Elon Musk Addresses New Jersey's Tesla Store Ban 229
An anonymous reader writes "On Tuesday, we discussed news that New Jersey is trying to ban Tesla stores, which would force the company to sell through car dealerships instead. Now, Elon Musk has prepared a response: 'The reason that we did not choose to do this is that the auto dealers have a fundamental conflict of interest between promoting gasoline cars, which constitute virtually all of their revenue, and electric cars, which constitute virtually none. Moreover, it is much harder to sell a new technology car from a new company when people are so used to the old. Inevitably, they revert to selling what's easy and it is game over for the new company. The evidence is clear: when has an American startup auto company ever succeeded by selling through auto dealers? The last successful American car company was Chrysler, which was founded almost a century ago, and even they went bankrupt a few years ago, along with General Motors. Since the founding of Chrysler, there have been dozens of failures, Tucker and DeLorean being simply the most well-known. In recent years, electric car startups, such as Fisker, Coda, and many others, attempted to use auto dealers and all failed.'"
so much for a "free" market (Score:2, Insightful)
when will we learn?
Car dealerships (Score:5, Insightful)
Car dealerships are an anachronism. They offer no real added value. If it weren't for state laws protecting them, they would have been gone years ago - especially with the creation of the Internet.
The sales people are a nuisance, the parts section is to be avoided at all cost - and it really pisses me off when there are parts that are dealer only on rare occasions.
Warranty work? That could be streamlined too by having a tech of your choice do it.
I was hoping the Elon would take his billions and his cult of personality and crush the industry, but I guess that was a dream. I have the same dream for the elimination of Real Estate agents- another pointless middleman that just adds unnecessary costs to the consumer.
Shooting themselves in the foot (Score:4, Insightful)
Re:Car dealerships (Score:2, Insightful)
Re:Shooting themselves in the foot (Score:4, Insightful)
If you want to register a vehicle that you've purchased out of state in NJ, you have to pay sales tax on it, unless it was previously registered at your former address in the state where it was purchased. So basically, if you live in NJ and want a Tesla, you have to pay sales tax (and possibly registration fees) in the state you purchase it, and then pay sales tax AGAIN in order to register it in NJ.
Re:so much for a "free" market (Score:5, Insightful)
Zing! (Score:4, Insightful)
The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures “consumer protection”. If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of “protection”, this is obviously untrue. As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind.
Ow, that's gotta hurt!
[John]
Re:In Soviet USA (Score:5, Insightful)
It's not "every Tesla", it's "every EV". The feds are not picking a company here. They are kick-starting a new technology, regardless who makes it.
The traditional car companies get exactly the same subsidy.
http://www.fueleconomy.gov/feg... [fueleconomy.gov]
Re:Dealership model is so broken. (Score:5, Insightful)
Obsolescence? They're trying to avoid obsolescence by getting a law passed that forces people to pretend it's still 1965 forever?
That doesn't work, it's just a way to pour government money (ie your tax money) down the drain.
Nothing is forever. Today's car dealers are not the inheritors of a century's old tradition, the motor car was only popularised last century, it's like television. At the start of the 20th century there were no broadcast TV networks, and at the start of the 22nd century there will be no broadcast TV networks, the idea that we're going to have to protect something just because it's been around a few decades is craziness.
The grand-parent gave an example of Cisco. I have a funny story about that. Cisco wanted my university to test some of their new gear, as part of an EU project. The idea was that the university would fit the Computer Science building with Cisco gear, and the CS department would use the new features in a "live fire" environment with everything a CS department does, instead of just a few boring accountants or something trying it out somewhere. OK, sounds good. We'll write the cheque, you send the hardware. Nope. Can't do that, Cisco doesn't deal direct with customers. We have to call a Cisco dealer, and get them to quote for the gear. Try that, the dealers all say they can't get the gear. Back to Cisco. Cisco says they'll have a word. Dealers come back, wow, sorry, yes, you can have that new gear after all. Here's our quote. The quote is outrageous. We can't pay that, we're publicly funded. Back to Cisco. Cisco says they'll have another word. Dealers come back with a new price. We say "No" again, and go back to Cisco. "OK" says Cisco, "How much can you afford to pay, and then we'll ask a dealer to work out their cut, and we'll discount the price to them until they can quote that price". So we have to tell Cisco how much we want to pay, then Cisco knocks off the dealer's margin, and tells the dealer they'll discount to that price, and then the dealer quotes us back our original price.
All of this costs Cisco a whole bunch of money, and for what? For the pretence that Cisco isn't directly selling hardware, even though in fact they controlled the entire transaction. It's stupid and it should go away - not be encouraged by the government.
Re:States Committing Citizenicide (Score:4, Insightful)
California and New York have lost probably near 1.5 million people over the last 15 years.
Uh, no. California's population has grown at a fairly steady rate for the past 100+ years. 1.5 million may have moved out of state, but far more have moved in to replace them.
Re:Car dealerships (Score:4, Insightful)
Err... I think Elon is *trying* to crush the industry. What more do you expect him to do? The company is expanding, is making a profit, he's got the supercharger network thing going, retroactively increasing the warrantee to cover things that aren't really Tesla's fault, wrangling with the NTSB over the "Recall" that wasn't and about a perfect safety score that *under reports* the car's safety performance, taking on state legislatures about this dealership thing... That sounds to me very much like someone in the process of breaking the industry.
Re:so much for a "free" market (Score:5, Insightful)
How is it a free market when the law doesn't allow it to be? A free market would be Tesla being allowed to sell how they choose instead of being forced to go through third parties. A free market would be being allowed to pump your own gas instead of being forced to pay some tard to do it and then expecting a tip for something you may have preferred to do yourself instead of just sitting in your car doing nothing at all.