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Tesla Sues Michigan Over Sales Ban (usatoday.com)
An anonymous reader quotes a report from USA Today: Electric automaker Tesla Motors filed a lawsuit Thursday against Michigan state officials, escalating its multi-year battle to sell vehicles directly to consumers. Tesla's action comes less than a week after Michigan Secretary of State Ruth Johnson effectively rejected the automaker's application for dealership and service facilities by asking for proof that Tesla is a franchised dealer. Tesla, unlike other automakers, sells its cars directly to consumers through company-owned stores in other states. "Tesla Motors brings this lawsuit to vindicate its rights under the United States constitution to sell and service its critically-acclaimed, all-electric vehicles at Tesla owned facilities in the State of Michigan," the automaker said in its complaint in federal court. The California automaker named Johnson, Michigan Gov. Rick Snyder and Attorney General Bill Schuette as defendants. Tesla submitted an application for a dealership license in fall 2015 with a plan to open a retail gallery in Grand Rapids, Mich. In a Sept. 7 hearing, a panel of administrative law examiners heard arguments. Last Thursday, they rejected the license for Tesla. "The license was denied because state law explicitly requires a dealer to have a bona fide contract with an auto manufacturer to sell its vehicles," Johnson said in a statement. Tesla wants to sell its high-end battery-powered cars directly to consumers without a franchised dealer, much like Apple sells its products. The automaker's lawsuit asks a federal judge to declare that the state violated the due process and equal protection clauses of the Fourteenth Amendment and the constitution's commerce clause. Snyder signed a law in October, 2014, that prohibited Tesla from selling cars directly to consumers by requiring all automakers to sell through a network of franchised dealers.
these old laws were in place for a reason.
Old laws? Did you read the article or just skim the summary?
Snyder signed a law in October, 2014, that prohibited Tesla from selling cars directly to consumers by requiring all automakers to sell through a network of franchised dealers.
In terms of legislation, since when is 2014 considered "old"? They introduced this law right before Tesla planned to open an outlet and blocked them from competing with the local dealerships. That stinks
People need to stop voting for asshats like the MI governor. They should be allowed to do business. The fossil fuel industry is intent on dragging us into the abyss and their minions need to be kicked to the curb.
Adam Ruins Everything - The Real Reason Car Dealerships Are the Worst.
Summarising the vid: dealerships have pressured/lobbied Congress (in the US) to pass franchise laws. Which make it so you can only sell new cars if you're a car dealership. And there are dealership "territories" so it's illegal to open a new one in another dealership's territory. So car manufacturers in most (all?) states can't sell directly to customers.
(Though I'm not quite sure how Tesla has been able to sell cars directly to customers in states other than Michigan.)
I must say that my experience with Tesla is the polar opposite of my experience with a local dealership. In both cases I had to wait 6 months to get the car I wanted. With the dealership I ended up with my 3rd choice of color and they kept pushing me to take a white car either missing options I wanted or with extra options I did not want. When I picked up my car they tried to sell me a bunch of stuff I didn't want. After I got the car they would frequently try and push extra service the car didn't need or didn't bother trying to find a very common problem the car had. Then just after the 3-year 36K warranty the HID headlights started burning out, another well-known problem with the car I bought. Despite the fact that I had a 7 year, 100K warranty and that the headlight bulbs were well under the rated lifetime they wanted to charge me $200/bulb ($50 on Ebay) plus a ton of labor. I have since sold the car to my father and the center display touchscreen stopped working. The dealership wants $5K to replace it, much of that for labor. The touch screen costs a fraction of that and I found a youtube video where a woman shows how to replace it in around 20 minutes with simple hand tools.
With my Tesla I got exactly what I wanted. Up until they made my car I could pick and choose what options I wanted through the web site with it immediately updating the price. This is unlike a dealership where I'd have to wait until they got something in inventory or found a car elsewhere with my requirements. With Tesla, most cars are made to order so there's no inventory sitting on dealer's lots other than test drive vehicles and loaner cars. The people running the showrooms do not earn commissions and there were no high-pressure sales tactics. They were there to show the car. I would say most people there were simply looking and probably not going to buy one but they treated everyone I saw there with the same respect they did me.
For loaner cars, which are always fairly new and usually with many bells and whistles there's always the option of trading in your car for the loaner car.
Tesla has always treated me well when it comes to service. My car had a number of issues, mostly rattles and other noises since my car was one of their early cars. They learned a lot and made a lot of improvements since I got mine.
Last spring I got a hole in the sidewall of my tire out in the middle of nowhere and the closest tire center was 62 miles away. I called Tesla which has free towing for up to 50 miles. They sent out a tow truck and put it on a flatbed to the tire center I selected after calling around between Tirerack and the tire centers and asked the tow truck driver how much I had to pay to make up the difference. He said Tesla covered it even though it was over their limit. Tesla also called me back to make sure everything was OK. The biggest hassle was the fact that I have low profile performance tires that aren't commonly stocked.
They have always gone above and beyond with service and when I have had to pay for it like when I broke a clip on my car they did not gouge me parts or for fixing it unlike the Toyota dealership.
Another time I had a blow-out and bent rim due to San Jose's poor excuse for a road at 3am. I called them up and they sent out a tow truck with a replacement wheel and tire until I could come back at my convenience and have them replace it (I bought tire and rim insurance through Tesla).
The last time I had service done on my car they dropped my car off where I work and picked up the loaner.
Elon has stated on numerous occasions that they do not want to make a profit off of service. This is the exact opposite of how dealerships work. Most dealerships don't make much money selling cars. They make their money through financing and service. If there's any complaint I have about service it's that if it isn't something that needs to be taken care of immediately that there's often a wait since they seem to have problems keeping up with demand. Since I also use the service center at the factory, it is also busy helping prep new cars so certain times are particularly bad like the end of the quarter.
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Wait you didn't rtfa they have the right to sell just not to the consumer, only to a third party who will then mark up and resell it to the consumer. They do this under some misguided notion that this extra cost of a middle man somehow protects the consumer and local economy.
In Michigan it's not easy to become a dealership (not a franchise -- they can't sell cars).
You first have to join the dealer trade association. Then you have to apply to become a franchise with the state. The Secretary of State decides your initial market area that you are allowed to cover. If you don't belong to the dealer trade association, you immediately are not given a territory, and most likely won't be approved by the State. In order to get your dealership license, you also have to have a setup for service, dollars spent, setup with the SOS for tab registration, etc. Essentially you have to dump a ton of money into the location right away -- in essence a huge barrier to entry for anybody starting up.