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Discussion in 'News' started by hun, Mar 20, 2014.
I hope they succeed:
Tesla Can Topple the Car-Dealer Monopoly - Bloomberg View
The answer is no. The only way to topple the car dealerships is for the common person to go against it. You are the electorate of the representative of congress, the senate, and president. Speak your mind to them. You have the power.
I liked the unbiased point of view, he really hit the nail on the head in regards to what is happening with a few states and the special interest lobby. I do not see why we cannot have both ways to sell cars, and let the market decide who survives. Just like all forward thinking people that realize things change and sometimes for the better and sometimes not. Competition is what drives new ideas, you cannot stick your head in the ground and hope for status quo.
If Tesla sticks to their guns they will win in the end.
Because 95% plus of voters back Tesla's position.
This is a classic battle between the narrow interest of a cartel and the general interest of the public.
Not to mention that Tesla has the constitution on their side. I can't believe the constitution would allow a state to make it illegal to sell a legal product absent a dealership agreement.
But it is also against the law to have an monopoly on a single product. Direct car sales is great, if they can sell them through independent retailers. We cannot just look at it from one point of view, it is best to understand the legality of it from every aspect.
Tesla doesn't. There are lots of choices for cars.
Tesla has a "monopoly" on it's own brand, but that's the case for many products. Hell, almost every small business has a monopoly on it's particular product. I can't buy a Pony Expresso coffee from anyone except Pony Expresso.
It's not a monopoly if only Tesla sells the Model S. It might be a monopoly if they sell the only electric car, but that's already not true.
As others here have wisely implied, it is not considered monopolistic practice to sell one's own brand, unless there are no competitors in the industry yet a large number of consumers depend upon it. In the twentieth century the government broke up Standard Oil and AT&T for monopolizing their industries. Being the maker of the finest product within an industry does not meet the definition of a monopoly, especially if its industry market share is quite small.
In a truly free competitive enterprise economy, it is consumers and not legislators who decide which innovative new companies should thrive and which outmoded ones should be allowed to wither away. This ideal can be disrupted by parasites that economists call "rent seekers". Here's a link to a marvelous Forbes article from last June that describes how this applies to the feud between dealerships and Tesla Motors: Strangling Innovation: Tesla vs. 'Rent Seekers' - Forbes
Just to be clear, it is not illegal in the United States to have a monopoly. It is illegal to acquire said monopoly through anticompetitive means. (I've been working on antitrust law issues for my entire professional career, so trust me on this one.) Tesla has succeeded by making a very desired product, not by using any illegal tactics (compare that to Microsoft, which unfairly and illegally advantaged its Internet Explorer software by leveraging its control of the Windows OS). The clearest example is with patented items: by definition, these are legal monopolies.
Moreover, the Department of Justice defines a monopoly with respect to a "market". Goods are in the same market if they are reasonable substitutes. So, the DOJ would not consider the Tesla Model S to be a relevant market for antitrust purposes: it's just another luxury automobile. The Model S clearly competes against, say, the BMW M5, Audi S7, Porsche Panamera, and mostly likely is in the same market as a a much broader swath of cars (MB E- and S-classes; BMW 5- and 7-series; Audi A/S 5, 6, 7, and 8; high-end Cadillacs; etc.).
Finally, there is no legal requirement that products be sold through multiple channels. If you want to buy a General Electric power-generation turbine, you can only buy it from GE directly. Imagine how weird the world would be if you had to "buy" your tax accountant's time not directly from him, but instead through a accountancy broker. The problem actually becomes recursive, if you think about it too much.
Back to the Bloomberg article:
If I were a Tesla PR guy, I'd be unhappy with this article. Tesla isn't trying to topple car dealers. Tesla is trying to sell its products to its customers in the way it chooses, and it's chosen not to use franchised dealers for good and sufficient reasons. I'm sure that Tesla really doesn't care about disrupting how its competitors sells cars. If anything, Tesla is probably delighted that its competitors use the least-trusted and least-liked distribution channel; it gives Tesla a competitive advantage.
No, it's not. Monopolies refer to markets, not products. The relevant market is the market for automobiles, of which Tesla has a market share of a fraction of 1%.
Every brand has a "monopoly" on its product if you try to use that definition. Is Starbucks required to sell its coffee to independent coffee shops? Is Trader Joe's required to sell its brand of groceries to independent grocers? Is Apple required to sell iPads through independent dealers? Is Warby Parker required to sell its glasses to other optical shops? Of course not. They can choose to if they wish, or not.
Sorry Robet.Boston, we were posting at the same time. He explained it better.
Evil Robert, evil! Now you have me thinking about it - how do I get out of this!
Yes, lets do that - where do retailers get the cars to sell to end customers? They all would need to go to Tesla.
If there is a monopoly to begin with, retailers do not solve the problem, they only add their own margins to the end-customer prices.
Any other car company can make a competitive product if they so desired. Tesla has no monopoly on electric cars with long range due to any regulations or restrictions on their part, but the inability of competition to rise to the occasion.
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Hopefully the base case has a stopping condition...
Agreed. It's easy for us to point fingers at the dealerships for attacking Tesla. It's also important to remember that Tesla is not trying to get conventional dealerships to change what they are doing. Tesla is simply trying to get dealerships to leave them alone to do things the way they are doing things. We all agree that this is a better way but Tesla only cares about what Tesla is doing and is not out to change what the others are doing.
Tesla is not a monopoly.
1. Anyone can make and sell cars and they do.
2. Anyone can make an EV. This is not exclusive to Tesla and other manufacturers make them as well.
Tesla is only a monopoly for selling, servicing, and maintaining Tesla cars.
Selling the product that you invented is not a monopoly when there are competitors that are selling other examples of comparable products. Tesla does not have a monopoly on cars, or on electric cars. It does, however, have a monopoly on the sale of the car that it invented--which is perfectly appropriate. Amazon has a monopoly on Kindles, and Apple has a monopoly on Macs.
The reality is that mandated, franchised retailers are a distortion of the marketplace. Car dealers have to earn a profit, and they do so by retailing cars at a markup from the wholesale price offered by the manufacturer. That increased cost to the consumer should properly demonstrate some value added in the good being sold, and where that can be demonstrated to consumers, they are free to make the choice whether or not to purchase that value.
Tesla's struggles in Texas, New Jersey and elsewhere serve to demonstrate that the spiritual home of free enterprise is sadly lacking in this industry.
The whole monopoly thing is bs IMO, in Northern California there is only 1 company you can get your electricity from. You can do without a car, but you cannot do without electricity. I know this is very simplistic but there are many example these kinds of monopolies it just gets back to the money. Who has more of it to spread around to the politicians, which in turn gives the special interest the ability to get what they want. I could go on and on but I will not.
Franchised monopolies are an entirely different kettle of fish. Your utility, PG&E, has a monopoly but is also required to submit all of its prices to the California Public Utilities Commission for approval. It doesn't make sense to have two or more sets of wires running down your street to provide competition to PG&E. Tesla is not at all like PG&E: you can readily by a car from dozens of sources, so there's no need to set up an elaborate regulatory scheme to keep prices reasonable.
We must have some obsessive-compulsive computer programmers on the forum. Whatever you do, don't read the back of your shampoo bottle. ("Lather, Rinse, Repeat")
What the car dealers want is another kind of monopoly. There's no reason why supposedly-independent small companies should be the only ones allowed to sell cars. The reason I say "supposedly" is because they often are not. In this city, most of the car dealerships are owned by a couple of families. There is very little actual competition.
In addition to that Tesla has a monopoly in manufacturing Tesla cars, specifically the Model S. That is very unfair and very monopolistic.