The Car Dealers' Lobby is causing problems for Tesla

tesla

#1

In what seems to be a pretty obvious ploy by the dealers for conventional cars to eliminate competition from Tesla, there is a proposal in NJ to ban Tesla’s company-owned “stores”.

It seems to me that this type of restriction would violate the principles and statutes regarding Restraint of Trade.
What do you think?

In any event, I view it as a despicable action on the part of the NJ car dealers’ association.


#2

Having administered dealer agreements for recreational products, we had to be careful to spell out the terrotory the dealer was expected to cover.

In the area of the head offcie we did not sell anything direct, but supplied equipment (boats, motors, snowmobiles) on a consignment basis for special events there.

I agree that Tesla should not compete directly with their dealers in their areas of operation, but Tesla can promote the car at airports, trade fairs, Olympics, and other special events.


#3

“Tesla can promote the car at airports, trade fairs, Olympics, and other special events.”

I would argue that this constitutes Restraint of Trade, in that Tesla would have to incur the added inconvenience & expense of constantly moving their vehicles and employees from place to place. Additionally, they would not be likely to have the same exposure to potential customers, as compared to their current way of doing business.

At the extremely upscale Short Hills Mall in NJ, they have–literally–thousands of very wealthy people walking past their display windows every day, and a goodly percentage of these folks stop into the “store” for more information, or just to sit in the cars. This strategy must be working, because I am seeing an increasing number of these cars on the road in my area. It will be a while before they outnumber Porsche Panameras, but the number of Teslas around here is growing fast.


#4

Just another example of how lobbies (in this case the automobile dealers’ lobbies) get free-trade restrictive legislation through their power with the politicians… via the almighty campaign dollar. As long as powerful lobbies continue to have power over politicians, it won’t end.

Do I think it’s terrible and unethical and immoral? Yup.
Do the automobile dealers care what I think? Nope.

Business as usual.


#5

Tesla is looking to build their big battery palnt and New Mexico is on their radar.
I hope they DO build it here ( Albuquerque at least ).
They talk about wanting to use a lot of renewable energy for the plant and solar and wind are both plentiful out here.

Here in Gallup , Tesla has a charging station on the west end of town. Just went online last month.


#6

For all of the hype about the cars and their popularity with owners loving them to death, etc, one has to wonder why so many of them end up on eBay and remain unsold even at prices way underneath their original cost. Of course, the second buyer will not get that tax credit…


#7

@Docnick , this isn’t Tesla dealers complaining about Tesla, it’s all other dealers complaining about Tesla. And I can see those dealers’ point - Tesla wants to sell from small shops in malls, with none of the overhead, etc, required of a ‘regular’ car dealer.


#8
Tesla wants to sell from small shops in malls, with none of the overhead, etc, required of a 'regular' car dealer.

By that logic then Wall Mart should be able to Stop Amazon from ever existing. After all Wall Mart has a lot more overhead then Amazon.

How can anyone complain about a company that takes a completely different sales approach that saves them money!!! What is stopping other car companies from doing the same thing? I’d LOVE to see companies like Toyota, GM, Ford do away with dealerships and sell their vehicles direct to the public like Tesla does. We (the consumer) could save thousands…AND have a direct path for complaints. Instead traditional companies have these dealerships that provide a level of insulation for them…sometimes a hard brick wall.


#9

They can complain because there are hundreds of dealers that have operated for decades under one set of rules, often put into state regulations. They’re not just going to say 'Oh, fine, Tesla, do what you want."


#10

The problem goes deeper than just the dealers. Franchisers routinely require of their franchisees mulitimillion dollar expenditures for building alterations, new computer systems, new promotions, etc. etc. These huge investments have to be absorbed by the sales revenue at the dealer level. And, frankly, the franchiser reserves the right to cancel the franchise should they change their business model. Tesla’s business model entirely eliminates these problems, placing the investments directly back on the manufacturer rather than on the franchisee. That could change the business model entirely, to one that undermines the competitiveness of the franchise-based businesses.

IMHO using the power of lobbies to get legislation passed to bar new, more competitive business models is immoral. But I have to admit… immorality is highly profitable.


#11

I think range is still the biggest issue with all EVs.
You can now drive accross the country in your Tesla…BUT…
you have to take the single route that they put their charging staitons on.
That includes Gallup NM in a zigzag from west to north and not in a straight line down 66.


#12
They can complain because there are hundreds of dealers that have operated for decades under one set of rules, often put into state regulations. They're not just going to say 'Oh, fine, Tesla, do what you want."

So lets pass laws that HURT consumers because COMPANIES (I.E. Franchises) may be hurt.

Just because it’s a way of doing business doesn’t mean it’s right. I guess you’re NOT for free enterprise. Instead you want the state government to control how they do business.

I’m all for some regulation on businesses by State or even federal government when it comes to consumer protection. But the laws you pointed out have NOTHING to do with consumer protection…just BUSINESS PROTECTION. And contrary to the supreme court ruling…BUSINESS IS NOT PEOPLE.


#13

How is this any different than small shops complaining about a Walmart moving in? Make way for the new, right?


#14

There was a law years ago in a few towns in NY where to get a Plumber or Electrical license you had to get it approved by the board. The problem was…the board was a body of existing plumbers and electricians. During this shameful period of about 2 decades…there were ZERO licenses granted to plumbers and electricians. The second part to that law…was another law banning any plumbing or electrical work being performed by anyone but a licenses professional.

Those are the kind of stupid business regulations that hurt consumers…but greatly help businesses.


#15
How is this any different than small shops complaining about a Walmart moving in? Make way for the new, right?

Just based on what you said…there are no LAWS protecting either side. What’s wrong with Free Market? Why do we have to pass laws protecting certain businesses…especially when they hurt consumers?


#16

The dealers are worried about a company that has been doing things differently about how it chooses to sell cars, the Tesla dealers don’t need a large onsite service center since the cars don’t require large amounts of routine services. There are great independent Dealers and there are ones that need to take a few lessons on how to treat customers.


#17

If Governor Chris Christie’s administration is successful in prohibiting Tesla from selling directly to the public, then I suggest that computer retailers file suit to block Apple from doing the same thing with their products. After all, if it’s good for the goose, I suppose that it should be good for the gander.

No, I don’t want that to happen, but theoretically it could if our esteemed governor is able to shut down Tesla’s current business model.


#18

Does NJ still have a law saying you can’t have self service gas stations?


#19
If Governor Chris Christie's administration is successful in prohibiting Tesla from selling directly to the public, then I suggest that computer retailers file suit to block Apple from doing the same thing with their products. After all, if it's good for the goose, I suppose that it should be good for the gander.

And let’s not forget outlet stores.

This type of business protection law is just plain foolish.


#20

@ok4450 a quick search for Teslas currently on Ebay came back with a minimum price of the high-70’s, which is pretty reasonable depreciation considering the buyer doesn’t get the tax credit. (there were also some insane prices, like $130,000, but since that’s a Honda Civic more than the brand new Tesla costs, whoever priced it there is smoking something)

If I bought a Model S today, I’d get $7500 back as a tax credit, which makes the $96k car an $89k car. Knock 10k or so off for depreciation and you get the bottom Ebay price. It’s especially telling when you consider that if you live in the right state, you get a state refund on top of the federal one, for up to $15,000 back, which brings the final price of your brand new Tesla down to 77 grand.

And that’s why Ebay Teslas are listing so far below new price.