. In the Senate there are 24 Democrats and 16 Republicans. There are 48 Democrats and 32 Republicans serving in the General Assembly.
The sad thing is that there are tards that will actually believe you since you're bashing someone they disbelieve.
The more cars on the road, the more gas income they get! Oh wait...
The protection of dealerships was originally created for good reasons.
Don't see many supporters of this perspective on /. I am ignorant of the reasons you speak of. Can you go into more detail on them or provide a link?
Great point. The laws that prevented direct sales was done to protect the local dealers. Of course since Republicans believe that corporations are people, they hate small businesses since they consider them subhuman. That is the way of their kind. Christie has really screwed over small businesses in NJ with this crap. This shows he doesn't give a damn about the people.
Huh?
Except now the problem isn't the small dealerships. It's the huge dealership conglomerates that are worth billions. The laws were created in order to prevent the likes of GM from competing directly with third-party dealerships. In the case of Tesla, there are no third-party dealerships with which to compete.
Also, with the Tesla model dealerships don't really work. Every car Tesla sells is made to order. There is no inventory sitting around at dealerships. The customer orders exactly what they want and it's made to order. This is very different than a traditional dealership where the dealer buys an inventory of cars then turns around to sell it to the customer.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
From:
http://en.wikipedia.org/wiki/Car_dealerships_in_North_America
"state laws in the United States prohibit manufacturers from selling directly, and customers must buy through a dealer."
They laws were enacted to keep large, powerful corporations from putting all of the small businesses out of business that sold cars. GM tried to destroy every single car dealer in this country at one point, and several states stepped-up to protect those small businesses from attack. Now the Republicans have removed those protections. The Republicans that rule NJ have really screwed the people with this one.
Seems to be mostly about the incumbent businesses exercising the levers of government power to stifle competition and trample the consumer. Go capitalism!!
From:
http://en.wikipedia.org/wiki/Car_dealerships_in_North_America
"state laws in the United States prohibit manufacturers from selling directly, and customers must buy through a dealer."
They laws were enacted to keep large, powerful corporations from putting all of the small businesses out of business that sold cars. GM tried to destroy every single car dealer in this country at one point, and several states stepped-up to protect those small businesses from attack. Now the Republicans have removed those protections. The Republicans that rule NJ have really screwed the people with this one.
Calling you a tard was an insult to tards..
Currently, the Democrats are the majority party in both Houses. In the Senate there are 24 Democrats and 16 Republicans. There are 48 Democrats and 32 Republicans serving in the General Assembly.
Hell, calling you dumb as a post would be an insult to every acorn with dreams of growing up into a tree, getting cut down, and then hewed into a post.
Also, with the Tesla model dealerships don't really work. Every car Tesla sells is made to order. There is no inventory sitting around at dealerships. The customer orders exactly what they want and it's made to order. This is very different than a traditional dealership where the dealer buys an inventory of cars then turns around to sell it to the customer.
Yeah it seems the only reason you'd want to go to the dealership would be to look at the car and maybe get a test drive. Tesla should crowdsource this to their user base. Maybe they could receive a spiff off of their yearly maintenance fee for demoing the car for prospects. What Tesla driver isn't going to want to show off their car? Everything else from optioning to ordering could be handled online.
I was getting worried.
His sentiment seems to be an attack on the Republican Governor, not the Democratic Party - whose members voted to allow Tesla to operate after the Governor decided to enforce a law that impeded Teslas operations in 2014. But who know whats in his mind...hes a slashdotter.
Hmm, most car dealers are republicans, most states banning Tesla direct sales are under republican control...well, no matter. Why should a particular line of local business get protected from big chains and large corporations? I don't recall anyone yelling when the big chains and then online outfits started selling computers and undercut my business. I'm betting there are a lot of family business that went under when WalMart moved to their town. Again, why should car dealers be protected?
What Tesla driver isn't going to want to show off their car?
Yes, what Tesla driver doesn't want a bunch of strangers driving their car and possibly robbing/assaulting/killing them?
A) Democrats have near-supermajorities in both the Senate and General Assembly of New Jersey (60% in both). Chris Christie may be a Republican, but he can still only sign the laws that are put in front of him. Regardless, that really doesn't matter, since the same politicians who established this law last year are undoing their own work now. Partisanship shouldn't be entering this discussion.
B) I'd love a link to the history of car franchising in America. I have yet to see one and would love to know what the history was or why those protections were established in the first place. Because, based on what I understand so far, they seem to be ancient, anti-competitive laws established by states in response to a perceived crisis that ended decades ago and which are now being used by the formerly-underdog players to abuse their now-dominant positions.
But maybe I have it wrong. Either way, I'd love any links you might have on the subject.
Can other car manufacturers now also open direct sale dealerships? If not, why?
You're not thinking this through. Obviously his dealership-owning father told him that if this bill gets signed he's going to have to move out of the basement.
The protection of dealerships was originally created for good reasons.
Nope. All this "protection of small businesses" does not need a special law for "car dealers/makers". Plain old antitrust law should suffice. So what if a car maker decide to compete with a car dealer? The dealer should simply have a no-competition clause in their contract with the maker. As is commonly done in other countries.
Other businesses doesn't have such "protection laws". IBM can sell computers through dealers as well as directly.
Considering the degree of pollution in New Jersey one would think that both the public and the government would fall to their knees thanking Tesla and make the Tesla the only car or truck to legally be on any road in the state. And if Tesla has delivered a product so superior that the entire, traditional auto industry is bankrupted then so be it. It also appears that the motorcycle industry will be abandoning internal combustion products quite quickly. Electric motorcycles are beating up gasoline powered bikes with ease at this time. Bills for fuel and almost all repair costs vanish with electric motorcycles. For horsepower as well as torque electric bikes are flat out superior.
Why would GM selling cars directly be bad for anyone except the dealers? You don't get to be a middle man just because you'd lose your job if you eliminate the middle. And if GM ran the dealerships, when a dealership screws someone over, GM's whole brand looks bad, not just some local douchebag.
I mean, can you imagine if Verizon wasn't allowed to sell phones or services directly? You go to a Verizon "dealer" and they get to add 5, 10, or 30 dollars onto your monthly plan if you can't negotiate it down?
Or Starbucks not being able to sell its own coffee, lest they put all these poor middlemen coffee dealers out of business?
Because, based on what I understand so far, they seem to be ancient, anti-competitive laws established by states in response to a perceived crisis that ended decades ago and which are now being used by the formerly-underdog players to abuse their now-dominant positions.
That's basically my understanding of the issue. Wikipedia is a good start.
This NADA PDF has the North American Dealership Association view on it. Unsurprisingly, it supports independent dealers, though their little sheet doesn't impress me.
Reading their 'differences', I'm reminded of firearms as being the next most closely regulated product. There dealerships are also the 'norm', but if Winchester(for example) wanted to open a store somewhere, they would be fully able to do so under their license. Irregardless, none of their points shows a need for independent dealerships, just that there needs to be rules to follow for selling cars.
Has the Traditional Automobile Franchise System Run Out of Gas? - has more.
I don't read AC A human right
Yeah it seems the only reason you'd want to go to the dealership would be to look at the car and maybe get a test drive.
Well, the traditional reason is that you can drive off the lot the same day with a car. Something that Tesla has yet to have the stock to do. So even if you were a 'dealership' you'd have to be calling to tell customers that their new vehicle has arrived. Removing one of the 'benefits' of being a dealer.
That Tesla, thus far, has had only 1 vehicle model at a time to worry about, it simplifies the 'test drive' thing enormously.
As for crowdsourcing their 'test drives', it works somewhat, word of mouth is a BIG Tesla seller. Still, the ability for other interested people who don't happen to know a Tesla owner, such as in a new market, to try one out works.
I don't read AC A human right
I'd say that a Verizon "Authorized Retailer" isn't far removed from the principle of dealerships. And they both screw over their customers...
Yeah it seems the only reason you'd want to go to the dealership would be to look at the car and maybe get a test drive.
Actually, as I understand it (and, no, I don't own a Tesla, but I keep checking their website in the desperate hope that there'll be a roadster there), they don't have "dealerships." Instead, they have "showrooms" where you can go look at the car and get a test drive. But, as I understand it, you can't go to one and drive away in a brand new Tesla.
Remember the old Gateway Stores? It's kind of like that.
Planet Money did a good podcast episode on why buying a car is so horrible:
http://www.npr.org/blogs/money...
http://www.washingtonpost.com/blogs/the-switch/wp/2014/10/22/why-tesla-keeps-fighting-for-direct-sales-when-it-could-just-work-with-dealers/
Are there any actual Tesla dealerships operating in any state yet? If not, then Tesla selling directly to customers who want Teslas instead of Fords, or Chevys, or any other brand is not threatening any businesses. I am guessing Ford and other dealerships are not selling Teslas? If not, then they have no cause to complain since Tesla is selling to those who want Teslas.
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It's BS. Basically, auto dealerships are run by rich locals who are very politically connected with the local government, and they get laws passed which are favorable to their business. Car dealerships are nothing more than a tax on cars, as they add to the cost (through their overhead), but don't provide anything in return. They are a middleman, and middlemen always add cost. Car dealerships (independent, non-factory-owned) are an entirely American phenomenon; they don't exist in other countries. Studies have been done and found that currently, dealerships add around $2500 to the cost of a new car; that's money that every new car buyer has to pay in extra costs, and it only goes to enrich the car dealership. Add on top of all this the horribly inflated service costs at dealerships.
Independent auto dealerships are nothing more than scams, and laws requiring them are nothing more than protectionism. There's lots of car manufacturers out there, and we would be better off just buying from them directly, like Saturn tried to do years ago. Dealership apologists try to claim that buying direct would create a monopoly, but that's a lie since with so many carmakers these days that obviously is impossible. Finally, we're able to buy lots of other stuff directly from manufacturers, such as computers (Dell, Lenovo, etc.), so why don't we have laws requiring us to buy our computers from locally-owned shops? Because it would just cost more and give us less selection, that's why.
The protection of dealerships was originally created for good reasons.
And my gosh, has it been an amazing success story! I mean, is there anyone who doesn't absolutely love the new car buying experience from our independent dealers?
Irony: Agile development has too much intertia to be abandoned now.
Basically what happened is that in the early days, the major manufacturers sold franchises across the US as that was the most practical means of expanding their reach, usually with some kind of territorial rights attached. Later on, they started opening company owned outlets in the most profitable areas and tried to push the franchises out of business. Most states adopted laws at that time to protect the independent dealers from those predatory actions as many would not have survived while fighting to protect their contractual rights in court.
Some states such as Massachusetts still have laws that only protect that existing relationship and don't apply to companies such as Tesla who never had franchisees in the first place. But in most states the car dealers are very influential and those laws are often broader.
Does the mafia still control 80% of those "small businesses" like they used to? My brother in law used to work for a used car dealership until he realized how corrupt and controlled most of them were.
Sigh. A refresher course on terminology.
This was indeed a mafia-like protection racket, but it did not subvert the democratic process. It subverted freedom. It was an example of the democratic process, which subverts freedom all the time.
I am not speaking of using it to form a more orderly society straying from anarchy. Rather, democracy's use in practice often involves setting up special favors that are the opposite of a free market.
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
You are correct, but...
1) Christie was a major anti-Tesla person and he has more power than you think.
2) The same thing happens in republican controlled states like Texas. but unlike the Democrat controlled New Jersey, they don't even let Tesla get 4 sales centers.
3) You are correct about what the history of the car laws, except the 'crisis' was debatable even in the beginning.
the biggest benefit of the private dealership racket is that they buy cars from the mfg, leaving the manufacturer off the hook. if mfg's were forced to all sell direct, they'd have more reasons to focus on building quality cars.
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
Can someone explain how this sort of regulation is any different / better / worse than what's going on with Lyft and Uber?
Yeah, I did some more research after my post and discovered that I was incorrect when I said that it's the same politicians undoing their own work.
Instead, what apparently happened was that the Christie-appointed members of the New Jersey Motor Vehicle Commission barred Tesla from selling cars in the state, thus circumventing the legislature entirely. It's taken the Democrat-controlled legislature until now to get a bill back in front of Christie that undoes that damage (and even then, it doesn't undo all of it).
Mind you, I'm a registered Republican, but sometimes I hate the things "my side" does.