Ruckus Over Tesla Sales Model

[Noah930]

Tesla is the one car manufacturer that sells direct to the public from the factory. Why do all the other car manufacturers and their dealerships have a problem with that? (OK, I get that--dealerships feel unfair advantage, blah blah blah.) But how did we get into this industry model where cars are exclusively sold to the public through a dealership network? What's the history on this? Other than upsetting the status quo, what's wrong with Tesla wanting to sell their products directly to the consumer?

[theFONZ]

Isn't that how it is with most manufactured goods? Not many manufactures sell direct to consumers, and if they do it's at the same or higher price as the distributors.

I don't see a problem with Tesla doing business how they want. Right now they are small enough that it might work for them.

[intakexhaust]

Believe or not this goes waaaay back and some b.s. law designed by the NADA and gubmit cronies. Oh and its been that way to protect the consumers.... hmmm.

As for Tesla and this issue, there's more about it on the other Tesla thread.

[Head416]

If the factory wants to sell direct to their customers, why is that up to anybody but the factory and the customers? Such BS.

[RWebb]

it is called "capture" - or crony capitalism

in this case, dealers got real friendly with the NJ legislature decades ago and got them to pass a law prohibiting direct sales

if you think that's bad, start digging into real estate law...


NY cities on the NJ border may benefit tho

[David]

Sorry to go PARF on this, but I think it's comical that it’s mainly supposedly pro-business GOP governored states that oppose the direct sales.

[Jim Richards]

Originally Posted by David

Sorry to go PARF on this, but I think it's comical that it’s mainly supposedly pro-business GOP governored states that oppose the direct sales.

Tesla is a business.

I guess those states' politicians are only pro- the businesses that line their pockets.

[Porsche-O-Phile]

Stupid. The more layers of do-nothing middlemen sales schlubs that can be cut out of any transaction process the better. Total non-value-add - needs to go away. Good for Tesla. Smart model.

[onewhippedpuppy]

Originally Posted by Head416

If the factory wants to sell direct to their customers, why is that up to anybody but the factory and the customers? Such BS.

Originally Posted by Porsche-O-Phile

Stupid. The more layers of do-nothing middlemen sales schlubs that can be cut out of any transaction process the better. Total non-value-add - needs to go away. Good for Tesla. Smart model.

Yup. As usual, if you get the government involved it's normally worse for the consumer. Car dealerships provide me with no value whatsoever, and I would love the opportunity to simply spec out a car online and have it arrive at my door. It's an outdated sales model, and while I have no interest in a Tesla I love the fact that they are bucking the system.

[island911]

Yep.
State of WA is having cognitive dissonance over this. On one hand, the state requires dealerships (Tesla has none) to help 'spread the wealth.

OTOH, The State love to feel green, to the tune of waiving the sales tax on the cars. (~$10k per sale ...and 2nd in sales to only CA).

Interesting times.

[widebody911]

Consumer Advocates Support Tesla Direct Sales in Dispute - Bloomberg

Elon Musk's letter to New Jersey: Auto dealers are a road to failure - Fortune Tech

[island911]

The political-deck is MASSIVELY stacked in favor of Tesla. --Massive Tax credits, pay no gas tax, got cheap fed loans, circumvent dealership model other mfgs must adhere to...

...but how long can that last? (before the politicians want their vig)

Perhaps Tesla is smart to never turn a profit.

hmmm... They could restructure as a non-profit (wink wink) and keep the pity ruse going forever.

[fastfredracing]

Just thinking out loud here, what do I do when my six month old Tesla needs warranty service, but the factory who sold me the car is on the west coast. They will have to have some sort of approved service facilities convenient to customers.
Otherwise, I think it is a great idea.

[island911]

Originally Posted by David

Sorry to go PARF on this, but I think it's comical that it’s mainly supposedly pro-business GOP governored states that oppose the direct sales.

I don't see pointing to politics as a problem. I will however point-out that people don't care for the ideology-driven misinformation you've provided there.

Again, this issue has been front and center here in the VERY Liberal/Dem State of WA. So, please, don't go focusing on NJ just because they have a so-called Rep Gov. -that's simply petty.

There is no doubt that Tesla is shining a spot-light on this dealership issue. Likely to good end for the consumers. This conservative welcomes that.

[cairns]

Sorry to go PARF on this, but I think it's comical that it’s mainly supposedly pro-business GOP governored states that oppose the direct sales.

NADA is an equal opportunity giver (check open secrets.org) and NJ has been ruled by Democrats for decades. Their electoral votes have gone Democrat since the early 90s (twice to Obama) and Christie was preceded by four Democratic governors.

Democrats in NJ wrote the law; Republicans didn't.

Although I agree the law is stupid politicians on both side of the aisle serve the interests that pay them.

[David]

Originally Posted by island911

I don't see pointing to politics as a problem. I will however point-out that people don't care for the ideology-driven misinformation you've provided there.

Again, this issue has been front and center here in the VERY Liberal/Dem State of WA. So, please, don't go focusing on NJ just because they have a so-called Rep Gov. -that's simply petty.

There is no doubt that Tesla is shining a spot-light on this dealership issue. Likely to good end for the consumers. This conservative welcomes that.

I didn't just mean NJ since Texas has the same laws preventing Teslas from being sold here (you do see them all over Houston tho.) I did write "mainly" since it's not just a GOP issue.

[island911]

gotcha. 2 states of 50.

The big battle, for Musk, was in WA. --those things are all over here. Anyway, Musk won a Special exemption for Tesla. Future Rivals screwed

Originally Posted by Noah930

Tesla is the one car manufacturer that sells direct to the public from the factory. Why do all the other car manufacturers and their dealerships have a problem with that? (OK, I get that--dealerships feel unfair advantage, blah blah blah.) But how did we get into this industry model where cars are exclusively sold to the public through a dealership network? What's the history on this? Other than upsetting the status quo, what's wrong with Tesla wanting to sell their products directly to the consumer?

iirc, The history is centered about 'big business' controlling too much. In the past private local dealerships selling say, GM's would often be undercut (at critical times) by a GM-owned dealership in the same region. So States decided that, in effort to stick it to the big car companies, they would disallow dealerships to be owned by the big evil parent corporation (which are evil ... unless it's something neo-hippies want)

[berettafan]

Originally Posted by island911

There is no doubt that Tesla is shining a spot-light on this dealership issue. Likely to good end for the consumers. This conservative welcomes that.

Comical to say the least. The following is apparently a slanted source but facts are facts. Tesla is skipping the process of convincing consumers to buy it's cars and going straight to convincing the fed that consumers should want to buy its cars.

How Tesla Motors Really Makes Money… From Taxpayers | FrontPage Magazine

[Noah930]

Originally Posted by fastfredracing

Just thinking out loud here, what do I do when my six month old Tesla needs warranty service, but the factory who sold me the car is on the west coast. They will have to have some sort of approved service facilities convenient to customers.
Otherwise, I think it is a great idea.

The factory may be out on the West Coast, but you'll have a dealership/Tesla store closer. You could take the car there. And Tesla has some sort of service package that an owner can purchase, which includes technicians coming out to your house if you're not near a Tesla store. So there must be a way that for warranty work (even if you didn't purchase that plan), technicians could come to your place (or pick up your car) for the repairs. And a lot of the car is run by software, after all. Tesla can do a lot to/for your car remotely.

[berettafan]

And we'll all have free health care and our kids will be the smartest on the planet and everything will be just perfect.

Meanwhile in the real world......