Merrill
Merrill
I know Robert, just get upset when things like this are out there. The CPUC is run by the x CEO of SCE, so you have the fox in the hen house, sorry to stray form the subject.
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> built on a system that allows new vehicles to be sold only by franchised dealers. [Bloomberg article]
Strawman argument, incorrect conclusion based on misreading of statutes, etc. "Built on a system PERCEIVED to require . ." would be better. And I doubt our blogger even tried to read any actual statutes.
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Strawman argument, incorrect conclusion based on misreading of statutes, etc. "Built on a system PERCEIVED to require . ." would be better. And I doubt our blogger even tried to read any actual statutes.
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Sorry, what are you getting at? I can't buy a car directly from GM. The dealership laws in my state (Washington state) see to that. We had a huge argument with our legislature until they recently made an exception that applied to Tesla.
Beavis
Model S Signature 991
I believe wycolo was referring to franchise laws, not dealership laws. The original franchise laws only applied to existing franchise relationships. They were designed to prevent bullying by franchisors against their contracted franchisees. It's only in recent years that states have been devising dealership laws requiring a company with no franchises to get some in order for the franchise laws to apply to them. This is a perversion of what is supposed to be a free competitive enterprise system.
I just found this thread, great conversation. Just add a little bit more without rehashing I found this article that completely debunks any and all arguments that dealerships have forwarded to support their positions.
Tesla and the Auto Dealers Lobby Truth on the Market
Now we just need all the state legislatures to update their regulations to allow consumers the choice to purchase vehicles with or without a dealer network. As has been stated before if a dealer adds value then they will survive and thrive, if not they will wither and die. Let the consumer decide!
Tesla and the Auto Dealers Lobby Truth on the Market
Now we just need all the state legislatures to update their regulations to allow consumers the choice to purchase vehicles with or without a dealer network. As has been stated before if a dealer adds value then they will survive and thrive, if not they will wither and die. Let the consumer decide!
callmesam
Member
@Robert.Boston & @CurtRenz,
What do you think about the Dormant Commerce Clause arguments that Tesla might advance. Haven't seen much on the matter, but it looks to me that TX and NJ are trying to advance the interests of local interest over out of state ones. I have cited often on this, but there is no exact case on point and there are several justices (Scalia and Thomas) that seem to reject the doctrine completely.
There seems to be a tenuous connection between the purpose of the statutes (protecting car buyers) and the reality on the ground.
What do you think about the Dormant Commerce Clause arguments that Tesla might advance. Haven't seen much on the matter, but it looks to me that TX and NJ are trying to advance the interests of local interest over out of state ones. I have cited often on this, but there is no exact case on point and there are several justices (Scalia and Thomas) that seem to reject the doctrine completely.
There seems to be a tenuous connection between the purpose of the statutes (protecting car buyers) and the reality on the ground.
Thanks for the link to that fine 2013 JUN 24 article by Dan Crane. In it he mentions the term rent-seeking. Coincidentally, on the same day Steve Blank published an instructive article describing that term in greater detail, and how it applies to the feud between dealerships and Tesla Motors: Strangling Innovation: Tesla vs. 'Rent Seekers' - Forbes
US Constitution, Article 1, Section 8, Clause 3 (Commerce Clause)
The Congress shall have Power...
To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
The implication seems to be that a federal statute specific to this matter would at least be helpful. Justices Scalia and Thomas may feel it would be absolutely necessary. They might need to retire before the court would deem it reasonable to overrule the related state laws without congressional action.
Two months ago I contacted my US Senator Dick Durbin who is the majority whip. He said he'd look into the situation. I wrote the Federal Trade Commision regarding the related White House petition that reached its signature goal eight months ago. This week FTC attorney Alan Friedman responded, "Thank you for your email. It has been forwarded to appropriate Commission staff members for review."
The real purpose of the state statutes appears to be protection for the owners of car dealerships. These are often descendents of the original owners. The statutes usually protect the right to inherit a dealership contract and license, even though the heirs may not have nearly the same degree of interest in the business as the founder. The dealership (owned by the grandson of the founder) that sold me my car was bought out by the manufacturer who expanded the territory for neighboring dealerships. I'll soon have to take my car in for a warranty repair at one of those other dealerships.
Fortunately, the legislature in my state of Illinois smiles on Tesla Motors. Unfortunately, the dealership lobbies in some other states have the legislators in their pockets. However, it seems that many legislators are beginning to sense that public opinion is strongly against the dealerships. I suspect that dealership influence is diminishing. They would have been wise to avoid picking on a small auto manufacturer. If their interference leads to federal intervention, all of the dealerships may go the way of horse breeders, blacksmiths, buggy makers and livery stables.
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The constitution calls for patents to protect monopolies on useful inventions. To say Tesla doesn't have the exclusive right to sell their car with its novel battery management, configuration and motor and transmission would require a massive rewrite of our intellectual property laws.
Yes, as a recent Forbes article points out, State laws impacting interstate commerce (i.e., a transaction b/t Tesla and a consumer) may violate the Constitution's Commerce Clause.
There is one situation where the dealers' argument that they protect consumers is clearly wrong -- where there is a hot new model. When that happens, the dealers often really jack up the prices. When the Acura NSX first came out (with an MSRP of about $65k) one dealer quoted me $100k.
If all U.S. states had required the required dealer model, Tesla would have gone bankrupt. Acura (Honda) could stand the ill will created by greedy dealers, but a startup with new technology could not. Mazda had a similar experience when the Miata first came out. Fortunately, only a few states require dealers, so Tesla was able to get established.
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If you want to investigate this line of thinking, concentrate on the "unreasonable burden" on interstate commerce cases. Most of the cases you will see on cases striking down discrimination against interstate commerce, but there are a few burden on commerce cases:
Edgar v. Mite Corp., 457 U.S. 624, 643 (1982) (struck down procedural barriers tilting the playing field in favor of local target companies in take-over battles); Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 352-353 (1977) (statute prohibiting display of apple grades unreasonably burdened apples from Washington): Raymond Motor Transportation, Inc. v. Rice, 434 U.S. 429, 447 (1978) (trucking statute invalidated); Kassel v. Consolidated Freightways Corp., 450 U.S. 662, 668-669 (1981) (same).
If all U.S. states had required the required dealer model, Tesla would have gone bankrupt. Acura (Honda) could stand the ill will created by greedy dealers, but a startup with new technology could not. Mazda had a similar experience when the Miata first came out. Fortunately, only a few states require dealers, so Tesla was able to get established.
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If you want to investigate this line of thinking, concentrate on the "unreasonable burden" on interstate commerce cases. Most of the cases you will see on cases striking down discrimination against interstate commerce, but there are a few burden on commerce cases:
Edgar v. Mite Corp., 457 U.S. 624, 643 (1982) (struck down procedural barriers tilting the playing field in favor of local target companies in take-over battles); Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 352-353 (1977) (statute prohibiting display of apple grades unreasonably burdened apples from Washington): Raymond Motor Transportation, Inc. v. Rice, 434 U.S. 429, 447 (1978) (trucking statute invalidated); Kassel v. Consolidated Freightways Corp., 450 U.S. 662, 668-669 (1981) (same).
> Sorry, what are you getting at? [Seattle]
Legal distinctions should not be glossed over. 'Journalists/Bloggers' tend to do that because that's who they are. Here we should maintain the statutory distinctions that gave credence to TM's position *in most states* from day one, i.e. that TM simply does not franchise thus not required to sell thru franchised dealers, PERIOD.
Some states like CO tried to sneak in some after-the-fact nonsense to make it appear that TM's business model never had legal standing in CO, but this failed miserably since by then TM had achieved popular support and resultant scrutiny.
The handful of states that currently have issues with the TM business model either have laws that differ from the above or else they are just trying to harass TM from weak legal basis. Whether or not WA is doing this is better left to observers more expert than myself; please bring us up to date wrt WA State. Is it in the Tx, NC, NJ, VA, MD camp or not??
Legal distinctions should not be glossed over. 'Journalists/Bloggers' tend to do that because that's who they are. Here we should maintain the statutory distinctions that gave credence to TM's position *in most states* from day one, i.e. that TM simply does not franchise thus not required to sell thru franchised dealers, PERIOD.
Some states like CO tried to sneak in some after-the-fact nonsense to make it appear that TM's business model never had legal standing in CO, but this failed miserably since by then TM had achieved popular support and resultant scrutiny.
The handful of states that currently have issues with the TM business model either have laws that differ from the above or else they are just trying to harass TM from weak legal basis. Whether or not WA is doing this is better left to observers more expert than myself; please bring us up to date wrt WA State. Is it in the Tx, NC, NJ, VA, MD camp or not??
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Washington State enacted legislation that allowed auto manufacturers already licensed as retailers to continue to operate (and expand). However, there was a hard cut-off date, and only Tesla met the requirement. So Tesla can do business directly in Washington, but no other OEM can do so.
Nubo
Test Mule
The choking irony of dealerships parading themselves as Defenders of the Consumer! It's like a tapeworm justifying its existence as "I'm here making sure nothing bad happens to your intestines".
