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.'"
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: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 $3k, it's enough to hurt, but just under the amount that would make a lawsuit overturning this doubtlessly unconsitituional tax financially worthwile. That said, after this experience I will never willingly live in New York state again.
Re:so much for a "free" market (Score:5, Interesting)
And yet the gas is cheaper than in next-door PA, where you have to get out in the cold. If you end up in NJ frequently, you even time your gas purchases for when you are on the Jersey side.
Re:Car dealerships (Score:3, Interesting)
very true
Having just bought a new car 2 days ago and having to deal with their shenanigans. Even using the internet cant help in some instances as they still weasel in their own fees.
The example in my scenario. Used truecar and kbb to find lowest possible price for a new car that was paid, truecar has participating dealerships and one accepted to sell at that price. I go in, get that price and my trade-in evaluated. However starting with the very first piece of paper they brought me I was lied to since they have no more negotiating power when agreeing to an internet price. They showed me on paper the price of the new car, my trade-in value, and right next to that the monthly payment amount at the agreed upon interest rate. However unbeknownst to me not having a car loan calculator on hand was that while the rest of the numbers were right the monthly payment price had 1500$ packed in to it that was listed nowhere. So from the beginning they led me to believe that the first monthly price shown was only car-tradein+taxes. Get to the end and they mysteriously managed to make some fees somewhere disappear in order to include a useless maintenance agreement for this magical 1500$.
In the end told them to remove the agreement, which at first they said would increase dealer fees 1500$, to which I said no because what would be the difference in me leaving with this packed into my loan and coming back within the 90 day cancellation period and getting a 1500$ refund, then no agreement and no extra fees. So eventually they had to back down and just remove it all together
So even in the internet age they keep trying to come up schemes to get their extra profit in there
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.
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.
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.
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.
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.