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Georgia dealers want Tesla store shuttered for selling too many Teslas
- rtpg 12y agocouldn't they just open another dealership right next to the old one?
- deleted 12y ago[deleted]
- eru 12y agoProbably not.
- malka 12y agono, but they can open a show room. Where there would be computers that people could use to order Tesla's online. Also, that would probably mean less money for the state of Georgia, since the taxes would be paid in another state.
- seanflyon 12y agoThis depends upon how the court defines a car sale.
- sliverstorm 12y agoDoes anyone know why this 150 vehicle limit exists?
- lupin_sansei 12y agoIt's a law to protect dealers being undercut by the manufacturers selling direct to the public. http://truthonthemarket.com/2013/06/24/tesla-and-the-auto-dealers-lobby/ http://truthonthemarket.com/2013/06/24/tesla-and-the-auto-de...
- rhubarbcustard 12y agoDoes that law make any sense other than to protect the jobs of the dealers?
- rweir 12y agoit was initially to stop manufacturers vertically integrating all the way from building cars to running stores.
- logicallee 12y agoWhich would suck why again? e.g. why on Earth would anyone hate the existence of physical Apple stores, for example? (which fits the description of "a manufacturer vertically integrating all the way from building [PC's] to running stores.")
- psykovsky 12y agoAnd yet you can still buy Apple stuff at any major retailer or high street store. The retail lobby doesn't seem to mind much.
- kevin_thibedeau 12y agoThere was a time when Apple only sold through franchisees and were unable to sell direct.
- rweir 12y agothink of Bell or the oil companies of the early 20th century.
- ams6110 12y agoThe original purpose of these laws was to prevent a manufacturer from selling direct in a market that a dealer had developed. The dealership model allowed manufactures to expand much faster and with less risk than if they had sold direct everywhere. Once the dealers developed the market, there would have been a large incentive for the manufacturers to simply open up a local direct outlet and keep all the dealer commissions themselves. Tesla has never had a dealership network, so I don't see why this should apply to them. But that is why these laws came to exist.
- adamnemecek 12y agoSeems like Tesla has a different opinion http://www.bloomberg.com/news/2014-09-03/tesla-denies-georgia-dealers-claims-that-it-broke-rules.html http://www.bloomberg.com/news/2014-09-03/tesla-denies-georgi...
- 300bps 12y agoTesla said the sales restrictions under its license agreement are applicable on a calendar year basis. GADA, which represents 500 dealerships, said in its Aug. 29 petition that Tesla sold 173 sedans in the period from October to June. So in essence, the law perhaps ambiguously states that you can not sell more than 150 cars in a year. The dealerships are interpreting this as "more than 150 cars in any 12 month span" whereas Tesla is interpreting this as "more than 150 cars in a calendar year". On its face, Tesla has the stronger argument.
- smackfu 12y agoThey still seem pretty close to the line there. I wonder if they were planning to stop sales at 150.
- randyrand 12y agoNot as close as you think. If it's not calendar months, then it is almost impossible to make actual sense of. If you wanted to limit yourself to 150 cars per year regardless of the start and end months, then you have to limit yourself to 12.5 cars a month which makes a whole lot less sense. Even still, at the day level you then have to restrict yourself to 0.411 cars a day. Then the hourly level... Things are made simpler if you aren't close to the limit, but what is the purpose of expressing a limit if you aren't intended to get close to that limit? for example, let's say you have this sequence (assuming the law is 150/year regardless of calendar months: 12.5, 12.5, 12.5, 10.5, 14.5 , 12.5, 12.5, ..... Boom, you're over if you continue to sell at 12.5 a month. You can compensate for the 14.5 by having another month of 10.5 within 12 months of the 14.5 month, but then you are under the limit within a different 12 month period and can/should have another 14.5 month to make up for it. The pattern repeats itself... The overall point is that this would be a very stupid way to express a limit and it is far from logical to interpret it that way.
- slashnull 12y agoThat's bizarre, why would they fill a petition instead of litigating?
- Systemic33 12y agoI have no words for how absurd this is. What happened to free market economy? How are americans totally fine with a company being denied its ability to sell its product to its end users? And it's probably the exact same people later chanting that Europe is communist...
- lupin_sansei 12y agoMilton Friedman's quote is apt here: "With some notable exceptions, businessmen favor free enterprise in general but are opposed to it when it comes to themselves."
- Perceval 12y agoAdam Smith too: "Their [those who live by profit] superiority over the country gentleman is, not so much in their knowledge of the public interest, as in their having a better knowledge of their own interest than he has of his. It is by this superior knowledge of their own interest that they have frequently imposed upon his generosity, and persuaded him to give up both his own interest and that of the public, from a very simple but honest conviction, that their interest, and not his, was the interest of the public. The interest of the dealers, however, in any particular branch of trade or manufactures, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always in the interest of the dealers... "The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order or men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it." Adam Smith, The Wealth of Nations, Chap. XI, Part III, "Rent of Land: Conclusion".
- baddox 12y agoIt has little to do with logic, ideologies, or specific political or ethical beliefs. It's just really basic economics. Concentrated interests beat dispersed interests.
- beedogs 12y ago1914 headline: Georgia stagecoach dealers want Ford factory shuttered for selling too many automobiles
- captainmuon 12y agoI wonder if Tesla could somehow circumvent these laws. Open a fake mailbox company in another state. Sell them the cars at production cost, and let that company "import" them. Actually open a dealership (using another company). This probably won't work, as there might be a lot of red tape involved. Possibly there is a limited number of concessions, or some other hurdle, otherwise they would have done that. Using middlemen, put Teslas on eBay, Craigslist, etc.. Make it somebody else's problem to deal with. My favorite: Don't sell cars at first. Just do car shows, Tesla parades, Nikola Tesla tribute parties, and so on. Visit schools and communities and tell people how good electric cars can be for the environment. Partner with schools and driving instructors to get kids to learn driving in Teslas. Get as many people as possible to test-drive one. That's the most important thing. Then just happen to have a iPad around so people can order one :-). There might be a law preventing them from even selling them over the internet into many states - I don't know if the laws only apply to physical stores or not - but in this case they could fall back to relying on the black market. At least for a while, while they get the legislation sorted out. Last but not least (and only half seriously) try to frame the current laws as "communist". I picture an ad with thin, sad people in fur hats, waiting in a long line for their car, with hammer-and-sickle ration coupons in their hands. Contrast it with happy free people riding around in their Teslas under the Californian sun. Unfortunately, that might even work.
- MichaelGG 12y agoTesla already does such things. In many places, they don't "sell" cars. They talk about them, then let you go buy them yourself, perhaps on a computer they happen to have setup right there in the "store". In Denver's Park Meadows mall, on Sunday they have a big sign saying the State of Colorado prohibits them from "selling", so come on in and sell it to yourself.
- johnward 12y agoI wasn't even sure you could actually buy through a Tesla store. I think they just direct you to the website. I took a test drive of a Model S P85 this weekend and they didn't even discuss the sale just wanted to know what I though overall. Then today someone contacted me about purchasing. I can't afford a Model S anyway but I am not very interested in used Model S lease returns or the Model 3.
- sidcool 12y agoFree market capitalism is only good as long as it serves your interests.
- possibilistic 12y agoElectric vehicles are huge here in Georgia. We have state tax breaks on the purchase of EVs that make the vehicles effectively free [1] for many commuters. Anecdotally, one of my coworkers just bought a leaf because of the tax credit. Guess who wants to stop the state EV tax credit bill? Shouldn't come as a surprise that it's the same dealer lobby [2] mentioned in the Tesla article. 1. http://cleantechnica.com/2014/02/13/1-nissan-leaf-market-atlanta-city-risk-losing-secret-sauce/ http://cleantechnica.com/2014/02/13/1-nissan-leaf-market-atl... 2. http://m.bizjournals.com/atlanta/blog/atlantech/2014/02/bill-threatens-to-unplug-gas-5k.html?page=all&r=full http://m.bizjournals.com/atlanta/blog/atlantech/2014/02/bill...
- ctdonath 12y agoI'm one of those anecdotes. Between tax credit and gas savings it's free for a 2 year lease (tech is changing enough you don't want to keep one longer than that; expect a glut of used LEAFs in a couple years). You need some cash flow to make it happen, but net cost is $0.
- Georgiabray 12y agowhat Lillian said I'm impressed that someone can profit $9519 in 4 weeks on the internet. more tips here------->>> http://www.jobsfish.com http://www.jobsfish.com
- pizu 12y agoHow about delivering Tesla cars straight to customer's doors? Amazon-shipping style.
- nnnnni 12y agoImagine the size of that drone! =-)
- dm2 12y agoDrones are just helicopters or planes without pilots. There is nothing requiring them to have multiple rotors or look like a quadrocopter. Here is the existing unmanned heavy-lifter. http://en.wikipedia.org/wiki/Kaman_K-MAX#Unmanned_remote_control_version http://en.wikipedia.org/wiki/Kaman_K-MAX#Unmanned_remote_con... Can carry 6,000 lbs and the cost of $1,000 per flight hour total isn't a terrible price, it's far more expensive than just putting the vehicle on a truck for delivery of course. http://www.lockheedmartin.com/us/products/kmax.html http://www.lockheedmartin.com/us/products/kmax.html https://www.youtube.com/watch?v=ukogay1TwAA https://www.youtube.com/watch?v=ukogay1TwAA https://www.youtube.com/watch?v=5qqUdfSRFXw https://www.youtube.com/watch?v=5qqUdfSRFXw The way those rotors cross are insane. The BlackHawk unmanned system has been in testing for several years also.
- nnnnni 12y agoOh, I didn't say/mean that it had to be a quadrocopter/multi-rotor vehicle... I was just saying that it'd be a pretty large vehicle. While it's a cool idea, I suspect that a lot of people would be very wary of something of that size flying around their house/building without a human pilot onboard. It's basically the "not in my backyard" syndrome.
- jcromartie 12y agoSome rental car companies do this already. I'd imagine Tesla has even more incentive to do this.
- tzaman 12y agohttps://www.youtube.com/watch?v=86pcTLJTvUw https://www.youtube.com/watch?v=86pcTLJTvUw I think the comments below the video are pretty expressive how the consumers feel about the topic. Never seen a video that has this much downvotes (compared to upvotes) on YT.
- Shivetya 12y agoWell I will give my state this, we are one of the more friendly states towards electric cars. You can spot a Nissan Leaf about anywhere you go and seeing a Tesla, or even one of two Fiskers still about isn't a surprise. The simple matter here is, Tesla needed to sell cars before the law could accommodate a manufacturer direct sales model. Hence an exemption was carved out, likely at the behest of someone influential, so they could. Georgia automobile dealerships have way too much power in our state. They were able to shove through without opposition in the legislature a rewrite of taxation on automobile sales. They wanted all used car sales business to themselves and they nearly got it. Now even private party sales of used vehicles are subject to a tax of close to seven percent. Hence, you buy a car from your friend and go to get a tag, you pay that tax based on the assessed value of your car, not what you bought it for. This value is usually lower than trade in value to a dealer, but figure the shock when you buy a 20k car and you need to fork out 1400 for tags. I am very sure this situation will get fixed quickly. The state wants to appear friendly to tech and manufacturing. Auto dealers, liquor, and cigarettes, are probably the most protected in Georgia but politicians bow to pressure in election cycles to the populace here. note, the real fear is not Tesla, its that other manufacturers will get to setup stores too.
- alphydan 12y ago> 20k car and you need to fork out 1400 for tags. If that shocks you, you've never been to Denmark where you pay $36k in tax on top of the $20k for the car [0]. [0] http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-is-rather.html http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-...
- jacquesm 12y agoGP meant a second hand sale, not a new car and associated taxes.
- GFischer 12y agoYou think that's a lot of taxes? You haven't been to Uruguay, we have more than 200% taxes. Example: Citroen DS4 in Denmark, 274.000 kr (U$ 39.000) Citroen DS4 in Uruguay, U$ 49.000 Supposedly Malasya is the 2nd most expensive country to buy cars in the world, and the Citroen DS4 is priced at RM 149,888 - U$ 47.000 (still less than in Uruguay) and in Norway, the most expensive in Europe, it costs kr 283,900 (U$ 45900). I think the only place more expensive than Uruguay is Singapore. Sources: http://autobuzz.my/2014/06/citroen-ds4-1-6-turbo-a-dashing-french-crossover-with-a-different-spirit-video/ http://autobuzz.my/2014/06/citroen-ds4-1-6-turbo-a-dashing-f... http://www.citroen.no/Resources/Content/NO/PRISLISTER/Prisliste_DS4.pdf http://www.citroen.no/Resources/Content/NO/PRISLISTER/Prisli...
- netcan 12y agoI have a feeling the US auto retailing comples will become a canonical example of various concepts for Econ textbooks for a long time. Austrian creative destruction, regulatory capture. I also think there might be room for new concepts such as regulatory accumulation and you could find some good examples of this here too. For anyone who knows the ins and outs of the system.. What prevents a dealership from setting up a base in an unregulated state and selling new cars directly to consumers everywhere in The States using fixed pricing. No showroom, test drive or salesman costs. Just a website with a price and trucks that deliver the cars. Is there no usage loophole created by interstate commerce? Aren't all these laws local?
- mendort 12y agoYou can buy cars online in the US. And Tesla does sell its cars that way. This is about whether Tesla is allowed to run Brick and Mortar stores in various places in the US.
- Yardlink 12y agoNobody seems to care about these laws until some high-profile company starts breaking them. 10 years ago where was the outrage that GM wasn't allowed to sell SUVs directly to customers? Where was the outrage that ordinary people (ie creeps) weren't allowed to put a "taxi" sign on their car and start picking up strangers at night for money?
- cpwright 12y agoGM, Ford, Chrysler, Toyota, Honda, Nissan, et. al. have already accepted an up-front fee in exchange for franchise agreements; so the franchise laws in that case protect the initial investment of a franchisee. There actually was some debate over selectively cancelling franchise contracts during the GM and Chrysler bankruptcies.
- icebraining 12y agoPeople have always complained about the taxi regulations. Articles in major newspapers, reports by the Federal Trade Commission arguing for the elimination of the most important regulations (such as the medallions system), a lawsuit from the Institute for Justice against the Denver Taxi Commission, etc. But to get most people to care, you need to show them the alternative. Economic theory, valid or not, doesn't breed outrage.
- mikeash 12y agoYou're basically saying that nobody cares about these laws until they have an obvious negative impact. Why would you expect anything else?
- andmarios 12y agoBeware though kids, the reason you don't have start-ups in your country is because you ask uber to follow your laws.
- thathonkey 12y agoOops accidentally clicked into the comments of an HN post regarding economics. Nothing of value here.
- krschultz 12y agoKeep in mind that for the dealers, this is a life or death existential fight. If Tesla wins, the other car manufacturers aren't far behind. For Tesla, it's not significantly more important to their success than overcoming general disinterest in electric cars, figuring out how to manufacture batteries for less money, or any of its other business challenges.
- psaintla 12y agoExactly, which is why I never understood why people demonize these car dealerships, yes they are an unnecessary middle man, yes they are annoying to deal with but they are only doing what is logical.
- Zikes 12y agoPayday lenders' circumvention and bending of laws to continue their own existence are equally logical.
- psaintla 12y agoYes, and you shouldn't be angry at them. You should be angry at the people who allow laws to be passed in their favor.
- ceejayoz 12y agoIt's entirely possible and legitimate to be angry at both.
- psaintla 12y agoI don't see the point, you only have control over one of those groups.
- Zikes 12y agoSometimes all you can do is treat the symptoms until a disease has run its course. Government corruption is not going to disappear any time soon, but we can still work to mitigate its effects in some areas.
- ams6110 12y agoI don't agree with enforcing these laws on Tesla. Tesla has never had a dealer network which might need or want protection from a manufacturer undercutting them in a market they worked hard to develop (this is why these laws exist). Yet at the moment I don't think this really hurts them. If anything its giving them a ton of free advertising and building consumer goodwill. Tesla is a high-line brand. A status symbol. They are not impulse purchases in the way that mainline Fords, Chevys, Toyotas are (i.e. people buying because they need a car, any car, and they liked the color, etc). If you want a Tesla, you know that going in. You aren't going to buy a Leaf or a Volt instead because you think it looks pretty. You don't really even need to see one in a dealer showroom, and for what they cost, traveling a few hours to buy one is not a huge hurdle. Where I live, if I want to buy a new Porsche, a Ferrari, a Maserati, etc. I would have to travel several hours to the nearest city with a dealer.
- Fuzzwah 12y agoYour point is valid for the current Tesla model line up. When they finally get down to their "affordable" model then these problems will have a clear effect.
- sylvinus 12y ago> How many of you would be willing to travel four hours each way just to look at one car? When Tesla faces a ban in a state, they convert their stores to showrooms so people would still be able to see the cars.
- 51Cards 12y agoWhat about setting up show-rooms everywhere so people can see the product, but only sell online? Would that get around all these local dealership laws?
- rdudek 12y agoHere is one thing I just don't understand about these laws. I know they're setup to protect dealerships, but can't Elon Musk spin off a side company that is basically a car dealership company only?
- tedunangst 12y agoUsually the law requires two things. Separate ownership: musk couldn't own both. Open access: anyone must be allowed to open a tesla dealership.
- EGreg 12y agoSo the other Tesla dealerships would have to make minimal profit same as Musk's dealership. How is this different than Dell disrupting PC sales 20 years ago?
- goatforce5 12y agoThe difference is there weren't a bunch of laws in place to protect PC dealers.
- tedunangst 12y agoOther way around. Right now, every tesla sold sells for MSRP. If independent dealerships could purchase at wholesale prices, they'd be able to undercut tesla by selling for less than MSRP.
- ceejayoz 12y agoThey could presumably enforce on a franchise level salaries instead of commission and fixed pricing, though. That'd address most of the problems in dealerships.
- frogpelt 12y agoThe hard part is convincing people to sell Teslas with those types of restrictions. I'm guessing Tesla wouldn't be near as successful without the direct-to-consumer model.
- programminggeek 12y agoThe irony of a "free market economy" is that businesses are free to lobby the government to get favorable rules and in large part they win. So, a successful business will eventually create enough red tape that they rig the game so that only they or other companies with enough money can compete.
- cyanbane 12y agoCar dealerships and the three tier alcohol system seem so archaic and anti-consumer, both amaze me in their longevity and the amount of money that must be getting put into them to retain the hold.
- pessimizer 12y agoThey should just sell through an app, Uber-style. Then no local laws would apply to them because internet. Rename the store the "showroom" and the dealers into "comfort consultants."
- tsbardella2 12y agorich people fightin about rich people stupid stuff
- waterfowl 12y agoI just wish you could option out a car online and click and pay by card(or bank transfer for financing etc) like you do with a computer. Ideally deliver it to your house, but picking it up at a port or a freight rail place or something is also a palatable option. The notion that if I want car x, in color y, with trim z, I have to shop around and "find one that exists in those options" is not something that should be on me as a consumer. I'm sure dealerships will custom order a car for you, but that sounds like a pain in the ass and I'm sure they charge you more for the privilege of buying the 20-50k product you actually want.
- gknoy 12y agoI've heard that they'll often do it if you phrase it as "Best price on X gets the deal".
- zippergz 12y agoI have custom ordered a car through a dealership (not a Tesla). I'm pretty sure any dealership will do it. It's pretty standard. And they didn't charge me any more than I would have paid for something off the lot (I was able to negotiate the price the same way). However, it is definitely a pain. I had to wait months and months for the car to show up. I'm not sure if there's a good way around that, but ever since then, I've been much more inclined to just buy whatever is available that's closest to what I want, even if it's not exactly right. I do wish there were a better solution for this.
- sliverstorm 12y agoHowever, it is definitely a pain. I had to wait months and months for the car to show up. I'm not sure if there's a good way around that What, are you saying I won't be able to upgrade to one-day shipping for $2.99?
- toomuchtodo 12y agoYou okay getting a Versa? http://www.amazon.com/gp/feature.html?docId=1001359341 http://www.amazon.com/gp/feature.html?docId=1001359341 http://autoweek.com/article/car-news/buy-nissan-versa-note-through-amazon-sort http://autoweek.com/article/car-news/buy-nissan-versa-note-t...
- mariuolo 12y agoI thought it was the land of capitalism...
- shrnky 12y ago<trolling>How is this any different than unions or other stupid government regulations?</trolling>
- chrismcb 12y agoWhat is the actual law that tesla is supposedly violating?