Strategies to Support Tesla's Direct Auto Sales Model

[bonnie]

Of course any responsible Conservative position anywhere would favor any manufacturers of anything to sell in the manner they wish to, with restrictions only for public health issues (e.g. Prescriptions for drugs, hazardous materials such as gasoline). Any rational analysis shows AutoNation survives nicely ( $19bn annual sales) as do many small local single outlet dealers. The local employment numbers by store type tend to show minimal differences, according to research I recall from almost twenty years ago. I doubt it has changed much.

It seems to me the arguments that can help in this case are rarely factual. If they were both Michigan and New Jersey, among others, would not have made their restrictions without public hearings or even public disclosure.

Because of the raw political content I argue that two different paths are required:

1) court action, which will be supported by the FTC, and which probably is the Tesla motivation for the Michigan application. It is probable that a favorable Federal Appeals Court ruling would not be overturned by the present Supreme Court. Of course this path is fraught with hazards.
2) Make common cause with others hearing common perspective who are adept political players, like AutoNation, among others.

Because the anti-free sales forces are mostly NADA and GM, there could be quite a few seemingly improbable alliances.

Ted Olson is spectacularly good at finding ways to pursue both of these paths and he's already on the job.

Thank you for posting this - people forget there are other things going on besides the 'calls to action' in various states. Tesla does have a big picture plan and they're working quite hard. But in the meantime, we have to stay on top of the rapidly changing landscape in various states. Dirty tricks abound. And that's one place where owners can help a great deal. Tesla fully recognizes that without owners amplifying the issues in Indiana last week, the unacceptable amendment would have been passed instead of being sent on 'for further study'.

GM is about to open up attacks in some new states. They're not stopping their barrage. As soon as I can get more actual details, I'll share. (I would love to be a fly on the wall at their offices when this stuff is discussed .... I wish I could understand better their motivation. A few years ago, they scoffed at Tesla as not worth their time. Now they're focused on them. I seem to smell fear. It seems personal to them ...)

[oh hey, GM ... I see you there, reading this thread I'm watching you, too!]

 

[SureValla]

As a Connecticut resident and upcoming model 3 owner I am very interested to see how the current legislation fairs in the next few weeks. I have just sent off letters to my state representative and senators. I am hoping for the best but I'm afraid the big money from the dealerships will win out over free market principles and consumer choice.

It appears it did pass the transportation committee by a wide margin (29-4) so hope remains.

Link to bill status:
Connecticut General Assembly

 

[Peter_M]

The Connecticut bill says:

... the commissioner may issue a new or used car dealer's license to a manufacturer, provided such manufacturer (A) does not have any franchise agreement with any new car dealer in the state, (B) manufactures only electric vehicles, (C) sells at retail only motor vehicles manufactured by such manufacturer, (D) does not hold a controlling interest in another manufacturer, or a subsidiary, affiliate or entity owned or controlled by such other manufacturer, that is licensed as a dealer under this subsection, and (E) is not owned or controlled by another manufacturer, or a subsidiary, affiliate or entity owned or controlled by such other manufacturer, that is licensed as a dealer under this subsection.​

And most of the dealers' statements in opposition to the bill said that their opposition to the bill was because it creates a special exception for Tesla. So why not delete condition (B) above - in other words, allow any manufacturer who doesn't have franchised dealers to sell directly? Existing dealers would still have their current arrangement and it would be the level playing field they say they want. I can only assume that condition (B) was put there to keep the dealers happy by limiting the true open market to EVs for now.

 

[SureValla]

The Connecticut bill says:

... the commissioner may issue a new or used car dealer's license to a manufacturer, provided such manufacturer (A) does not have any franchise agreement with any new car dealer in the state, (B) manufactures only electric vehicles, (C) sells at retail only motor vehicles manufactured by such manufacturer, (D) does not hold a controlling interest in another manufacturer, or a subsidiary, affiliate or entity owned or controlled by such other manufacturer, that is licensed as a dealer under this subsection, and (E) is not owned or controlled by another manufacturer, or a subsidiary, affiliate or entity owned or controlled by such other manufacturer, that is licensed as a dealer under this subsection.​

And most of the dealers' statements in opposition to the bill said that their opposition to the bill was because it creates a special exception for Tesla. So why not delete condition (B) above - in other words, allow any manufacturer who doesn't have franchised dealers to sell directly? Existing dealers would still have their current arrangement and it would be the level playing field they say they want. I can only assume that condition (B) was put there to keep the dealers happy by limiting the true open market to EVs for now.

I think they are afraid say Toyota would all of a sudden void any dealership agreements and go out and sell their cars without them. Since its only EV's it prevents this.

 

[Peter_M]

I think they are afraid say Toyota would all of a sudden void any dealership agreements and go out and sell their cars without them. Since its only EV's it prevents this.

Exactly - they don't actually want a level playing field.