Every comment from the auto dealers lobby includes something to the effect of everyone should have to play by the same rules, or follow the law, or something like that. It sounds reasonable to the uninformed. Our retort should ask why there need to be laws about how cars are sold or by whom? Are there any other non-addictive products that have laws about how they are sold or by whom? (It could be debated whether driving a Tesla is addictive or not, but let's not get into that). Such laws just protect the incumbents against new ways of doing business.
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Michigan passes bill to ban Tesla!
- Thread starter Joel
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- Tesla Inc.
I see. I just asked because (Tesla/Fisker) companies were thrown out in debates the last time by Romney and now that Tesla has grown and this issue is getting bigger, I thought it might make it's spotlight......I like your Apple comparison, might use that as well, thanks!
It's funny; I agree with the auto dealers in that everyone should follow the same rules! The only thing is that THEY would have to follow the rules of every other retail industry!
Since there are no universal bans, as FluxCap notes, of direct sales of goods by other manufacturers, such as Apple with their Apple stores, direct auto sales should also be allowed and the dealers should be one retail option for the consumer. Franchise laws are obviously outdated to consumers and clearly anticompetitive. These laws need to be struck down, but the question is how and when?
Perhaps we should start a grass-roots political action committee. The dealer lobby is strong and well-funded and although ALL consumers are harmed by their mark-ups and shenanigans, the voices of the consumers are not as powerful as the political arm and donations of the dealer lobby. I wouldn't know how to start a PAC, but I'd sure be willing to donate both time and money to it.
As a known local auto enthusiast, I've already spent plenty of time extolling the virtues of electric transport. GM's support of the bill is as amazingly short-sighted as the comments from the Michigan politicians. Now I'll start specifically talking to people and their families out of considering ANY GM vehicle ever. Funny that a company that has recalled orders of magnitude more vehicles in a single year than Tesla has ever sold is in favor of perpetuating the status quo rather than advocating for reform which could also benefit them!
Since there are no universal bans, as FluxCap notes, of direct sales of goods by other manufacturers, such as Apple with their Apple stores, direct auto sales should also be allowed and the dealers should be one retail option for the consumer. Franchise laws are obviously outdated to consumers and clearly anticompetitive. These laws need to be struck down, but the question is how and when?
Perhaps we should start a grass-roots political action committee. The dealer lobby is strong and well-funded and although ALL consumers are harmed by their mark-ups and shenanigans, the voices of the consumers are not as powerful as the political arm and donations of the dealer lobby. I wouldn't know how to start a PAC, but I'd sure be willing to donate both time and money to it.
As a known local auto enthusiast, I've already spent plenty of time extolling the virtues of electric transport. GM's support of the bill is as amazingly short-sighted as the comments from the Michigan politicians. Now I'll start specifically talking to people and their families out of considering ANY GM vehicle ever. Funny that a company that has recalled orders of magnitude more vehicles in a single year than Tesla has ever sold is in favor of perpetuating the status quo rather than advocating for reform which could also benefit them!
There's more to that section ...
The question is whether the last clause (bolded) applies to the providing of information portion. Lack of commas makes it less clear but I would argue that the intent is to restrict that communication.
I agree with the dealers' position--up to a point. When a dealer has been given a franchise to sell, say, Fords, there are a lot of shenanigans that Ford could play if it could open a company-owned store down the road. Once an OEM has gone down the franchised dealer route, there are good reasons why it needs to continue that business model.
What Michigan (like other states) has done is to require the use of franchised dealers. There's no sound argument for this requirement. The only way to avoid triggering the Interstate Commerce Clause is to assert that a restriction on trade is for public health and safety (which is why you always hear dealers talk about how they are the consumer advocate for safety, blah blah). I've never heard any of these arguments that holds up to careful scrutiny.
What Michigan (like other states) has done is to require the use of franchised dealers. There's no sound argument for this requirement. The only way to avoid triggering the Interstate Commerce Clause is to assert that a restriction on trade is for public health and safety (which is why you always hear dealers talk about how they are the consumer advocate for safety, blah blah). I've never heard any of these arguments that holds up to careful scrutiny.
Our retort should be: Please do not change the rules while we are playing the game.
The old rule did not include Tesla. The new rule (changed without any public comment or debate) includes Tesla.
It's tough to play the game when they keep moving the goal posts.
I actually do know how to start a PAC and/or non-profit advocacy organization and have been considering launching one, but I have no concrete plans as of yet. I think the best thing we can do for now is to continue to advance the cause by arming ourselves with facts, sharing them via forums like this, and championing these facts to our friends, associates, colleagues and anyone in our network who will listen. Things like debunking claims that people "prefer" the dealership car-buying haggling experience, or that there is no inter-brand competition among car manufacturers without the franchise model, are ludicrous and easily disproven.
I also agree with Robert that the time may be coming sooner rather than later when the interstate Commerce Clause becomes directly relevant, but until then we should continue to educate and inform to the best of our ability. History is on our side but we must stay vocal, mobilized and focused on the facts, which are overwhelmingly in our favor.
I would argue that this section has been misinterpreted by the people who have claimed Tesla can't open a gallery, attend auto shows, or otherwise advertise their cars. At the very least, it is ambiguous enough to be challenged. The key is the use of the word "from". This divides the sentence into two separate thoughts.
This subdivision does not prohibit a manufacturer
(a) from providing information to a consumer for the purpose of marketing or facilitating the sale of new motor vehicles
-or-
(b) from establishing a program to sell or offer to sell new motor vehicles through franchised new motor vehicle dealers that sell and service new motor vehicles produced by the manufacturer.
A gallery or auto show display operates exclusively under point (a). You can provide information on the cars, and facilitate sales by telling customers to go to the website or visit a store in another state. You just can't sell them a car while providing this information.
I'm having a bit more difficulty understanding point (b), but this may refer to test drive events and the like, which can be performed by manufacturers but must refer customers to franchised dealers to complete the sale. Thus, Tesla is prohibited from offering test drives consistent with how they were shut down in the past.
Kipernicus
Model S Res#P1440
Could Tesla set up a service center in Windsor, Canada and valet/tow Michigan cars across the border for service?
I agree that this section is ambiguous, and you have hit on the reason why--the absence of commas makes interpreting this provision difficult. Based on the legislative intent of the act, the State would likely argue that it should be parsed this way:
This subdivision does not prohibit a manufacturer
(a) from providing information to a consumer for the purpose of marketing or facilitating the sale of new motor vehicles
-or-
(b) from establishing a program to sell or offer to sell new motor vehicles
through franchised new motor vehicle dealers that sell and service new motor vehicles produced by the manufacturer.
Along those lines, I wonder if the law will be interpreted to allow Tesla to provide "ranger" service to Michigan owners. I don't know how much red tape would be created by having to provide parts and tow cars across the international border, however. It might be easier to work out of a neighboring state even with the added distance.
In any case, if Tesla opens a store in Windsor, this should make it relatively easy for Detroit area residents to view and test drive the car.
Red Sage
The Cybernetic Samurai
Yes, the text is ambiguous but unfortunately it does not favor Tesla. Let me explain why by breaking down the readings with parenthesis and brackets.
Pro-Tesla reading:
(i) Sell any new motor vehicle directly to a retail customer other
than through franchised dealers, unless the retail customer
is a nonprofit organization or a federal, state, or local government
or agency. This subdivision does not prohibit a manufacturer from
[providing information to a consumer for the purpose of marketing] or
[facilitating the sale of new motor vehicles] or [from establishing a
program to sell or offer to sell new motor vehicles through
franchised new motor vehicle dealers that sell and service new motor
vehicles produced by the manufacturer].
The pro-Tesla reading relies on the last section being separated by the OR
Anti-Tesla reading:
(i) Sell any new motor vehicle directly to a retail customer other
than through franchised dealers, unless the retail customer
is a nonprofit organization or a federal, state, or local government
or agency. This subdivision does not prohibit a manufacturer from
[(providing information to a consumer for the purpose of marketing) or
(facilitating the sale of new motor vehicles) or (from establishing a
program to sell or offer to sell new motor vehicles)] through
franchised new motor vehicle dealers that sell and service new motor
vehicles produced by the manufacturer.
The problem is, the Anti-Tesla reading makes the most sense from an english standpoint. Saying:
from establishing a
program to sell or offer to sell new motor vehicles through
franchised new motor vehicle dealers that sell and service new motor
vehicles produced by the manufacturer
Is repetitive. And would not be considered proper english.
From a legal standpoint, the Anti-Tesla reading makes the most logical sense. It would take a judge who is either biased towards Tesla or doesn't like this law to begin with to rule in Tesla's favor. Because it is really stretching it.
So unfortunately this doesn't look very good.
Pro-Tesla reading:
(i) Sell any new motor vehicle directly to a retail customer other
than through franchised dealers, unless the retail customer
is a nonprofit organization or a federal, state, or local government
or agency. This subdivision does not prohibit a manufacturer from
[providing information to a consumer for the purpose of marketing] or
[facilitating the sale of new motor vehicles] or [from establishing a
program to sell or offer to sell new motor vehicles through
franchised new motor vehicle dealers that sell and service new motor
vehicles produced by the manufacturer].
The pro-Tesla reading relies on the last section being separated by the OR
Anti-Tesla reading:
(i) Sell any new motor vehicle directly to a retail customer other
than through franchised dealers, unless the retail customer
is a nonprofit organization or a federal, state, or local government
or agency. This subdivision does not prohibit a manufacturer from
[(providing information to a consumer for the purpose of marketing) or
(facilitating the sale of new motor vehicles) or (from establishing a
program to sell or offer to sell new motor vehicles)] through
franchised new motor vehicle dealers that sell and service new motor
vehicles produced by the manufacturer.
The problem is, the Anti-Tesla reading makes the most sense from an english standpoint. Saying:
from establishing a
program to sell or offer to sell new motor vehicles through
franchised new motor vehicle dealers that sell and service new motor
vehicles produced by the manufacturer
Is repetitive. And would not be considered proper english.
From a legal standpoint, the Anti-Tesla reading makes the most logical sense. It would take a judge who is either biased towards Tesla or doesn't like this law to begin with to rule in Tesla's favor. Because it is really stretching it.
So unfortunately this doesn't look very good.
Vger
Active Member
A store would not be that difficult to manage. A service centre is another thing altogether, I fear. Consider that any work done or parts sold and billed in Canada would have to be declared at the border and would be subject to Canadian taxes. Transport Canada might also balk at the constant back and forth transport into a jurisdiction governed by different regulations, etc. It sounds rather daunting! We did used to have our Canadian-sold-and-spec'ed Roadster serviced in Seattle before Tesla Canada existed, and that worked OK, but that was the reverse direction and much, much lower volume.
alexucf
Member
Vger
Active Member
This could be the turning point that mandates that Tesla take the case to the Federal courts (commerce clause). In the light of this most restrictive of all state laws, I would be interested to hear from any US constitutional lawyers in our community about the arguments for/against such a case.
Teslas in Michigan ?!?!?!?!?
Michigan Against Tesla
I guess if you can't built a car that competes you just have to try and eliminate the competition. Sad. Very sad.
Michigan Against Tesla
I guess if you can't built a car that competes you just have to try and eliminate the competition. Sad. Very sad.
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