MADA - MN Dealers attempting to block Tesla Motors

[Vexar]

This legislation:

https://www.revisor.mn.gov/bin/bldbill.php?bill=H0774.0.html&session=ls88

is yet another attempt by dealerships to stop Tesla Motors from doing business in one more state. My state. The dealerships in Minnesota fall into one of five "dealer families." They basically have a monopoly here already, so it shouldn't have surprised me. It still happened.

This website:

http://www.teslaminnesota.com/#!news/citr

covers the latest and has a link to a petition. There's a hearing this afternoon at 3 p.m. in Room 107 at the Capitol. I'm planning on showing up. It's across town for me, but I'm happy to go. Anyone else care to make it?

 

[lolachampcar]

Correct me if I am wrong but does this law not limit inter state commerce? If it does, it would seem unconstitutional.

 

[Objective1]

I'm very sad to see that Tesla wants unique rights for US-based, zero-emission car companies, and to hell with anyone else. This is pathetic special pleading.

They were on much stronger ground arguing that, having no franchises, there was no conflict of interest between them and any existing franchises for other companies.

Protectionism is protectionism, and it's sad to see Tesla Motors endorsing it.

 

[Discoducky]

The link doesn't work for me. Can't wait to read it..

 

[Al Sherman]

Huh? Doesn't the fact that this legislation even has a chance (a good chance) of passing mean that the franchises are being protected?

 

[Vexar]

I'm very sad to see that Tesla wants unique rights for US-based, zero-emission car companies, and to hell with anyone else. This is pathetic special pleading.

They were on much stronger ground arguing that, having no franchises, there was no conflict of interest between them and any existing franchises for other companies.

Protectionism is protectionism, and it's sad to see Tesla Motors endorsing it.

I don't understand how this is protectionism. Are you saying Tesla Motors should be required to have dealerships, that there should only be one way to sell a new car?
My read on it says that they can't open up the service center in Minnesota, nor any stores.

 

[Al Sherman]

Sure doesn't take too much to smell a rat here. AND know who it is. Follow the money. Let's cross reference every yes vote with politicians who took money from the franchises. Forget protectionism. How about corruption?

 

[rogbmw]

I'm very sad to see that Tesla wants unique rights for US-based, zero-emission car companies, and to hell with anyone else. This is pathetic special pleading.

They were on much stronger ground arguing that, having no franchises, there was no conflict of interest between them and any existing franchises for other companies.

Protectionism is protectionism, and it's sad to see Tesla Motors endorsing it.

Objective1 - I simply do not understand your logic on this one.... Lets say I manufacture a product, and want to sell it directly instead of hiring a middle man (in this case a franchise). Why would a state - or anyone else for that matter - have the right to tell me that I would HAVE to have a middle man (franchise) to sell it. To me - that does not make sense! No "protectionism" involved in that at all, unless you want to look at possible "protectionism" of the dealers who feel they have to have a franchise and access to sell someone else's product.

 

[RDoc]

I don't understand how this is protectionism. Are you saying Tesla Motors should be required to have dealerships, that there should only be one way to sell a new car?
My read on it says that they can't open up the service center in Minnesota, nor any stores.

I think the issue is that Tesla is conceding the goal of the legislation to stop foreign manufacturers from establishing their own sales outlets. My suspicion is the foreign angle was only inserted into the law as a smokescreen to distract lawmakers from the real intent, i.e. stop Tesla.
If this is passed with the foreign company restriction in place I wouldn't be surprised to see it challenged by the federal government. States don't get to impose foreign trade restrictions AFAIK.

 

[Objective1]

I think the issue is that Tesla is conceding the goal of the legislation to stop foreign manufacturers from establishing their own sales outlets. My suspicion is the foreign angle was only inserted into the law as a smokescreen to distract lawmakers from the real intent, i.e. stop Tesla.

Yes, that is what the political intent of Tesla's strategy is in this case. But abandoning a good principle for political expediency is a serious mistake. I keep asking myself if Tesla is a serious company that benefits from Green subsidies, or a Green subsidy play pretending to be a real company. O'Connell seems to be playing the green card, and only the green card.

@robmw: I was remarking on the view attributed to Tesla's Diarmud O'Connell here:

"O’Connell will urge legislators to amend the bill, Senate File 679, to permit U.S.-based manufacturers of zero-emission, all-electric vehicles to sell and service their vehicles directly to Minnesota consumers."

That's special pleading and accepting the protectionist arguments of the dealers (protectionism from any competition besides Tesla, not just foreign competition).

 

[Vexar]

Yes, that is what the political intent of Tesla's strategy is in this case. But abandoning a good principle for political expediency is a serious mistake. I keep asking myself if Tesla is a serious company that benefits from Green subsidies, or a Green subsidy play pretending to be a real company. O'Connell seems to be playing the green card, and only the green card.

@robmw: I was remarking on the view attributed to Tesla's Diarmud O'Connell here:

"O’Connell will urge legislators to amend the bill, Senate File 679, to permit U.S.-based manufacturers of zero-emission, all-electric vehicles to sell and service their vehicles directly to Minnesota consumers."

That's special pleading and accepting the protectionist arguments of the dealers (protectionism from any competition besides Tesla, not just foreign competition).

I see your point. Don't go after "special treatment legislative amendments" but address the law as a whole. Thanks!

 

[lolachampcar]

Tesla's job is to protect Tesla's interests, not go after bad law. Objective1, I get your point but should we not really be mad at the legislation and not Tesla's attempt to protect its own interest? I am having a hard time seeing Tesla as the bad guy here. If the leg. wants to po po on non-US mfgs that is hardly Tesla's doing.

 

[digitaltim]

To me, these franchise/dealer issues are non-existent since Independent Tesla franchises/dealers do not exist to be harmed by the creation of a direct to consumer model.

Other brands are always at risk by competition...with or without a franchise.

 

[rogbmw]

Thanks for the clarification.

 

[Robert.Boston]

States do have the right to establish strong franchise laws. The federal interstate commerce clause isn't triggered because there is no requirement that a state's citizens buy cars solely from in-state dealers. For example, I had the undoubted right to buy a car from Tesla in Palo Alto and to have them arrange shipment of that car to Massachusetts, even at a time when Tesla was not licensed to sell cars in Massachusetts.

I would love to hear the argument for these changes. The existing law already clearly protects franchised dealers from encroachment by their manufacturer. What public interest is served by restricting direct-sales models for new lines of cars? (Yes, yes, we all know the real reason for the law, but they have to have something to say to make it look like it's not completely self-interested.)

 

[RDoc]

I think the fig leaf is that they want to restrict foreign, i.e. non-US, companies from selling direct to consumers. Aside from being pretty xenophobic, if they do allow US companies to do so I still think the federal government will not be pleased by a state trying to come up with its own foreign trade laws.

Probably the supporters will argue just that, they have to restrict all manufacturers, US and foreign, from direct sales so the state won't be subject to federal intervention. Tesla would just be unfortunate collateral damage to avoid this immediate and overwhelming threat. Sad but unavoidable.

 

[Al Sherman]

I think the fig leaf is that they want to restrict foreign, i.e. non-US, companies from selling direct to consumers. Aside from being pretty xenophobic, if they do allow US companies to do so I still think the federal government will not be pleased by a state trying to come up with its own foreign trade laws.

Probably the supporters will argue just that, they have to restrict all manufacturers, US and foreign, from direct sales so the state won't be subject to federal intervention. Tesla would just be unfortunate collateral damage to avoid this immediate and overwhelming threat. Sad but unavoidable.

What would stop a lobby of auto dealers in any/every state from doing this?

 

[montgom626]

What would stop a lobby of auto dealers in any/every state from doing this?

Nothing.

 

[NigelM]

The federal interstate commerce clause isn't triggered because there is no requirement that a state's citizens buy cars solely from in-state dealers.

True, but it could be triggered if said law prevented Tesla from servicing your car.

 

[Mkelly]

Tesla is not asking for unique rights. Under current law, Tesla is free to open its dealership as desired. MADA is trying to CHANGE the law to keep Tesla out. They HAVE argued that because they have no franchises, they're not hurting anybody. This is an effort by high-end vehicle dealers to keep a competitor out. It's that simple. It's MADA who's engaging in protectionism, not Tesla.