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Tesla Could Be Poised For Big Win: FTC To Hear Pros & Cons Of Franchise Laws

Electric700

Active Member
May 21, 2013
1,695
358
Florida, United States

cpa

Active Member
May 17, 2014
3,028
3,748
Central Valley
I hope this panel discussion will be more than just a patronizing move on behalf of the FTC. I wonder if this is preliminary to having informal discussions with members of Congress to contemplate legislation in the 2017-18 session.

Or could it be to begin to consider how closely these dealer franchise laws are to monopolies/cartels that really do not benefit a free market and preparatory to filing antitrust actions?
 

jgs

Active Member
Oct 28, 2014
1,581
933
Ann Arbor, Michigan
"Big win" seems a bit hyperbolic since as the article points out, the FTC doesn't have any legislative power. Still, not a bad sign. I do wish events like this would pay attention to states that prevent Tesla from building service centers as well, instead of focusing exclusively on sales. (Is Michigan the only state that does this?) As I see it, preventing Tesla from servicing cars is even more obviously anti-consumer and anti-competitive then preventing them from selling cars is.
 

Zythryn

Model Y custom Warming Stripes wrap.
Mar 18, 2009
2,169
1,189
Minnesota
Didn't the FTC already put out a paper supporting Tesla's case on this? (non-binding on the states obviously)

I believe members of the FTC put out opinion pieces about direct auto sales. However, as I recall, nothing official.
 

reddy

Member
Jan 26, 2013
891
1,172
Amarillo, TX
Thanks for posting this. In addition, if you would like to make your opinion on the matter known, there is an online form for public comment, and I've included the link below.
FTC to Host Public Workshop Examining the U.S. Auto Distribution System Workshop Will Explore Competition, State Regulations, and Emerging Trends in the Industry, Project No. P131202

Thanks for the link. If the numbering system is correct, it appears that I had comment #22. That's not very many, we need everyone to take the time to comment.
 

MikeL

some guy
Jan 24, 2013
1,044
138
Thanks for the link. If the numbering system is correct, it appears that I had comment #22. That's not very many, we need everyone to take the time to comment.
I'm on it. If past is prologue, the arguments in favor of the dealership model will literally be laugh lines. They add cost without value, period. ML
 

reddy

Member
Jan 26, 2013
891
1,172
Amarillo, TX
I'm on it. If past is prologue, the arguments in favor of the dealership model will literally be laugh lines. They add cost without value, period. ML


I focused on the fact that Texas has an EV incentive. Texas forces me to buy my EV out of state. And that disqualifies me for the EV incentive since it is limited to purchases from Texas auto dealers.

That goes beyond the anti-competitive protection for Texas auto dealers, it causes actual damage to Texas taxpayers.

I also used Dell as a great example of what can happen when manufacturers sell directly to consumers vs buying at a store like Computer Land. We have better choice, better quality, better service and lower cost.

Dealers know that the cheese is being moved on them. They are in a delay game. They can't win in the long run, and they know it.
 

jerry33

(S85-3/2/13 traded in) X LR: F2611##-3/27/20
Mar 8, 2012
19,577
22,012
Texas
I focused on the fact that Texas has an EV incentive. Texas forces me to buy my EV out of state. And that disqualifies me for the EV incentive since it is limited to purchases from Texas auto dealers
The "purchase out of state" is a bit overblown as you order from your computer and take delivery at the Service Centre. Yes, the paperwork says you bought it in CA, but that's just a formality. The Texas incentive only lasted for a few months and wasn't a significant amount to start with. Of course it's annoying that the dealer cartel can buy the legislators, but they have always been for sale, so nothing new.
 

Twiglett

Single pedal driver
Oct 3, 2014
2,737
2,663
Austin
The "purchase out of state" is a bit overblown as you order from your computer and take delivery at the Service Centre. Yes, the paperwork says you bought it in CA, but that's just a formality. The Texas incentive only lasted for a few months and wasn't a significant amount to start with. Of course it's annoying that the dealer cartel can buy the legislators, but they have always been for sale, so nothing new.
The main and most important part is that our so called impartial texas lawmakers deliberately crafted an incentive that required purchase through an auto dealer.
The size of auto dealer lobbying wallet was too large for most politicians to ignore.
 

Vexar

Member
Oct 11, 2012
553
94
Citrus Heights, CA
It seems to me like the State of Texas (or Republic, depending on with whom you speak) could use an owner's rally, like what happened in Iowa and Michigan over the last two years.


I focused on the fact that Texas has an EV incentive. Texas forces me to buy my EV out of state. And that disqualifies me for the EV incentive since it is limited to purchases from Texas auto dealers.

That goes beyond the anti-competitive protection for Texas auto dealers, it causes actual damage to Texas taxpayers.

I also used Dell as a great example of what can happen when manufacturers sell directly to consumers vs buying at a store like Computer Land. We have better choice, better quality, better service and lower cost.

Dealers know that the cheese is being moved on them. They are in a delay game. They can't win in the long run, and they know it.
 

jerry33

(S85-3/2/13 traded in) X LR: F2611##-3/27/20
Mar 8, 2012
19,577
22,012
Texas
It seems to me like the State of Texas (or Republic, depending on with whom you speak) could use an owner's rally, like what happened in Iowa and Michigan over the last two years.
We did that. Two times (maybe three). However in Texas that and $5 will get you a hot chocolate at Starbucks. Our legislators only care about how much money they get. If you don't come up with the payola, you don't get whatever it is you want changed.
 

dsm363

Roadster + Sig Model S
May 17, 2009
18,278
151
Nevada
I believe members of the FTC put out opinion pieces about direct auto sales. However, as I recall, nothing official.

That's correct. I think it was three people and they said their views didn't reflect official policy or something like that.
 

stopcrazypp

Well-Known Member
Dec 8, 2007
9,936
4,850
It says in the article itself:
"The FTC is a federal agency, not a legislative body, so there's little direct action it could take to upend the longstanding state franchise model."

Unless a federal law is passed (which is not what FTC does), I don't think the situation will change significantly. It'll still be a state-by-state battle.
 

Jim MacInnes

Member
Nov 1, 2014
290
114
Michigan
Didn't the FTC already put out a paper supporting Tesla's case on this? (non-binding on the states obviously)

Yes, when Michigan Senator, Darwin Booher who represents our district, wanted to bypass Michigan dealers to help another constituent sell Autocycles. He is not very sympathetic to Tesla, however. It is all outlined in the attached link. http://www.detroitnews.com/story/business/autos/2015/05/11/ftc-michigan-tesla/27122673/ I did give him a ride though so at least he knows what a Tesla is like.
 
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