Tesla Sales Banned in New Jersey... hopefully not for long!

[apvbguy]

good points pharma and Norbert.

in the meantime, gibberish continues in the media.

if nothing else good comes from this issue the fact that people are realizing how inept the media is at getting the facts of the matter correct. as badly as the media is butchering their coverage of this their incompetence extends to just about everything they try to report on

 

[Wife]

Let's Defend NY's State to Purchase!

NJ is looking to implement the same anticompetitive legislation to prevent sales of Tesla today in a last minute switch.

The meeting at the NJ Motor Vehicle Commission is open to the public however, I'm not yet totally clear on the proceedings.

TM blog post: Defending Innovation and Consumer Choice in New Jersey | Blog | Tesla Motors

Agenda is at http://www.nj.gov/mvc/pdf/About/03_11_14_Agenda.pdf

I plan to attend to lend support where possible, can anyone here weigh in on what we can do to affect a fair and just outcome?

It was great meeting everyone yesterday & I think we all feel a loss here but we need to move forward with the fact what is progressing thru every state by every motor vehicle group that needs to protect their way of car life. We need to help NY state keep their rights so we can cross the Hudson to keep our values & rights as citizens. We all know yesterday was a great show of being railroaded by politics. Not one had been to a Tesla showroom to see what they were really voting against. We need to come up with a list of "talking points" for people we meet every day in our cars to let them know their rights were taken away. We need to find out what is going on in NY & cross the river to support our fellow EV lovers. We need to enlist the support of environmentalist that this is the wave of the future. We need to show our support for the cars we love. In support we are buying another Tesla before April 1st. The more EV's on the road the more we change the world.

 

[johnnydop]

Apologies if this has been answered already but will Tesla have to close the two stores? Can they not operate them as galleries?

 

[mpt]

Apologies if this has been answered already but will Tesla have to close the two stores? Can they not operate them as galleries?

That's my understanding of the worst case - it'll be interesting to see as, that's kind of what they are today - Art Galleries.

 

[Doug_G]

I just merged the two threads on the same topic, but kept the later thread's topic as it more accurately describes the current situation.

(Figures this would all break loose on the day I'm out of town...)

 

[hockeythug]

Apologies if this has been answered already but will Tesla have to close the two stores? Can they not operate them as galleries?

From what I saw about Texas I believe they still operate as galleries but the staff can't talk about sales.

 

[Julian Cox]

Exactly right. But the commerce clause issue is very relevant. This article in the Boston Globe is a must read: The fight for direct car sales - Opinion - The Boston Globe

Quote: But the thinking of many is that, if the court battles go onward and upward, the US Supreme Court will likely rule the entire auto franchise system unconstitutional; under the Interstate Commerce Clause, it would be seen as a restraint on trade. If so, the winners would not only be Tesla but all of us. Imagine how great it would be to buy your next car on Amazon — and even better, never have to deal with a car salesman again.

Tesla probably could ultimately take this to the Supreme Court and wipe out dealer franchise laws across the board on the basis of Interstate Commerce. However, the lack of dealers is a huge competitive advantage that Tesla currently enjoys. Freeing Big Auto from these chains is not the objective.

Right now dealers hamper the competition to Tesla so thoroughly that with Tesla's limited production and temporary lack of an affordable offering for the mainstream it is actually worth the loss of a few States to leave the dealer system hanging around the necks of Big Auto.

The universal dismantling of franchise laws would unleash Big Auto on the path of recovering declining margins on the sale of ICE vehicles. Much better timing to wipe out franchise laws when it becomes absolute that the only battleground for the consumer market as a whole is EVs, playing entirely to Tesla's years of first mover advantage.

 

[ckessel]

Given the expense of the Gigafactory, this type of legislation probably isn't a factor in Tesla's thinking, but it'd be amusing if Arizona and Texas didn't make the cut for other reasons and Elon used that as an excuse to say something like "In light of New Jersey's anti-competitive legislation, Tesla has decide it couldn't in good conscience build their factory in Arizona or Texas which have similar legislation".

Be great to get popcorn and watch the legislatures there deal with a bunch of angry voters over losing 6500 potential jobs.

 

[MarkR]

If I understand the procedings in NJ correctly, the scene was reminiscent of Alice in Wonderland in which the queen wanted "first the sentence and then the evidence." The idea that the board opened discussion to public comment only after the ruling against a Tesla was crazy in the extreme.

 

[tonybelding]

Oh, and for everyone that says the other car makers are against Tesla... WRONG! They would LOVE to sell direct just as much if not more than Tesla. That's what has the dealers so terrified.

I saw a quote in the press from somebody at GM in which they seemed semi-supportive of the dealer position, saying (paraphrased), "Tesla need to sell cars in accordance with the same laws as the rest of us." GM's disapproval of those laws was only implied. The nightmare scenario for them would be if Tesla gets out from under the franchise laws while established car makers are still hobbled.

And if that sounds far-fetched... There's been talk in Texas of new legislation that would exempt only makers of pure BEVs, which means effectively Tesla and nobody else. You know that both the dealers and the other car makers will fight that tooth-and-nail.

 

[ckessel]

I saw a quote in the press from somebody at GM in which they seemed semi-supportive of the dealer position, saying (paraphrased), "Tesla need to sell cars in accordance with the same laws as the rest of us." GM's disapproval of those laws was only implied. The nightmare scenario for them would be if Tesla gets out from under the franchise laws while established car makers are still hobbled.

And if that sounds far-fetched... There's been talk in Texas of new legislation that would exempt only makers of pure BEVs, which means effectively Tesla and nobody else. You know that both the dealers and the other car makers will fight that tooth-and-nail.

Any other car maker could do what Tesla is doing. They just have to get rid of their franchises.

 

[hockeythug]

Any other car maker could do what Tesla is doing. They just have to get rid of their franchises.

Are the GM's of the world not reliant on them to hold invetory of the millions of cars they create a year that just sit on the lot? GM is paid when they deliver the cars to the dealers and not when the cars are actually sold correct?

 

[Vger]

Tesla probably could ultimately take this to the Supreme Court and wipe out dealer franchise laws across the board on the basis of Interstate Commerce. However, the lack of dealers is a huge competitive advantage that Tesla currently enjoys. Freeing Big Auto from these chains is not the objective.

Right now dealers hamper the competition to Tesla so thoroughly that with Tesla's limited production and temporary lack of an affordable offering for the mainstream it is actually worth the loss of a few States to leave the dealer system hanging around the necks of Big Auto.

The universal dismantling of franchise laws would unleash Big Auto on the path of recovering declining margins on the sale of ICE vehicles. Much better timing to wipe out franchise laws when it becomes absolute that the only battleground for the consumer market as a whole is EVs, playing entirely to Tesla's years of first mover advantage.

Interesting strategic perspective. I do see your thought, but there clearly must be a point of diminishing returns for Tesla, if they do not pursue this in the courts. Elon thinks globally, so I wonder if he will really let US sales dwindle, while feeding the demand elsewhere in the world, allowing the frustration by the US consumers just keep boiling up.

- - - Updated - - -

Also: Do we have any US constitutional lawyers on TMC that could opine informally about whether this is an open-and-shut case?

 

[Doug_G]

One post moved to Politics - Quarantine Thread

 

[ItsNotAboutTheMoney]

Any other car maker could do what Tesla is doing. They just have to get rid of their franchises.

Well, apart from the fact that even if they could (and can't) the car dealer laws pretty much make it all or nothing and in many cases make it nothing.

They're stuck with the old model and as much as I'm sure they're enjoying Tesla challenging the laws, Tesla's getting to the point of being very scary.

 

[johnnydop]

The piece on Fast Money just now was spot on. Phil Lebeau clearly stated that the franchise laws are to protect the franchises from a manufacturer from selling directly but since Tesla doesnt have any franchises, they arent hurting anyone which makes the law not pertain to them.

Its like preventing me from having my own burger joint because its not fair to McDonalds franchises owners.

I dont understand what they think isnt "fair" about it. What advantages do Tesla stores have?

 

[palmer_md]

Its like preventing me from having my own burger joint because its not fair to McDonalds franchises owners.

Nice analogy.

 

[ItsNotAboutTheMoney]

I dont understand what they think isnt "fair" about it. What advantages do Tesla stores have?

It's not fair because Tesla doesn't have the same, inefficient business model as regular dealers.

 

[pbleic]

Also: Do we have any US constitutional lawyers on TMC that could opine informally about whether this is an open-and-shut case?

This story suggest it is:
http://www.forbes.com/sites/toddganos/2013/05/15/north-carolinas-threat-to-tesla-likely-unconstitutional/://www.forbes.com/sites/toddganos/2013/05/15/north-carolinas-threat-to-tesla-likely-unconstituthreat-to-tesla-likely-unconstitutional/

 

[dsm363]

Nice analogy.

Agree. Best analogy I've seen so far.