IOWA DMV pushed by dealerships to block Tesla test drives

[jjkroll]

Does anyone else think that Tesla is doing this to stir up debate to remove these ridiculous laws? It seems like a great way to seed the dissent to me.

 

[TexasEV]

Does anyone else think that Tesla is doing this to stir up debate to remove these ridiculous laws? It seems like a great way to seed the dissent to me.

If they were doing it to stir up debate, they would have kept going with the test drive event and garnered even more publicity from the state taking legal action against them. As I noted in an earlier post, that should have been worth more in publicity than whatever the fine was if the state won the case, so I don't know why they didn't take that route.

This is regulatory capture at it's finest.

 

[Red Sage]

"The Iowa Department of Transportation said the test drives were illegal for two reasons: Tesla isn't licensed as an auto dealer in Iowa and state law prohibits carmakers from selling directly to the public."

I'm pretty sure a test drive comes under the heading of marketing and promotion -- not sales. Does this mean that no one who manufactures anything for sale can demonstrate that product in the Great State of Iowa? They aren't allowed to give potential Customers the opportunity to experience their wares? Does the law specifically outlaw test drives of new cars -- unless they are performed by 'independent franchised dealerships'...? If there was no offer to sell the cars that were being test driven, where is the harm, and to whom?

"Customers can buy the Model S online or at one of a handful of Tesla stores around the country."

Actually, all of them are purchased through the Tesla Motors website. Even if you go to a Tesla Store, your purchase is made online, after a consultation with an Associate.

"Backed by dealership trade groups, several states, including Arizona, New Jersey, Maryland, Texas and Virginia, have banned or restricted Tesla from selling to the public."

They haven't been 'banned' anywhere. They make a perfectly legal product that anyone in the nation can buy. Tesla does not 'sell' cars. People come to buy them.

"State law requires auto dealers to be licensed, and by offering test drives, Tesla was acting as a dealer, Steier said."

I find it interesting that this isn't a direct quote, but a paraphrased statement. I'd like to know exactly what Paul Steier, director of the DOT's Bureau of Investigation and Identity Protection, has to say about this himself. It is strange that each time something of this sort comes up, we get direct quotes from representatives of automobile dealership associations, but the author's impression of what officials have to say.

"You can't just set up in a hotel parking lot and sell cars," Anderson said. "It's not a Tesla issue. This is a regulated industry."

But they weren't selling cars. The cars 'sell' themselves -- all it takes is a test drive. If they were selling cars, the vehicles that were being test driven would have been for sale.

 

[Zythryn]

I wonder if Harley Davidson is or has stopped in Iowa for one leg of their tour showing their new electric motorcycles?

 

[Liz G]

Ohio? Iowa is a state and capital is Des Moines. Am I missing something?

Guess it was one of those days where my brain was thinking one thing and my fingers typed another.

 

[crmatson]

I find it interesting that this isn't a direct quote, but a paraphrased statement. I'd like to know exactly what Paul Steier, director of the DOT's Bureau of Investigation and Identity Protection, has to say about this himself. It is strange that each time something of this sort comes up, we get direct quotes from representatives of automobile dealership associations, but the author's impression of what officials have to say.

See post #15

 

[yobigd20]

I wonder if running a Tesla commercial would also be considered "sales" and thus illegal.

 

[sklancha]

I live in Iowa and have a Model X reservation # 6,665. I was scheduled to test drive the Model S on 9/11/14. Early that morning, I received this email:

Thank you for your support of Tesla Motors. At this time, I regret to inform you we need to cancel your test drive appointment scheduled for today.

At the request of the Iowa Department of Transportation late last night, we have been asked to cancel the demonstration event and the display of the Model S within the state of Iowa.

We would be happy to coordinate another drive with you in our nearest store locations: Minneapolis, Chicago, St Louis or any other Tesla Store location of your choice outside of the state of Iowa: http://www.teslamotors.com/findus

Thank you for your patience and understanding.

Our best,

Ashley & Hunter
​

I contacted the Iowa DOT about the situation and received this response:

Chris,

Thank you for your inquiry to obtain the facts behind the cancellation of the Tesla event being held in West Des Moines. Our office was notified of this event on Tuesday afternoon and we visited the staff involved with the event on Wednesday. From our interaction with these staff and review of the activities taking place we determined this event was in direct violation of the Iowa dealer licensing and consumer protection laws. Iowa law requires anyone engaged in the business of selling, displaying, or offering motor vehicles for the purpose of retail sale to be licensed. This licensing is intended to protect consumers from being harmed by actions caused by a dealer and protects the integrity of the motor vehicle sales business in Iowa. For most people, a motor vehicle is the second most expensive thing they own and can be an important tool to function effectively in society. You should also be aware that the activities being conducted by Tesla this week could not legally be conducted by Iowa licensed new car dealers.

As a Department, we are not opposed to the innovative manufacturing and marketing of Tesla products, it just needs to be in compliance with Iowa law. In order for these type of activities to be legally conducted in Iowa, it would require action by state legislatures to change existing laws. I do appreciate your request to obtain accurate information from the source of your concern and if I didn’t answer all of your questions, please feel free to contact me.

​

Paul J. Steier, Director
Bureau of Investigation & Identity Protection
6310 Southeast Convenience Blvd.
Ankeny, IA 50021
[email protected]
Office: 515-237-3260
Fax: 515-817-6618
http://www.iowadot.gov/mvd/Investigative_Bureau/default.htm


In addition to writing a letter to the editor in response to the Des Moines Register article, I am planning on drafting a letter to send to state legislators as well.

It sounds like they cleverly found the loophole. If the Tesla employees that were staffing the event happen to be a part of the selling process, according to the Iowa law, they would not be allowed to provide the test drive. If the employees were designers, repairers, educators, etc- THEY would not be breaking the law

 

[Vexar]

I wonder if Harley Davidson is or has stopped in Iowa for one leg of their tour showing their new electric motorcycles?

Ah... it was done at Harley Davidson dealerships. Skids were suitably greased there. Good query, though.

 

[Zroiron]

I suppose that the Iowa legislature would pass a law that would prohibit private Tesla owners from surrounding states from coming into Iowa and offering test rides as well! Iowa dealers do not want to upset their apple cart!

 

[bonnie]

I suppose that the Iowa legislature would pass a law that would prohibit private Tesla owners from surrounding states from coming into Iowa and offering test rides as well! Iowa dealers do not want to upset their apple cart!

But they haven't yet. It looks like there is a small EV club forming in Iowa City (not Tesla-specific). New club touts benefits of electric cars . If they'd be willing to help host a ride-along event, would some of you Minnesota owners be willing to take a drive south?

 

[AudubonB]

And I predict that Iowa Bureau of Investigation & Identity Protection Director Mr. Paul J. Steier is for the next many weeks going to be achingly ruing the day he became a government bureaucrat, with these words

This licensing is intended to protect consumers from being harmed by actions caused by a dealer and protects the integrity of the motor vehicle sales business in Iowa.

coming back to haunt him day and night.

 

[GuyHall]

But they haven't yet. It looks like there is a small EV club forming in Iowa City (not Tesla-specific). New club touts benefits of electric cars . If they'd be willing to help host a ride-along event, would some of you Minnesota owners be willing to take a drive south?

Depending on the date, I wouldn't mind a road trip and would be willing to participate. After all if Alaskans and Canadians in the Yukon could drive a model S, Iowans should be a spam dunk.

 

[AudubonB]

a spam dunk.

EEEeeeww. Sounds gross. Why do you hate Iowans so much?

 

[bonnie]

Depending on the date, I wouldn't mind a road trip and would be willing to participate. After all if Alaskans and Canadians in the Yukon could drive a model S, Iowans should be a spam dunk.

Spam is Minnesota-made. Austin. The SPAM® Museum | SPAM

I'm talking to some good folks at EV Iowa. Not sure if we can pull a drive and ride event together before end of October, but stay tuned.

 

[bollar]

Seems like Tesla can fix this with the same "experience Tesla" event they offer in Texas.

 

[ThosEM]

I feel sorry for the dealers. They are burning the bridge to the ground, when they could be offering Tesla services that would persuade them to use dealerships in the long run.

 

[bonnie]

Seems like Tesla can fix this with the same "experience Tesla" event they offer in Texas.

How is the 'experience Tesla' event different from what they offered in Iowa?

 

[jerry33]

How is the 'experience Tesla' event different from what they offered in Iowa?

1. It isn't a "test drive".
2. You have to register for the event. It can't be done at any time like a dealer style test drive.

 

[bollar]

1. It isn't a "test drive".
2. You have to register for the event. It can't be done at any time like a dealer style test drive.

And probably 3. The employees offering the "Experience Tesla" events are not involved in the sales process.