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.'"
Bada boom bada bing (Score:5, Informative)
They'll make you an offer you can't refuse.
Chris Christy isn't the only one with machinations.
Re:Bada boom bada bing (Score:5, Funny)
They'll make you an offer you can't refuse.
Chris Christy isn't the only one with machinations.
What, you don't think it's coincidence that the NJ State Flag has a severed horse's head at the top, do you?
Re:machinations (Score:2)
Are you saying that Chris Christy is machinima? Move over Max Headroom, that's really good shit! Where's the Kickstarter for their next digital marionette?
Is it wrong that I'm smiling? (Score:3, Funny)
Governor Christie is just concerned about the changes in traffic patterns that would be triggered by allowing electric cars to enter the state's vehicle markets unimpeded. Christie has a vision for the future of New Jersey and it is deeply important to him that municipal leaders across the state share his enthusiasm and goals. Enforcement along these lines would be impeded. Specifically, if the governor were to block off lanes to a bridge
Re:Bada boom bada bing (Score:5, Funny)
Can I stick my rock-hard, 15-inch, throbbing cock up your ass?
In my experience, most dealership negotiations start with this very question...
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Damn straight. They're out to fuck you blind. Of course they buy up politicians by the bunches which explains the rush to defend the dealerships from competition by a new paradigm.
Re:Bada boom bada bing (Score:5, Interesting)
Damn straight. They're out to fuck you blind.
Dealers try to mystify and generally complicate the process of buying a car by offering to arrange financing, making you a trade-in "deal" and obfuscating the true cost of the car. Fortunately you can get a detailed break down of the dealer's costs (including factory to dealer incentives) from Consumer Reports. Then you arrange financing elsewhere (or pay cash), sell your existing car yourself, decide on how much markup you'll pay, and resolve not to buy any additional services or warranties through the dealer. If you do those things you won't be walking into the dealership like a lamb to slaughter. They might as well try to fuck the Rock of Gibraltar. Some of them will try, but you just walk out the door and find a dealership that will sell you a car on your terms.
The last car I bought I walked into the dealer; the salesman saw I had the printouts and said, "I'm not stupid. How much are you going to pay?" I named a price 5% over the dealer's true cost. I could have opened with 3%, but I appreciated not having to go through the whole ridiculous ritual. It was a reasonable offer and the salesman immediately accepted. Half an hour later we finished up the paperwork; I dropped off a cashier's check the following day and drove my car off the day after that. It was all low-key and civilized, and by executing the deal quickly the dealership earned a fair paycheck for a couple hours of work.
This is the way buying a car should be: you tell the dealer which model you want, hand over a check and drive off. Letting the dealer do anything else "for you" is asking to be screwed over. Despite what the salesman claims, there is nothing the dealer can do to make your life simpler, except maybe fetching your plates from the motor vehicle registry. Do everything else yourself, including determining the price you'll pay for the car.
Re:Bada boom bada bing (Score:5, Funny)
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Well this escalated quickly.
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so much for a "free" market (Score:2, Insightful)
when will we learn?
Re:so much for a "free" market (Score:5, Insightful)
Re: so much for a "free" market (Score:3)
Re:so much for a "free" market (Score:5, Interesting)
In New Jersey, you still aren't even allowed to pump your own gas, due to a successful lobby by gas station owners ... in 1949. it's all "full service". never underestimate the power of crappy special interest lobbies in New Jersey.
Re:so much for a "free" market (Score:5, Interesting)
And yet the gas is cheaper than in next-door PA, where you have to get out in the cold. If you end up in NJ frequently, you even time your gas purchases for when you are on the Jersey side.
Re:so much for a "free" market (Score:5, Informative)
It's not so cut and dry. The difference in price of gasoline in these two states matches up almost perfectly with the difference in state tax rate. Take out the taxes and gas costs the same (which would still suggest that NJ customers don't really pay any extra for full service). NJ charges about 14 cents per gallon while PA charges 40. The current difference in sale price is 28 cents.
Tax rates: http://www.iftach.org/taxmatrix3/choose_tableq2.php
Average prices: http://www.gasbuddy.com/GB_Price_List.aspx
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New Jersey's self / full / obese services (Score:3)
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.
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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.
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That's the point: at least Zenni is allowed to exist, unlike Tesla direct sales!
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Re:Yes! (Score:4, Informative)
There's a BBC doc somewhere about the factories in China that make the "real" branded sunglasses. It's a bunch of Chinese workers in a nondescript white room operating injection molding machines. Some guy calls out "Switch!" in Cantonese, the workers swap out the dies, and it's Guccis for the next two hours.
It's actually not hard to see why this is the case. What you see as many retail brands is really just a few companies...
Luxottica [luxottica.com] (which also owns Lens Crafters), Marchon [marchon.com] (owned by VSP), and Safilo [safilo.com], plus a few smaller companies...
I think together the top three make up over 70% of the market.
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That said, I deal with a dealership that actually got my money based on quality of service and reputation. The added value there is that the sales person actually did homework to figure out which car would be right for my driving habits and future goals... on his own time. Told me to shop around while I waited for his quote and reasons -- so I did. Came back with his quote and said I felt it was a bit high, so he adjusted it, threw in some extras, and still beat what everyone else was offering. He ended
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Came back with his quote and said I felt it was a bit high, so he adjusted it, threw in some extras, and still beat what everyone else was offering.
This "make up a figure" pricing system and the need for purchasers to haggle down to the unknown real price is one of the things to hate car dealerships for.
For pretty much everything else consumers buy, other than real estate, there is an advertised genuine price, and different vendors compete openly on that price.
I welcome the fact that Tesla's lack of dealerships means honest pricing.
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Note I said consumer. I don't have a problem with B2B and business to government negotiating on price. It's expecting consumers to be knowledgeable about what the true price should be, and expecting them to have the skills to haggle that is wrong. All it does is ensures that decent people get ripped off.
As to sales commissions, if they must compete, then let them compete on the number of sales they make, rather than competing on how much they can get people to overpay.
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very true
Having just bought a new car 2 days ago and having to deal with their shenanigans. Even using the internet cant help in some instances as they still weasel in their own fees.
The example in my scenario. Used truecar and kbb to find lowest possible price for a new car that was paid, truecar has participating dealerships and one accepted to sell at that price. I go in, get that price and my trade-in evaluated. However starting with the very first piece of paper they brought me I was lied to since the
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.
Shooting themselves in the foot (Score:4, 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:Shooting themselves in the foot (Score:5, Interesting)
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.
That's true in most states. I got lucky in that I'd bought my car ~7 months before moving from New York City to Chicago...had I bought it 2 months later, I would have been stuck with sales tax in both states.
That said, as egregious as this is, it is nothing compared to the bullshit New York City and New York State inflict upon their residents. When I moved out of the state, I had to pay a punitive tax for having the audacity of leaving New York state. I kid you not. At around $3k, it's enough to hurt, but just under the amount that would make a lawsuit overturning this doubtlessly unconsitituional tax financially worthwile. That said, after this experience I will never willingly live in New York state again.
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Can you give details zbout this tax? Is it fir everyone(i doubt it), is it for home owners?
How do they apply it? How do they even know your leaving, until you dont file a tax return or renew your drivers license?
Re:Shooting themselves in the foot (Score:5, Interesting)
NY isn't the only state with a so-called exit tax.
One way that states apply an virtual exit tax is change the tax exemption status instead of pro-rating it. For example with property tax, such that if you leave the state, you end up paying a higher rate (e.g., lose the primary residence exemption on your property tax bill) vs if you moved within the same state you could pro-rate your exemption between 2 properties.
Another way is to have a separate rate for a transfer tax for non-residents (meaning it applies if you die or move). California was proposing this.
Another way is to blatantly add a surcharge (I think Yonkers has something like this)
Even if there isn't any actual tax liability, if you move out of the state, they will often chase you around claiming part of your income was derived from the state and you owe taxes on that amount. Say if you file your tax return from 2010-2012 in NY, then in 2013 you move say to Nevada and file a 2013 part year tax return for NY thinking you are in the clear for NY. Later in 2014 you only file federal taxes in Nevada, sometime in 2015 NY discovers that you never filed a NY state tax return for 2014, but the Feds got a 2014 return for you. They immediately send you a notice in the mail, that they have noted on your 2014 Federal Return that you had $X amount of adjusted gross income, and since you didn't file a NY tax return they "estimate" that $Y was earned in NY and as a out-of-state residence you should pay taxes on this amount (one theory they use is non-deductibility of state income tax for non-residents) . You can either fight this shake-down and show that none of the income was earned in NY, or just pay $Y.
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You can either fight this shake-down and show that none of the income was earned in NY, or just pay $Y.
The state of Colorado does the same thing, as a matter of policy. Fortunately "fight it" is as easy as filling out a one page form and mailing it in and you never hear from them again. Don't know if NY is the same, but I would expect it to be.
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Not that I didn't believe you, but I was curious to see what I could find out about that "Leaving NY" tax online. Sure I saw some stuff, but then *wham* I ran into something that will affect me eventually. It's HEROES EARNINGS ASSISTANCE AND RELIEF TAX ACT OF 2008, section 301 that says that if you emigrate FROM the US you have to pay capital gains tax on your possessions. I never even considered that I'd need financial planning in order to leave.
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Re:Shooting themselves in the foot (Score:4, Informative)
Did you see the exclusion of the first $600,000 in section 3?
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That's not correct. Unless there are some really weird laws in that region of the country you pay tax *only* in the state in which you register the car. Dealers typically collect this tax at purchase because they also take care of your registration paperwork but if you aren't registering in the same state then you don't pay tax at purchase time.
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It appears there's no additional sales tax. (Score:5, Informative)
According to the New Jersey MVC [state.nj.us] (PDF), if you purchased a vehicle in another state and paid sales tax on the vehicle, you provide MVC with the receipt. If you paid 7% or more sales tax in the other state, you pay no sales tax to New Jersey. If you paid less than 7%, you pay the difference to New Jersey. In practical terms, if the purchaser buys in the states neighboring New Jersey, there is no additional cost — New York State sales tax is 4%, Pennsylvania sales tax is 6%.
For example: Alice, who lives in Atlantic City, buys a Tesla in middle-of-nowhere Pennsylvania (6% rate) for $60,000. Alice pays Pennsylvania sales tax on that vehicle in the amount of $3600. If she had purchased the vehicle in New Jersey, she would have to pay $4200 in sales tax. So when registers her vehicle with the MVC, she'll owe the difference ($600), plus title fee ($60) and registration fee ($59 assuming it weighs under 3,500 pounds, see here [state.nj.us]), and possibly, if Christie is really an a-hole, a 0.4% Luxury Surcharge ($240). Keep in mind, if she purchased the vehicle in New Jersey, she'd pay the same sales tax, but all of it would go to New Jersey. If she purchased the vehicle in New York (4% sales tax), she would pay $2400 in tax to New York and $1800 in tax to New Jersey.
But, I could be missing something. If so, please let me know.
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Actually, in many states, when you buy a car, you can get a out-of-state delivery rider on the sales contract and not pay sales tax in the state you buy the car in and just pay the use tax on the state that you intend to register/license the car in. This is often done to facilitate title transfer for car brokers (that don't register cars, but still need to transfer title and move cars interstate).
I did this with one car I bought out of state (to simplify the paperwork and still not pay sales tax twice).
Re:Shooting themselves in the foot (Score:5, Interesting)
Actually, just like any out of state purchase, just tell the dealer you are going to register in another state, and they will give you a temporary tag instead of making you get one in the state you purchase. Then, you get 30 days to register in your state (and pay the sales taxes and registration fees). This usually helps negotiate a lower price on the car itself (in my experience anyway), because there is much less paperwork for the dealership to bother with.
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City tax (the NYC income tax, or the Philly income tax) is a whole different animal and creates the worst tax headaches when you are a commuter or only work in the city part time.
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NJ isn't losing much, if any, tax revenue, because the existing showrooms are converting to "galleries" where you can do everything but negotiate a price or place an order.
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Here's my idea (Score:2)
No one's selling a car here.
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Actually, those things also have a max top speed - they can't go over something like 30mph or they're classified as a motorcycle which requires insurance, registration, helmet, license etc.
And
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If it's really that simple a part, I think you could find it for a lot less than (car price - $5). You should probably switch those prices around.
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This what Elio is doing (Score:2)
They are making a 3-wheeled car, which doesn't make it a car anymore, but a Motorcycle or "autocycle" -- which will exempt it from a lot of the legal wrangling that forces most car makers to give up trying to sell in the American Market.
Elio Motors. Google 'em.
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A car is whatever the judge damn well says it is.
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Sure, don't register it as a motor vehicle...
Saturn (Score:2)
Re:Saturn (Score:5, Informative)
Saturn was never a "startup". It was always a subsidiary/brand of GM.
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And GM had the advantage of using their existing dealers. They leaned on them to build new showrooms, but most were existing dealers. It really and truly was just a re-branding effort. The new relationship with labor was interesting, but never really produced an exceptional car.
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They approached existing dealers first. Only if existing dealers refused to build a dedicated facility would they offer up the territory to a new dealer. I'm sure you could find Saturn dealers who owned no other GM franchises, but I am under the impression that this was rare. I do know one Chevy/Cadillac/Oldsmobile/Pontiac/GMAC dealer who told them to go pound sand.
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They had GM's money to invest, but it was pretty independent for a while.
That's what makes it not count for Musk's question. A startup gets new investor capital and builds something from scratch. Saturn was built on GM's foundation of money and experience.
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The evidence definitely is clear that there's something wrong with the US car industry if it hasn't had a new player enter the market in the past century and stay in business for more than a few years.
Musk is saying that the something wrong is independent dealers, which is not very clear- but fits his issue at hand.
Dealership model is so broken. (Score:5, Informative)
Imagine if you wanted an Apple computer you had to buy it through Best Buy or Radio Shack, and dealing with their personnel. The companies that do business this way are maddening. Elsewhere, companies like Cisco choose not to sell directly to buyers, making them go through a partner or reseller. This may have been an acceptable model years ago, but these days it's tedious and I think people expect more; they don't want to deal with a third party whose interests are not wholly aligned with their own. At least when you're talking about tech vendors, you can opt to deal with someone else who does business differently. Government enforcement of a given model is quite wrong-headed and needs to be stopped. It smacks of protectionism to me.
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Imagine if you wanted an Apple computer you had to buy it through Best Buy or Radio Shack, and dealing with their personnel.
That's actually how it was prior to about a decade ago when Apple retail stores started opening. And yes, it was miserable trying to talk to some of the Best Buy employees at the Apple store-in-a-store locations, since you didn't always get the guy who was trained in using/selling those products. These days, the guys working there are much better than they used to be, but the whole concept is still rather atrocious, and I'm glad companies are able to go directly to consumers with their products.
Also, Apple
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What? I believe you've always been able to order directly from Apple. No middle-man required.
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.
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Imagine having a store full of smartphones and nobody is buying them because they just order them online
It depends. Remember back in the late 90s, Gateway had a line of "Gateway Stores" where you could order PCs but they didn't actually have any inventory on hand for you to buy. It wasn't very successful. If people went into a Gateway Store, they actually expected to be able to walk out with a Gateway PC--not just go to a website in the store. They could have done that from home.
It's somewhat debatable, though, in regard to automobiles. I might not worry about blowing $9.99 on a crappy CD. But when it c
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]
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Are we really freaking out this much for an expensive luxury car that only the rich can afford, while we wait and hope and pray that we'll get the scraps in the form of a $30,000 sedan that only rich people can afford?
Every automaker is now making or thinking about making EVs, or at least hybrids. This is a massive step in the right direction. I do not think it is an exaggeration to say that after the Prius, the Tesla is one of the biggest influences in this movement. But I would prefer to never deal with another $tealership again. You know we still say that over in car-land, I guess we're less mature than the people who get angry when you type Micro$oft — you know, the kiddies too young to remember Compu$erve.
Should we just hate any company that marks up merchandise?
Alm
Already a White House Petition for this (Score:4, Informative)
There's already a White House Petition for this. If this reaches it's target this will be the second time a pro Tesla petition has reached 100k plus signatures - https://petitions.whitehouse.gov/petition/inform-new-jersey-markets-should-be-free-tesla-motors-and-everyone/ptHTHYMP
Open their own dealerships (Score:3)
Re:Open their own dealerships (Score:5, Interesting)
It is illegal for a car company to open its own dealerships. That is the point of the law, they are required to have a middleman.
Tesla could make a deal with John Smith to sell him cars wholesale, and have John Smith re-sell them to the public at a huge markup with hidden fees and sketchy high pressure sales tactics... That's what normal car companies do. Lots of people hate that system. I intend to buy a Tesla for my next car, because I've hated ever interaction I've ever had with a normal dealership -- even though Teslas are out of what I consider my normal price range for a car, even though the range limit is kind of a bummer, even though I don't really want an electric car, I'll accept those downsides just to avoid dealing with the scumbags that run car dealers around here. Apparently Elon Musk agrees that there's some kind of market value in selling to people liike me, which is why he is trying direct-to-customer sales.
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In other words: to be in the car business you have to be big from the start. Startups are locked out.
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Apparently the definition of "dealership" requires that two or more models be sold. Since Tesla only has the one model, they can't open a "dealership".
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Ford would require all their dealers to only deal with them, so Telsa would be locked out.
Nothing to do with electric power (Score:2)
This is an issue of allowing car companies to sell their own cars, I don't see how it matters whether or not those cars are gas, electric or nuclear powered.
There is an established (quite possibly corrupt) system, and Tesla is trying (possibly reasonably) to break it. I'm sure the dealers are happy to sell whatever makes them a profit, and of course resist any rules changes that will reduce that profit.
Anyone know the motivation behind the original law? Presumably GM would also like to be allowed to sell i
Looking back at history ... (Score:2)
... maybe he should have called his company "Edison" ... maybe that way, he'd be facing less problems ... ... Edison was in part responsible for Tesla's failure in the end, even though Tesla had far more impressive inventions ... though many falsely aren't attributed to him ...)
(check out the history of Edison and Tesla
correlation doesn't equal causation (Score:2)
Give me a break, Coda would have failed under any circumstances.
Musk, if you want to keep credibility, don't say incredible things.
As a descendant of the founder of Chrysler... (Score:2, Informative)
...having multiple family members across multiple generations work for Chrysler in its various incarnations, I thought they should have folded. They were the weakest of "The Big Three", and the one with the least-relevant product line. I saw the dealership my grandfather was head mechanic at close, I saw all of the truly great products get morphed into "nostalgia-mobiles" for the mullet crowd.
The existing car market is a convoluted mess - the more agile imports have forced the industry to shift. Even the
Conflict of interest? (Score:2)
I don't see why a dealership would rather sell a gasoline car rather than an electric car. They are not a gas station and Tesla is rather expensive, presumably resulting in a larger sales commission. On the other hand, buyers would benefit from having multiple options for returns, resale, repairs and bargin shopping for older models. Also, if Tesla goes belly up, there is still hope of multi-brand dealerships offering at least some continued services.
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A dealership has management and sales people that currently exist, so by default they excel at selling what they know: the gas cars.
An unconscious bias, but it is a huge one.
Would you want a Microsoft guy as a salesman for Apple or Linux solutions? He'd probably steer people towards Windows-based solutions because it is what he knows and is comfortable with.
Likewise, a non-dedicated electric car dealership wil
Sell them used (Score:2)
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Some enterprising individuals are doing exactly that and selling "used" Teslas over list price. There are some buyers who are willing to pay the premium to eliminate the hassles of out-of-state purchase and to avoid the waiting list for a new one. (Yes, the tax on the resale is part of the markup).
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What a POS article.... (Score:2)
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.
Tucker's failure [wikipedia.org] had to do with problems with the SEC and his own board of directors. Not because of anything having to do with dealerships but initially about selling accessories for cars he never produced. He had sold over 2000 dealerships at up to $30,000 a pop and it generated revenue, net inflow but because of these other problems he could never deliver the cars. The Dealerships weren't even a factor.
The DeLorean failed [wikipedia.org] because of questions about the financial stability of DMC again by the SEC and
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That's a bit of a double-edged comment, though, considering the subsidies Tesla has taken in the form of loans. When you encourage government to pick winners and losers, you can't be too surprised when they insist on doing both.
That said, good on Elon Musk for calling bullshit on this particular issue.
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These loans [teslamotors.com]that they have paid back early? Do you not consider bailing out the Big 3 to be a form of subsidy?
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Not just loans - every Tesla car is "subsidized" by thousands of dollars via a tax write-off for the buyer.
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]
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Since Tesla only sells EVs, it is correct to say "every Tesla". I understand that the government is not picking a company, but it doesn't make Tesla any less dependent on federal aid.
Re:In Soviet USA (Score:4, Interesting)
Since Tesla only sells EVs, it is correct to say "every Tesla".
It's pedantically correct, but disingenuous. The honest thing to say is "every EV".
Tesla any less dependent on federal aid.
And there you go beyond what you can prove. At the price Teslas are selling, an extra $7.5K would be very unlikely kill their market.
And if you didn't mean that, but simply that they receive federal aid, again ALL car companies that sell EVs do.
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Hummer (GM) : Renco Group : LTV Aerospace : AM General ( American Motors) : Kaiser : Willys-Overland : Overland Automotive : Standard Wheel Company
In other words, Hummer's roots go back further than many modern auto companies.
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Dealers make their money from maintenance. They don't want to support reliable vehicles. Look at the shit which has been going wrong with the vehicles they have been selling for the last 50 years. Surely that should have been fixed by now,
Re:Lack OF Qualified Complainent (Score:4, Informative)
Car dealerships are usually multi-brand. They're happy to see a new brand as long as they can profit from it. This is a big FU to dealership owners from Tesla, saying "we don't need you to sell our cars". And Tesla is right of course: they don't.
Never underestimate the political power at the state level of car dealership owners. They have name recognition and a marketing budget that dwarfs any state senator, and everyone in state government sees this. As an elected official, you don't pick a political fight with someone who already has his name and face across half the billboards in a major city, and spends more on ads every week than you did on your entire campaign.
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:It's a conspiracy? (Score:5, Informative)
LOL!
Let's see... Well, the obvious counterpoint to your argument is that PayPal *did* succeed. I happen to hate what it's become (all the abuses of banks, plus a few others, but even less regulation), but back when Musk was starting it up the idea was pretty revolutionary. Even further back, though, there's his startup Zip2, which was sold for over $340 million back in 99.
Since then, his *three* companies (people always forget SolarCity...) all seem to be doing fine. SpaceX has huge contracts, Tesla can't manufacture fast enough to keep up with demand, and SolarCity is one of the top installers of photovoltaic panels in the USA. Sure, they *could* fail, but so could IBM or Google or Coca-Cola. None of them are *likely* to, though. In fact, in the last decade Tesla is just about the only US-based car company that hasn't gone bankrupt...
As for whether the NJ law is aimed at Tesla, you'd have to be a worse nutjob than you claim Musk is to not see it. Let's see, a proposed bill that prohibits a car sales model which happens to be used by exactly one company in the world, right as that company is getting hugely successful? Yeah, there's no evidence at all that this is aimed squarely at Tesla... </SARCASM>