36 ms·
Tesla opens a center on Native American land, selling cars straight to consumers
- mrfusion 5y agoAnyone know why this isn’t a loophole for all kinds of laws? They’re basically their own countries right?
- HideousKojima 5y agoIt already is for gambling laws, obviously.
- protomyth 5y agoWell, not exactly. They are absolutely ruled by the Feds, and each tribe has a compact with the state that determines what kind of gambling can be done. As an example see https://500nations.com/Montana_Casinos.asp https://500nations.com/Montana_Casinos.asp
- klyrs 5y agoYear-round fireworks stands are another common one
- jandrese 5y agoIt is, but in order to exploit the situation you have to get the tribal council on your side. So you can't set up a brothel on tribal lands because the tribe won't allow it.
- stevehawk 5y ago... because it isn't profitable enough?
- cco 5y agoI can only speak to weed, but the tribal reservation that I was on would not allow weed production for a couple reasons, one is that they receive quite a lot of federal funds and assistance, importantly they let the DEA run drug enforcement/stings, and the tribe doesn't want to rock the boat unless there is a very clear and well supported upside. Not everyone in the tribe would be supportive, i.e. it would be a political risk. You would probably generate some tax revenue, but especially in the early days (in Oregon), it wasn't clear how much you'd make, whether banks would support you, whether the DEA would get angry about "interstate" commerce, regardless of their actual jurisdiction etc. So their answer was, at the time no, you cannot grow weed commercially even though there wasn't really anything stopping them at that point. However they, and many other tribes, operate casinos(against the law in their state) and sell fireworks, potentially against state law or city ordinance; the latter because the ATF doesn't care, and the former because it represents over 80% of the tax revenue of the tribe and there is a history already built there between regulators and the tribe.
- gamblor956 5y agoCars purchased on a reservation generally don't qualify for state EV incentives. Reservations are sovereign to a degree but are not their own countries; they are still subject to federal laws so they are essentially equal to states (see https://www.bia.gov/frequently-asked-questions https://www.bia.gov/frequently-asked-questions). If reservations were were their own countries buyers would have to pay import duties if they took items purchased on reservation land off reservation lands. As for the eligibility guidelines, see CA's guidelines: https://cleanvehiclerebate.org/eng/eligibility-guidelines https://cleanvehiclerebate.org/eng/eligibility-guidelines
- PaulDavisThe1st 5y ago> Cars purchased on a reservation generally don't qualify for state EV incentives. Citation? Are you also claiming that if i live in NM but buy my Tesla from CA, there's also no state EV incentive?
- gamblor956 5y agoYes, because state EV incentives are limited to state residents. See, for example, from CA's EV incentives page: https://cleanvehiclerebate.org/eng/requirements/919 https://cleanvehiclerebate.org/eng/requirements/919, or the more readable version: https://cleanvehiclerebate.org/eng/eligibility-guidelines https://cleanvehiclerebate.org/eng/eligibility-guidelines
- jvanderbot 5y agoSo, selling to non-state residents won't provide an incentive to the buyer, but buying from non-state residents would? I can buy my car from a foreign person and still receive incentives because I live in a state that offers them? This has little to do with selling cars on tribal lands if so.
- gamblor956 5y agoNo, both the buyer and the seller must be residents of the the state providing the incentive. Tribal land is not state land, so sales by tribal dealerships do not qualify for state incentives. This is decades-old established law across the U.S. This is just another example of Musk thinking he's found a clever loophole without realizing why nobody else was doing it in the first place (hint: because it doesn't work, and Tesla would have learned this spending less than an hour consulting with someone who handles tribal law).
- vmception 5y agoThere are 500+ Of these distinct microstates in the US which aren’t even on any map. They all have their own separate case law, legal structure, processes. There is no chronicling or comparison of any of this. Current Indigenous people recognition suffers from overinclusivity, grouping many distinct cultures as one - which has been necessary for representation but is counterproductive in many ways. (For example, do all headdress wearing tribes care about who wears a headdress, how do you know one didnt create a licensing system specifically sanctioning random people wearing it for whatever reason, if they did sanction it are they the proper authority to sanction it, should a century long squabble between two tribes over this issue matter to us? These are the kind of nuanced questions that aren’t being asked) The infrastructure is very low in practically all. It doesn't have to be. Each one has to be approached distinctively. There is much that has never been challenged. There is no specific reason. Although there is a shared general distrust of those who look like the people in the majority.
- theandrewbailey 5y ago> There are 500+ Of these distinct microstates in the US which aren’t even on any map. There are approximately 326 Indian land areas in the U.S. administered as federal Indian reservations [0] https://biamaps.doi.gov/indianlands/ https://biamaps.doi.gov/indianlands/ https://www.bia.gov/sites/bia.gov/files/assets/public/webteam/pdf/idc1-028635.pdf https://www.bia.gov/sites/bia.gov/files/assets/public/webtea... [0] https://www.bia.gov/frequently-asked-questions https://www.bia.gov/frequently-asked-questions
- vmception 5y agoThanks yes that would more accurately convey the semi-sovereignty available There are more tribes still seeking this
- dougmwne 5y agoIt's highly complex. Tribal governments function sort of like limited U.S. states. Generally, federal law applies, but not the hosting U.S. state.
- fnord77 5y agotax free tobacco, fireworks and gambling are what I have seen
- babypuncher 5y agoIt is a loophole for lots of laws. Casinos are huge on reservations in states where gambling isn't illegal. There have also been many notable cases of shady payday loan companies moving onto reservations to escape regulations on interest rates and other fair practices around lending.
- dragonwriter 5y ago> They’re basically their own countries right? No. While they have their own laws subject to US federal law, that law has limited authority over non-Indians, especially on non-Indian owned property, on Indian reservations.
- IncRnd 5y agoThey are sovereign nations, but often use a state compact. This "loophole" exists because of what was done to Native Americans.
- dragonwriter 5y ago> They are sovereign nations Yes, but not in the sense that the US is sovereign. Or even the sense that US States are sovereign. “Sovereign” in US domestic law means a lot of different things, and tribal governments are pretty much the least sovereign of all the US’s sovereginties.
- protomyth 5y agoNo, sometimes, and yes. Its really a complicated relationship. To give a specific example, look at all the things in a police stop according to the latest SCOTUS ruling https://www.scotusblog.com/2021/06/affirmation-of-inherent-tribal-power-to-police-blurs-civil-and-criminal-indian-law-tests/ https://www.scotusblog.com/2021/06/affirmation-of-inherent-t... The reservations answer to the Feds and have compacts with the states. Tribal sovereignty is complicated.
- injb 5y agoHow weird it is that "Company Finds Legal Loophole That Allows Them to Sell Things To People" is news!
- llampx 5y agoIt's Tesla so it's a Good Thing.
- spiderice 5y agoIt's a good thing because it's a stupid law. People would praise any company that took advantage of this loophole. Though yes, other companies wouldn't get the headlines that Tesla gets for doing it.
- PaulDavisThe1st 5y agoHow stupid is it to try to stop e.g. Ford from undercutting existing Ford dealerships, and repatriating income and profit from e.g. NM back to e.g. MI ?
- babypuncher 5y agoAre you suggesting that direct to consumer sales should be banned across the board? Everything anyone buys should have to go through a middleman?
- PaulDavisThe1st 5y agoNot at all. I'm just saying that if a manufacturer relied in the past on non-company owned businesses to establish markets, it's not clearly wrong to prevent the manufacturer from undercutting those businesses by opening company owned stores in the same locations. I think that Tesla should be allowed to open a store wherever they want (subject to other rules & regulations), since they have never used dealers.
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- ilamont 5y agoIf Tesla can activate their own showrooms in more reservations across the U.S. and drive a stake through the heart of third-party dealerships, that's a positive development. I hope that Tesla (and other auto manufacturers) can go one step further and provide lasting, meaningful employment and other opportunities to local residents in the reservations. Casinos often fail or extract exploitative concessions and demands on local tribes.
- URSpider94 5y agoThey don’t have to do this in most states. Only a few states have laws against selling cars factory-direct.
- lotsofpulp 5y agohttps://finance.yahoo.com/news/cant-buy-tesla-states-161318245.html https://finance.yahoo.com/news/cant-buy-tesla-states-1613182... As of Oct 2018. >Where Tesla is banned >Here are those states: Alabama, Arkansas, Connecticut, Iowa, Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, New Mexico, North Dakota, Oklahoma, South Carolina, South Dakota, and Texas. >Then there are nine states that limit the number of dealerships Tesla can open: Colorado (limit: one), North Carolina (one), Virginia (two), Georgia (five), Maryland (four), New Jersey (four), New York (five), Ohio (three), Pennsylvania (five).
- delecti 5y agoIf my count is correct, that's a full half of states in total. And the states in the second group are all large enough that it's a meaningful limit to be only allowed a handful. For comparison, there are 7 Toyota dealerships just between the Denver and Boulder Colorado areas (using their "find a dealer" tool makes it hard to be more thorough than that).
- jillesvangurp 5y agoI'm guessing the Texas situation might change given how much Tesla and SpaceX are investing in Texas right now.
- wellthisisgreat 5y agoWhat is the charitable excuse for the law that enforces the use of third-party car dealerships? Something about avoiding monopolies?
- janderson215 5y agoIt’s an outdated law (IMO) meant to protect car dealerships from manufacturers opening up dealerships down the road and undercutting them. I think it’s similar to the law preventing movie studios from opening theaters.
- belltaco 5y agoThat plus heavy lobbying and donations by car dealerships making a lot of money. Electric cars are also bad for their fat profit margins on service for ICE cars.
- PaulDavisThe1st 5y agoIn what sense is it outdated? What has changed that means that it used to be relevant, and now no longer is?
- jsight 5y agoIf I wanted the status quo, I'd argue that dealers have gained enough power to accomplish the same thing without state laws. Look at what happened when US manufacturers tried to decrease the number of dealerships for an example. They fought it out with a barrage of lawsuits and the efforts were only really minimally successful. Its really unlikely that existing brands would be able to change at this point, at least the US brands.
- trey-jones 5y agoMaybe only perspective. In my view, car manufacturers should be competing with other car manufacturers, rather than independently operated dealerships. If a dealership provides a value to consumers then it should survive. If not, then the consumers are better off without them. At the very least, I would like the option to buy directly, since I probably don't use the services provided by the dealership anyway.
- ur-whale 5y agoThis is really nice. And more generally speaking, having much smaller states where you could drive 10mn to the state next door to do things your own is too dumb or too corrupt to let happen is a fantastic idea. Competition FTW !
- awolnikowski 5y agoThat's basically New England; in college we would make the short drive from Connecticut to Massachusetts for legal weed all the time!
- dbish 5y agoExtend that to countries and you get some Snow Crash-like distribute republics :)
- psyc 5y agoThey say sometimes the cahs what come outta theya, well sometimes them cahs drive ‘emselves.
- fnord77 5y ago> He told The New Mexican that the state's auto dealers had "absolutely opposed" the legislation. The bill ultimately fell through.
- PaulDavisThe1st 5y agoThis is a great example of the problems with the precise wording of laws. The intent of the NM law that prevented Tesla from doing this e.g. in downtown Santa Fe was to prevent manufacturers from undercutting dealers who had done the work of proving a market by opening their own stores in direct competition. There are arguments for and against this, but it's not clearly a completely stupid idea on its face. But of course, the law wasn't written to deal with a scenario where there's a new(ish) manufacturer that has no dealers anywhere, least of all in NM, and has no plans to ever have dealers. It only sells its cars in company-owned stores, and opening a new store is not undercutting any existing dealers. Would the legislators who voted for the legislation have understood the difference if the idea had been presented to them back when this was passed? Would they have worded it differently?
- andjd 5y agoBut now that these laws are on the books, the existing owners of dealerships actively lobby the state legislators to keep this as the status quo and reduce competition. The dealers, and lawmakers, hope that Tesla will give in and start selling through existing dealerships.
- Mountain_Skies 5y agoReminds me of how the alcohol distribution system in some states causes ridiculous situations such as requiring Trader Joe's to sell their inhouse wine to a distributor and then requiring them to buy it back in order to sell it in their stores. Obviously the distributor loves this as they get to rent seek while adding no value at all. That gives them plenty of money to lobby with to keep them in the loop.
- opinion-is-bad 5y agoI can confirm this. I opened a distillery during the pandemic and had to pay a middle man during some online sales simply to cover legal requirements. The middle man never even handled the product. Very frustrating way to spend money.
- pugets 5y agoI think I understand the motivation for having a law prohibiting auto makers from selling straight to consumers. I’m sure it has more to do with money than ethics. My question: Why autos, but not other consumer goods? Should I be restricted from buying an iPhone from an Apple store, rather than Greg’s Phone Emporium?
- fred_is_fred 5y agoIt's very clear - because Greg's Phone Emporium does not hold local political power like car dealers do. They excel at it.
- Zigurd 5y agoRegulations on various types of alcohol distribution are pretty interesting, too. https://en.wikipedia.org/wiki/Three-tier_system_(alcohol_distribution) https://en.wikipedia.org/wiki/Three-tier_system_(alcohol_dis...
- xGrill 5y agoThe biggest reason has to with cost. The average consumer does not need to take out a loan to buy a phone, but most do for cars. Cars are seen as a large investment that needs added protection, and instead of doing it at the auto manufacturer level, they added dealerships to serve as middlemen to bargain with auto makers on your behalf.
- KingMachiavelli 5y agoBack in the day, a vehicle was a pretty big purchase so you wanted to know that you could get service & maintenance throughout the life of the vehicle. If the dealership is nothing more than a front for the manufacturer then they might move the store if business is slow, etc. Forcing the use of franchised stores meant that the dealerships are owned (always?) by local people so they can't just move away. Now days other laws pretty much make this a non-issue although you could argue that the repair/service process for Tesla's is exactly what these laws were intended to prevent; who would want to own a Tesla dealership if you can't get the parts to fix your customers's cars? e.g. Your son's basketball coach is going to keep calling until you get his car fixed. In your example, you would be restricted to buying from Greg's Phone Emporium because Greg is thought to care more about repairing your phone than Apple. Edit: The biggest issue with the current dealership system is that it, of course, just evolved into rent seeking and over-complicated purchase process. The auto companies have systems to make sure dealers sell cars no matter what and the dealerships have ways of extracting extra profit from their customers.
- ethagknight 5y agoLike Ford did in Turkey/Baltimore (updated per comment below) with the Transit Connect import tariff circumvention, makes me wonder if Tesla built a "factory" on tribal lands to circumvent the 200,000 EV federal tax credit limit as a separate manufacturer that licensed the technology and bought the parts from Tesla, Inc, and did some "final assembly" nonsense like put the rear seats in. https://en.wikipedia.org/wiki/Ford_Transit_Connect#Tariff_circumvention https://en.wikipedia.org/wiki/Ford_Transit_Connect#Tariff_ci...
- adolph 5y agoDo you mean to refer to the Turkish Transits imported as passenger vehicles and converted to cargo use? The move to Mexico would bring them in alignment with tariffs to directly import cargo vehicles. The next-generation Transit Connect, due for the 2022 model year, will be fully assembled for North America in Mexico at Hermosillo Stamping and Assembly. Like all future Ford products built in Mexico, it will comply with the 75% US/Canada/Mexico content rule of the new USMCA trade deal set to take effect in 2020.
- ethagknight 5y agoYes thank you, I was mixing the two
- Ichthypresbyter 5y agoThe chicken tax (the tariff in question) is also why the Subaru BRAT had those ridiculous seats in the bed. https://en.wikipedia.org/wiki/Subaru_BRAT#Jumpseats https://en.wikipedia.org/wiki/Subaru_BRAT#Jumpseats
- rmason 5y agoHere's hoping Musk tries the same thing in Michigan to get around the hold that the auto dealers have on the state legislature. I know there are tribes in Battle Creek and Mt. Pleasant who would probably welcome a Tesla dealership, especially if it drew traffic to their casinos.
- 99_00 5y agoGetting the law changed would be hard. Sounds like a win for Tesla and the Native band.
- jcun4128 5y agoRandom comment: I get how manufacturing works (batch) but whenever I see rows and rows of brand new cars just sit on seller lots like that's crazy.
- alasdair_ 5y agoNew laws and loopholes and being created for car dealerships even today. For example, WA state has a new Capital Gains tax of 7% that applies to almost every gain in the state except for personal homes and... car dealership sales.
- tzs 5y agoHere is how laws banning direct sales of cars came about: https://www.newyorker.com/magazine/2006/09/04/dealers-choice-2 https://www.newyorker.com/magazine/2006/09/04/dealers-choice...
- Sunfllowerfly 5y agoCar dealers provide a lot of utility. They let you test drive cars, help with financing, provide warranty service, buy your trade in, etc. Even without these archaic laws these utilities would still be needed. However, the market would likely find far more efficient business models than the currant car dealer. It is time to end these laws that stop competition. Let America innovate with better business models. The only losers are current car dealership owners that refuse to adapt.
- sabareesh 5y agoInteresting take on services, Tesla do provide all these services test drive, financing, repair, warranty, trade in
- ericmay 5y agoRight. Hell, Tesla will even drive to my house to fix things if they can. I’ve never had a Honda or BMW dealer do that. And yes this just shows those services are valuable, and likely at reduced costs as well.
- fragmede 5y agoWhere have you owned a BMW? Honda, no, but in areas where there are fewer people rich enough to own a BMWn(maintenance on those things adds up), they'll go the extra mile, with pickup, and loaner cars.
- ericmay 5y agoHonolulu, Hawaii. This was in 2009/2011 or so. When my temperature sensor stopped working I had to drive it down for them to fix it. They gave me a loaner too, some early 2000s Honda CRV. But just to be clear my comment was more so directed at the general services aspect. Don’t count my single experience to be a good data point. :)
- vkou 5y agoThe lack of a network of competing dealerships and independent mechanics means that Tesla gets to charge whatever they want for repair, with no ability of the market, or competition to drive down costs. This isn't a good thing.
- BenoitEssiambre 5y agoWell that's a much better use of these loopholes than fueling gambling addictions with casinos.
- dreamcompiler 5y agoI'm overjoyed by this. There are a boatload of Teslas in New Mexico (including mine) and all of us had to buy them in Phoenix, Denver, or El Paso and that's where we have to go for service. Or had to until now. This is an ingenious solution to bypass a stupid law. The car dealers in NM who want to keep Tesla out can pound sand.
- kevin_thibedeau 5y agoThe law isn't to blame for your inability to get local service.
- pertymcpert 5y agoWhat is then?
- bubblethink 5y agoThey are probably talking about the other side of the coin, which is that Teslas are made like iphones. Nobody other than Tesla can repair them.
- watt 5y agoAre you sure? I watch Bjørn Nyland's channel and he goes to an independent repair shop in Norway to fix out-of-warranty Teslas. And there's quite a few of those cars in Norway by now.
- sumedh 5y agoThe independent repair shop probably gets spare parts from other broken Teslas not directly from Tesla
- kevin_thibedeau 5y agoTesla can open service centers in all 50 states or allow other vendors to service them. Tesla doesn't want you to have the freedoms that Magnusson-Moss guarantees you.
- imwillofficial 5y agoTesla really loves and breathes thinking outside the box. One day they’ll be an interesting case study in business school.
- WalterBright 5y agoThis suggests an enormous opportunity for Native American land, normally mired in poverty. Establish free trade zones, not subject to the anti-business, heavily taxed rest of the states.
- koolba 5y agoSo pretty much what they’ve already done with casinos?
- WalterBright 5y agoThere's so much more than casinos.
- 908B64B197 5y agoI think a Tesla Store might attract a different crowd.
- dragonwriter 5y ago> So pretty much what they’ve already done with casinos? No, what they've done with casinos is leverage demand plus state prohibition to eatablish heavily regulated, heavily taxed, licensed local monopolies, that extract monopoly rents from consumers, and from which the native governments likewise extract monopoly rents (leaving sufficient remainder for the operators to be happy with the deal.) Casinos are pretty much the opposite of the proposed “win the race to the regulatory and revenue extraction minimum” game suggested for the “free trade zones”.
- boomboomsubban 5y agoSo rich outsiders abuse a loophole until the states find some way to work around it, leaving all of the rich to abandon the reservation with virtually all of the profit. Really not seeing now the Natives benefit from this.
- xyzzyz 5y agoEven if it happens like you suggest, things will simply return to status quo, and the Native Americans won’t be worse off than they had been before. In fact, they will benefit during the period from the free trade zone set up to when the state/federal government wreckers figure out how to screw them too. This is still better off than the status quo, where they simply never benefit from it at all.
- throwaway088 5y agoWhy did it take so long? Seems like an obvious thing in hindsight?
- gigatexal 5y agoSay what you will about Elon but this move is such a gangster move, such a finger “on both hands up” to the face of the dealership lobby. I’ve a ton more respect for him now. Dealerships are places where one has some of the worst experiences.
- SMAAART 5y agoLOL, this is beautiful!
- asdff 5y agoAnyone know why Tesla is trying to intricately jump through all these hoops rather than just, you know, use dealerships themselves like Ford does? I think Elon just thinks the idea of independent dealerships is too much of an anchor and thinks he can force a change in the law. Let's see how he does. This has been something that every auto manufacturer selling to the US market has tried to get overturned for the past 100 years, so I'm not holding my breath that he will find much success unless he gets some serious allies from Detroit to stand by his side in Washington.
- 1123581321 5y agoThe conventional wisdom has been that dealers wouldn’t prioritize Tesla cars and Tesla would end up having to heavily discount/incentivize them to move them off lots, as other electrics tend to require. Ultimate success remains to be seen but their direct sales method has done surprisingly well and Tesla centers don’t have the reputation typical of car dealerships yet.
- asdff 5y agoMany dealerships sell only one brand of car.
- 1123581321 5y agoTo finish the thought, many dealerships have locations devoted to one brand, which is a bit different. e.g., this group operates a brand-exclusive location near me. This is not the kind of focus Tesla wants and the gravity of the larger operation would not lend itself to radically different operations and employee education. https://www.napleton.com/mobile.php https://www.napleton.com/mobile.php
- mlinsey 5y agoThey have said that only Tesla can best explain the best advantages of their cars, a similar justification that Apple gave when they opened up their own retail stores. And while I can now buy Apple laptops at Best Buy, I do usually pick Apple stores and prefer that experience. I will say as a consumer, I dislike the typical car dealership user experience. Lots of back-and-forth games on pricing, getting upsold on random add-ons or financial products, having to wait around a lot while your rep checks in the back about yet more paperwork, etc. Maybe some people feel this bazaar-like experience helps them nab a good deal, but I doubt I'd be worse off paying a standard price set by the manufacturer, delivered to me by a store that's not trying to squeeze out their own margin through those add-ons.
- simondotau 5y agoStates could kill two birds with one stone and allow manufacturers to open up one factory store for every N independent service and repair shops which have full access to manufacturer documentation and the full parts supply chain.
- jbigelow76 5y agoStates could kill two birds with one stone... The laws preventing manufacturers from going straight to consumer are there because of lobbying, there is no indication most states would desire killing one bird much less two.
- OJFord 5y agoI suppose the original title: > Tesla opens a showroom on Native American land in New Mexico, getting around the state's ban on automakers selling vehicles straight to consumers Was too long, but could I suggest somehow including the link between 'on Native American land' and 'selling directly'? Perhaps it's clear for those in the US, but my reading was more like the act of building on NA land was illegal, and the direct selling was an unrelated detail.
- FroshKiller 5y ago"Tesla evades direct sales ban in New Mexico," maybe. It's a simple description of the company's behavior with the location for context.