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Transportation Politics

How Car Dealership Lobbyists Successfully Banned Tesla Motors From Texas 688

Posted by Soulskill
from the don't-mess-with-texas-unless-you-can-float-some-benjamins dept.
Funksaw writes "In a political op-ed on his blog, long time Slashdot reader and contributor Brian Boyko (the guy who did that animated Windows 8 video) — now a candidate for state representative — explains how lobbyists from car dealerships successfully banned Tesla Motors from selling cars in Texas. From the article: 'Tesla Motors doesn't just present a case study of why a lack of campaign finance reform blocks meaningful reform on the issues that Democrats care about, like climate change and health care. A lack of campaign finance reform blocks reforms on both the Left and the Right. Here's the big elephant in the room I'd like to point out to all the "elephants" in the room: With a Republican-controlled legislature, a Republican executive, and many conservatives in our judiciary, why the hell don't we have free markets in Texas? Isn't it the very core of economic-conservative theory that the invisible hand of the free market determines who gets what resources? Doesn't the free market have the ability to direct resources to where they can most efficiently be used? I'm not saying the conservatives are right in these assumptions; but I am saying that our broken campaign finance system makes a mockery of them.'"
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How Car Dealership Lobbyists Successfully Banned Tesla Motors From Texas

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  • Free Market? LoL (Score:5, Insightful)

    by meerling (1487879) on Tuesday September 10, 2013 @03:15PM (#44812079)
    They don't want a Free Market, they want a Free For Them Market, screw everyone else.

    Also, with how I saw Red McCombs screwing around San Antonio while I lived in Texas, it doesn't surprise me one bit.
    • by Daniel Dvorkin (106857) on Tuesday September 10, 2013 @03:19PM (#44812131) Homepage Journal

      Yep. Anyone can describe a utopian economic system ("Under communism, everyone will work together for the common good!" "Under capitalism, competition and individual choice will lead to the greatest possible efficiency!") but in the real world, they all tend toward cronyism and corruption. Every single time.

      • by MightyMartian (840721) on Tuesday September 10, 2013 @03:43PM (#44812523) Journal

        I want to be a corrupt crony, you insensitive clod!

      • by TeknoHog (164938) on Tuesday September 10, 2013 @04:19PM (#44812949) Homepage Journal
        Under capitalism, man exploits man. Under communism, it's the other way around.
      • Holy Fuck People! (Score:5, Insightful)

        by sycodon (149926) on Tuesday September 10, 2013 @04:22PM (#44812993)

        OK, RTFA.

        EXISTING laws proscribe direct sale to the consumers. Argue if you want about how those laws cam into existence, but they are in fact, the law and predate Tesla.

        Tesla wanted the laws changed. So they were actually the ones lobbying for a special exemption.

        Texas didn't ban Tesla cars, they didn't change the existing laws to accommodate Tesla's sales model. You can argue about that being smart or not, but Telas's cars are NOT banned.

        • by Anonymous Coward on Tuesday September 10, 2013 @04:44PM (#44813259)

          Correct! Tesla cars are not banned in Texas. There is one driving around my neighborhood. Yes, I live in Texas.

          That said, this is par for Texas politics. I, along with most people I know here, see Tesla and their need for direct sales as a legitimate argument. EV's are not widely available like regular vehicles are, so we need to have a test bed to see how introduction that into the marketplace works. Tesla is that test bed.

          Really, this is about stagnant Republican cronyism that keeps Texas from progressing in areas of economic opportunity. There is a LOAD of oil money flowing in Texas right now, and Texas politicians, apparently here anyways, seem to hate upcoming markets. Ironically, that same oil money elected thes idiots blocking this.

          I'll take a guess and say the right people were not influenced enough for this to pass. In short, they didn't pay enough, or the right people to get this changed.

        • by fermion (181285)
          I will also say right now I don't see why Tesla does not work with existing high end dealers in Texas. There are several that are extremely reputable that work with a number of high end cars(lotus, maybach) and are specifically able to deal with the clientele that Tesla wants. Recall that the original gliders were supplied by Lotus.

          This is really just a fluke of history, like in some states you can't buy alcohol except from the state. I think, even though I agree that in the long run Tesla should be ab

          • by smack.addict (116174) on Tuesday September 10, 2013 @05:12PM (#44813645)

            Tesla doesn't want these buffoons selling Teslas because dealers don't really want to say them.

            Sure, they'll pay lip service to the idea. But the problem is that Tesla's have very few moving parts. There's no money to be made off of Tesla services. And that's where these guys make their money. So they will use Tesla's to draw people in, but they'll sell something else.

            By the way, who cares why? What if it is just because Elon hates TADA? In a free market, he should be able to sell direct if he wants.

            • by fermion (181285)
              I don't know if you read this correctly. I am not talking about buffoons selling the Tesla. I am talking about extremely high end firms who can connect to base that will buy a Tesla. Someone comes into to buy a Mercedes, see a Tesla, and maybe buys it. I have seen this happen. Or maybe when the used market comes up, this provides a trusted venue to buy them. This type of thing happened to me when I was looking for car. Thought I was going to buy one thing, ended up buying a Volvo, though never thought
          • Re:Holy Fuck People! (Score:5, Informative)

            by lgw (121541) on Tuesday September 10, 2013 @07:11PM (#44814743) Journal

            I will also say right now I don't see why Tesla does not work with existing high end dealers in Texas. There are several that are extremely reputable that work with a number of high end cars(lotus, maybach) and are specifically able to deal with the clientele that Tesla wants. Recall that the original gliders were supplied by Lotus.

            Lotus had to stop selling cars in the US for the most part for about a year IIRC (I guess they're back now). Maybach is dead. That's probably just it: this is not the model Tesla wants.

            It's an incredible amount of work to create a dealership program (you have to invent training programs and survey programs and police the heck out of the dealerships, but in terms of customer experience and financial auditing). Tesla is selling cars as fast as they can build them as is.

            The Texas government has reversed in the past on car-related regulations that pissed people off - it's fairly responsive to the people when it comes to that. If people want Teslas, the government will act. It will actually be pretty interesting to watch this play out.

          • by mattack2 (1165421) on Tuesday September 10, 2013 @07:46PM (#44815005)

            I will also say right now I don't see why Tesla does not work with existing high end dealers in Texas.

            Because Teslas would cost even more than they already do?

    • by durrr (1316311) on Tuesday September 10, 2013 @03:41PM (#44812499)

      The invisible hand of the market determines who gets what resource by slipping fat checks into the right persons pockets.

    • by Above (100351) on Tuesday September 10, 2013 @04:06PM (#44812809)

      I can imagine someone arguing this is the free market working. Lobbying and representation is a product, and those with the most money are purchasing it.

    • by cusco (717999)
      the invisible hand of the free market determines who gets what resources? Doesn't the free market have the ability to direct resources to where they can most efficiently be used? I'm not saying the conservatives are right in these assumptions; but I am saying that our broken campaign finance system makes a mockery of them.

      Good. They deserve to be mocked.
  • Wrong party (Score:5, Insightful)

    by Libertarian_Geek (691416) on Tuesday September 10, 2013 @03:21PM (#44812147)
    Republicans don't want free-market.
    Democrats don't want free-market.
    They both want different lobbys to pay them (in campaign donations) for the "privilege" of not being encumbered by regulations of the other party.

    Libertarians (both big "L" and little "l") generally want free-markets.
    • Re:Wrong party (Score:5, Insightful)

      by dkleinsc (563838) on Tuesday September 10, 2013 @03:59PM (#44812721) Homepage

      There ain't no such thing as a free market.

      Either there's government enforcing at least basic rules about how the market operates (e.g. no "offers you can't refuse"), or there's non-market influences on the decisions of actors in that market (e.g. "I'm bleeding to death, it doesn't matter that the hospital in the next town offers cheaper service").

      What Libertarians tend to actually want is the ability for the more powerful private actor to take advantage of the less powerful private actor with impunity. The more powerful private actor has a key advantage: They have a better ability to research and organize alternative transactions. That allows them to control the pricing in a way that the less powerful actor cannot.

      For a concrete example, consider farmer Bob deciding whether to sell his corn to Archer Daniels Midland for $4.75 per bushel. Look at his options:
      - Sell at the offered price.
      - Not sell at all. That will probably cause him to lose his farm, because without this sale, he doesn't pay off the bank.
      - Try to sell to someone else. But since there's no one besides ADM who buys corn in his area, the only way Bob could pull this off is to invent his own transport and distribution network, from scratch.
      So what you have is not a free market, but a ADM-controlled market that is only free to ADM.

    • Re:Wrong party (Score:5, Insightful)

      by MarkvW (1037596) on Tuesday September 10, 2013 @04:10PM (#44812869)

      The "Free Market" in Action
      (1) Free Market
      (2) Monopolies
      (3) Consolidation
      (4) Business Oligarchy
      (5) Political Oligarchy
      (6) Collapse
      GOTO (1)

  • by roc97007 (608802) on Tuesday September 10, 2013 @03:21PM (#44812149) Journal

    ...is that there's a difference between "Republicans" and "Conservatives".

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      Anytime you put a label on a group, you've lost. Politicians have been developing ways to twist into or out of various labels for millennia. You want an actual debate, talk about the issues, with real data, and ban all labels.

      It's how I would say that I used to share an office with Nate, and he liked to ski and drive fast cars, not that I used to share an office with that liberal white guy. In one description, I mentioned some information about him. In the other, I mentioned some labels that will make h

  • by Anonymous Coward on Tuesday September 10, 2013 @03:22PM (#44812173)

    The free market here is in politicians, not autos.

  • Conservatives? (Score:5, Insightful)

    by intermodal (534361) on Tuesday September 10, 2013 @03:22PM (#44812179) Homepage Journal

    I think it's cute that the synopsis above thinks Texas has a lot of conservatives in its government. Republicans != conservatives, at least not universially.

  • by Animats (122034) on Tuesday September 10, 2013 @03:22PM (#44812183) Homepage

    Texas is trying to convince Space-X to build a launch facility near Brownsville, TX. [facebook.com] Someone may have forgotten that Elon Musk runs both Space-X and Tesla.

  • Not a new law... (Score:5, Insightful)

    by Anonymous Coward on Tuesday September 10, 2013 @03:28PM (#44812291)

    It wasn't a new law that kept Tesla out of Texas. The law that car makers couldn't sell direct to consumers in the state has been there for years. Tesla can sell all the cars he wants in Texas. He just has to get someone to open dealerships just like GM, Ford, Toyota and all the others.

  • by Karmashock (2415832) on Tuesday September 10, 2013 @03:30PM (#44812313)

    They're not saying that Tesla can't sell their cars in Texas. They're saying that Tesla can't deal them without using a third party dealership.

    Its one of the old monopoly laws. Another one would be movie theaters. They used to be owned almost entirely by movie studios. That is, universal, etc would literally own the theater. They broke up most of those relationships and now you have to have separate corporations for many of these things.

    Tesla could probably sell their cars just fine if they contracted with the local dealerships. Why they don't... I do not know.

    Regardless, I agree that companies should be able to sell their products directly. After all, doesn't Apple have Apple stores that sell apple laptops directly? And then there are all the direct internet retailers. I can buy a computer direct from dell or a pair of socks direct from the gap. And the gap "makes" those socks. They're "gap" socks.

    So I agree, the law is dumb. But it is actually very easy to get around it by just dealing with the dealerships instead of setting up your own.

    AGAIN... I agree... it s dumb. But its manageable.

    • Re:Read the article (Score:5, Interesting)

      by Anonymous Coward on Tuesday September 10, 2013 @03:38PM (#44812449)

      In Tesla's defense, would you willingly let your wares be sold by dealerships that are out to make the most money possible from the customers often with dishonest tactics? Car sales people are among the most despised, least trusted people on the planet. I don't think there are any auto manufacturers that wouldn't kick independent dealerships to the curb if they could.

    • by compro01 (777531) on Tuesday September 10, 2013 @03:43PM (#44812525)

      Tesla could probably sell their cars just fine if they contracted with the local dealerships. Why they don't... I do not know.

      $$$$$$$

      Dealerships don't work for free. They would either need to add at least $3k to the price of a bottom-end Model S or Tesla would have to eat that cost.

      Also, I wouldn't rule out the dealers saying no to electrics on the basis of the lack of maintenance revenue. The stealerships wouldn't be able to charge Tesla drivers obscene rates for oil changes and such.

      • by pesho (843750) on Tuesday September 10, 2013 @05:21PM (#44813769)

        The stealerships wouldn't be able to charge Tesla drivers obscene rates for oil changes and such.

        But sir you batteries will need to be waxed every three months or every 3000 miles, otherwise they will no longer hold charge you warranty will be voided. That's unless you opt for our extended service warranty which comes with free battery waxing and electricity flush ( a small monthly payment applies, but will tuck it in your financing and you will never notice it). We do recommend flushing the electricity of your car at least once every six moths. Stale electricity can get dirty and clog he coils of your electric motor.

    • Yes, it is manageable, but the irony is that the current system that requires dealerships to sell cars in an attempt to keep costs down by preventing monopoly abuse of car manufacturers would actually cause the price of Tesla cars to go up. That, of course, is because the dealership is a middleman that is out to make as much profit as possible by jacking up the price of the cars. In addition to that, I'm sure Tesla would love to drastically improving the purchasing experience by selling their cars directl
  • by james_shoemaker (12459) on Tuesday September 10, 2013 @03:30PM (#44812321)

    I read the laws tesla is lobbying for on their website, it's a rather specific exemption from the dealership law for basically them:

    "a manufacturer of only all electric-powered or all battery-powered motor vehicles, or a distributor of only all electric-powered or all battery-powered motor vehicles, that (i) owned and operated a new motor vehicle dealership in the United States on or before March 1, 2013, and (ii) has never sold its line make in the United States through an independent franchised new motor vehicle dealership, may own or operate a dealer or dealership, or act in the capacity of a dealer, at any location within the state and may obtain a dealer general distinguishing number under Section 503.029 of the Transportation Code."

          "let's write ourselves an exemption, but slam the door on anyone coming after us"

    • That's not what they were doing.

      They knew there was no way in hell they would get a blanket exemption or get the law repealed (Tesla's preference). So, they tried to craft the most palatable thing that could be passable.

  • Austin showroom (Score:5, Interesting)

    by 605dave (722736) on Tuesday September 10, 2013 @03:31PM (#44812347) Homepage

    Tesla is not banned from Texas, they are banned from having dealerships. I just test drove (and will probably buy) the Tesla sedan last Friday here through the Tesla showroom at the Domain in Austin. I now have to simply go online and order one, and it will be delivered right here to Austin, Texas. In addition Tesla has an agreement with a local repair shop for any servicing, and they are building a charging infrastructure here in the state. So you can't say they've been banned, only that they have been prevented from having a tradition all in one place solution.

    And I find it so amazingly ironic that all of the Republicans in this state who pontificate about the free market and demonize regulation would fight to keep the dealership system. It is exactly the kind of regulation they usually abhor, and prevents the capitalist system from working. The hypocrisy is unfortunately sadly predictable for those on the right in Texas. This is the same group that has passed a voter ID law to suppress the voting rights of the disadvantaged, even though in the last ten years there have only been 4 cases of voting fraud that could have been stopped with the ID law.

  • by dhalsim2 (626618) on Tuesday September 10, 2013 @03:31PM (#44812355)

    This isn't a Republican vs Democrat thing, but it _is_ very political. Planet Money had an explanation of the economics of car dealerships and how dealerships and politicians prevent sales directly to consumers.

    http://www.npr.org/blogs/money/2013/02/19/172402376/why-buying-a-car-never-changes [npr.org]

  • by hsmith (818216) on Tuesday September 10, 2013 @03:34PM (#44812391)
    All of that regulation is for sale. The more power the govt has, the more it will be up on the auction block to the highest bidder. A more powerful govt is the last thing anyone should want.
  • by Acapulco (1289274) on Tuesday September 10, 2013 @03:36PM (#44812419)

    I have come to believe that "the invisible hand of the free market" is an euphemism for "MY invisible hand ON the free market"

  • by dittbub (2425592) on Tuesday September 10, 2013 @03:39PM (#44812471)
    Laws go to the highest bidder. What could be more free market?
  • by sasquatch989 (2663479) on Tuesday September 10, 2013 @03:51PM (#44812621)
    The issue is that Republicans are liars and at the end of the day are all just homophobic Democrats. Bush was not a conservative, not by any real economic measure, but that is Rove and Ailes fault. Of course when you look at the war-agitprop and unapologetic positions of Democrat leadership then you sson realize that democrats are just hedonist war-mongers. Their common fault is that they all believe that their party can fix what the other party has broken. I always refer to politics with the same analogy: It is just like professional wrestling. When the cameras are on and the stage is set they are bitter enemies, smashing each with rhetorical chairs and over-the-top storylines. When the lights are turned down and the crowd goes home, they are all backstage drinking beers and swapping wives. In the end its because the biggest corporatist-whores are the media themselves, the media that has never known a war that it at first didnt love and cheer-lead for, the media that always implicilty calls for legislative action, the same media that can get caught red-handed in a lie but never apologize or be punished. #CNNMakesYouDumb
  • by raymorris (2726007) on Tuesday September 10, 2013 @04:06PM (#44812819)

    This past weekend I walked by the Tesla store in Houston. I guess one of their employees got a dealer's license or something. I know two people with dealer's licenses, one owns a small dealership and the other sells a few cars a month from his front yard, so I guess it's not THAT big of a deal.

  • by landoltjp (676315) on Tuesday September 10, 2013 @04:25PM (#44813033)

    Disclaimer: I'm Canadian, but I have been to texas once.

    Ok, 1) Read TFA, 2) don't know much about selling cars (hate BUYING them enough).

    Is it possible for Tesla to franchise out a small Tesla dealership in these states? ie, play by the rules? Perhaps only to the barest letter of the "rules"?

    Are they not allowed to set a "no haggle price" model with the dealership? I'm not sure why not, since The Saturn Car company did that. They either allow for a few points for the dealership in a "dealership price" in texas, or they take a few points hit when selling in this model in texas. or both. It would then give them access to those markets.

    It really does seem like they're playing chicken, or "ok, if I can't play my way, I'm taking my marbles and going home".

    Perhaps they hope to change the system. I would love to see that sort of thing happen.

  • by gb7djk (857694) * on Tuesday September 10, 2013 @04:47PM (#44813299) Homepage
    Did you know that, here, we can go to one of several websites and buy a new car from any manufacturer, usually with a significant discount over list, together with a mandatory manufacturer's warranty that has to be honoured by that manufacturer's service outlets?

    The Health Service is creaking a bit though...
  • by TomGreenhaw (929233) on Tuesday September 10, 2013 @05:27PM (#44813849)
    Its a computer with a really nice set of wheels :-)
  • by apcullen (2504324) on Tuesday September 10, 2013 @05:45PM (#44813997)
    So far, nobody's mentioned in the discussion the following angle on the story:

    OK. So dealerships don't like being cut out. And they don't like it. Of course not. They're small businesses. They're owned by families, not giant corporations, and those families are terrified that all the rest of the giant corporations will cut them out the way that Tesla does. Is it really so much better when Tesla Corp (or Elon Musk, for that matter) keeps all the profit instead of sharing a small percent with a local family?

    I'm not a car dealer. Just thought maybe this was a point worth considering.

I have yet to see any problem, however complicated, which, when you looked at it in the right way, did not become still more complicated. -- Poul Anderson

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