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Tesla Pushes Even More States To Upend Auto Dealer-Friendly Laws (arstechnica.com)
An anonymous reader quotes a report from Ars Technica: Tesla is now pressing ahead with lobbying efforts that would allow it to expand its direct dealerships in two more states: Nebraska and Wisconsin. For now, more than 20 states already allow the California automaker to sell its own vehicles, while others have set up a system that at least partially bans manufacturers from direct sales and effectively protects auto dealers. Those states include Texas, Michigan, West Virginia, and Utah, among others. Last year, court rulings and changes in the law in Arizona, Missouri, Indiana, and other states have paved the way for Tesla to sell directly to the public. In Nebraska, the new bill under consideration is known as LB 830. It has been met with opposition from existing dealers who are concerned that other manufacturers like GM or Ford will want a similar arrangement. Similarly, in Wisconsin, SB 605 would carve out an exception in state law for a "manufacturer [whose] motor vehicles... are propelled solely by electric power."
Will they be charged in court?
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Normally his business subsists on USING cronyism. It's nice to see him doing something against it by fighting the ridiculous and evil auto dealer protected guild. Elon is doing it for self-interest, but I'll take what I can get.
...why do we have laws on the books to being with, that pre-empt car manufacturers from selling direct to the public and require them to go through dealerships?
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Why wouldn't you want to order a Ford or GM (or Toyota or whatever) directly, instead of having to go through a middleman? Are these laws pure corruption or is there some way to look at them in the best light, where they serve the peoples' interests?
"Believe me!" -- Donald Trump
No where else in the world do these types of protectionist laws for car dealerships exist. They were originally intended to protect car dealers from having to compete with a manufacturer if they wanted to start up their own dealership. Manufacturers were pushing less successful models to their dealers. This was all in the 1920 or 1930's.
Now, the dealerships are using this law as a guise to "protect the consumer", but really it should be transparent that they're doing it because it's easier to lobby and legislate your competition away than to actually compete with them by trying to sell cars.
https://constitutioncenter.org...
I'm not a US citizen so not directly impacted by this specific discussion, but something which interests me about it is the apparent argument [from the dealers] that there is something uniquely special about an automotive purchase that requires that all such transactions cannot happen directly with the manufacturer and must go through the dealer. Why is this?
It can't be simply transaction value: huge numbers of new homes are built every year, many sold by agents and not by the builders.
It can't be because it's a mechanical device or has an engine in it: motor boats and motor yachts are sold every year - many for prices far higher than cars - without enforcing dealership based purchase.
Maybe it's because the dealers can continue to gouge their clients for years and years - on servicing and a raft of other things. Maybe it's because it allows for artificial control of used vehicle pricing.
Bottom line is: there doesn't seem to be any established or practical precedent that explains *why* motor vehicle dealers think they have such a unique use case as to grant them this special dispensation.
Or are they just being precious?
In fact it's a case of business model.
The business model of dealers becomes obsolete once cars need much less service, once they become electric.
Dealership is good at selling cars with options, and performing warranty maintenance.
That is not needed for electric cars, Tesla or others.
aaaaaaa
i think factories should be allowed to sell direct to the public, it could mean saving 2 thousand dollars or more on a car, and considering the cost of new automobiles i refuse to buy a new car anymore, the damn things cost too much, i would rather scour craigslist or those auto-trader magazines for a used car
Politics is Treachery, Religion is Brainwashing
Obviously setting up a dealership network is a huge barrier to entry to new innovation and disruptive technologies. This is just a feature of crony capitalism.
Why not pass a law that says something along the lines of "manufacturers can only open their own manufacturer shops if that manufacturer has no franchised dealers anywhere in the state". That way Tesla (who has no franchised dealers and no plans to open any) gets to open manufacturer shops but Ford and GM and Toyota and VAG and the others dont get to run factory dealerships since they already have franchised dealerships everywhere.
Ends the objection of the franchised dealers where they say "if you allow Tesla in, the manufacturers who provide us with cars will open their own dealers as well and put us out of business".
see subject
Lobbying - if it's good for the goose, it's good for the gander. Doesn't mean that the big three won't do $ome lobbying of their own, though.
Long signatures suck.
Last time I was in the market for a car the first place must have caught a wiff of "fell off the turnip truck." I test drove one vehicle, didn't really like it. The salesman hands me a document acknowledging I'd seen the carfax report. Right after that with a casual "and can I get you to sign this?" he pushes the bill of sale in front of me with an absurd 20% interest rate. I tore it up, stood up and started to walk out. Apparently the salesman and manager had planned this in advance because the manager approches me as I'm leaving and shakes my hand and saying "congratulations" as I was leaving. Congratulations on walking out of a dealership? I wonder how many people that trick works on. I'll bet it's more than 0.
The place I did get my car from wanted to charge me *more* for not using financing. They wanted to tack on around $2,500 to the asking price for paying cash. I was like "no" but I've never had to try so hard to get someone to take thousands of dollars from me on the spot. It was totally insane. I didn't have to pay that added price but I had to make a scene to get it.
In conclusion, fuck the dealerships. Their sole job is to fuck over consumers in new and creative ways just on the bleeding cusp of legal.
Why not pass a law that says something along the lines of "manufacturers can only open their own manufacturer shops if that manufacturer has no franchised dealers anywhere in the state". That way Tesla (who has no franchised dealers and no plans to open any) gets to open manufacturer shops but Ford and GM and Toyota and VAG and the others dont get to run factory dealerships since they already have franchised dealerships everywhere.
Ends the objection of the franchised dealers where they say "if you allow Tesla in, the manufacturers who provide us with cars will open their own dealers as well and put us out of business".
yeah that would be a great reason for the car manufacturers to stop shipping cars to dealers so that they go out of business then they can open up their own dealers
next you will suggest molotov cocktails as an incentive?
Am I missing something? I wonder why Tesla even bothers. Just open up a building and take people for rides where a dealership is illegal. If people like the car they can order online. I guess it's nice to have local service and maybe people like a traditional dealership experience.
I work in the industry.
GM, Ford, etc, selling directly to consumers won't save you money, not a lot, anyway. The markup from OEM to dealer is tiny, except on trucks. For small to midsize models, they have to sell millions. Car dealerships make money on things like financing, protection plans, etc. No one likes car dealerships but if direct sell became the norm tens of thousands of people would lose their jobs, not just in dealerships but in industries that support it. My company employees five thousand people who support dealerships and their software, including me. This is one of the reasons OEMs oppose this, they have a whole industry to look after.
Most dealerships, surprisingly, have a willingly captive audience.
I live in a moderately sized city where "small town" attitude runs rampant, and the prevailing attitude here is that it's one's civic duty to shop locally - even if that means getting screwed over. There's a dealership in a neighboring city that advertises along my commute with billboards to the effect of "drive 50 miles, save thousands" but many locals are reluctant to travel even to the next county.
So, although it's widely known that most of our local dealerships are extremely shady, the locals don't care. I even once had a salesman, when I said that I had found a better price across the state, reply that why would I drive three hours away instead of supporting a local business... you know what, taking my business elsewhere is exactly what I'm going to do.
If you're willing to travel, you can actually find some reputable, honest dealerships out there. We use USAA's car buying service to shop for the best price, and some dealerships are surprisingly much more willing to work with you if they know that you're not geographically limited. If I don't like what I'm hearing over the phone, I can hang up and you've lost any chance of a sale. Last time we bought a car, we drove all the way to South Carolina, and saved several thousand dollars. Before that, we drove to Ohio. Each time did cost us a weekend, but we got two decent road trips out of it... and one manager actually walked in after we had closed the sale and handed us an envelope with $300 cash, for travel expenses, to thank us for driving out of state to give them business.
To make long story short, in the 1930s some people wanted to break up the car companies, saying the same company couldn't both manufacture cars and own the dealerships.
You can imagine if Microsoft in 1998 made not just the OS, but also the PCs and owned the stores that sold them. Some people would want a new law saying Microsoft couldn't own the stores too. The thing is, laws ALWAYS have unintended consequences.
In the 1930s some people wanted to break up the car companies, saying the same company couldn't both manufacture cars and own the dealerships.
You can imagine if Microsoft in 1998 made not just the OS, but also the PCs and owned the stores that sold them. Some people would want a new law saying Microsoft couldn't own the stores too. The thing is, laws ALWAYS have unintended consequences.
Just not sure why Tesla feels the need to challenge. Wouldn't it sell more cars just by playing by the rules? I do think Tesla's business model is simply not sustainable. As others have said, dealerships don't make a lot selling new cars. They do on service and on selling used cars. Since Tesla doesn't embrace this model very well. It has suffered in finding a way to make money. Oh and in most states you can buy a car without going to a dealer except to pick it up. Most dealership regulations by the state help make sure dealers are following proper business practices.