stephenpace
VIN S00219
I commented on the article. If you have time, please do--it is another way to publicly show the legislature how one sided this discussion is.
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Babylonfive
Power12
DONE
p.s. to all interested - you have to do a quick signup to the Houston Chronicle site itself, but it wasn't onerous and was quick.
Link: http://www.autonews.com/article/201...attle-to-sell-directly-in-texas#axzz2V9HPY1qn
Tesla loses its battle to sell directly in Texas
Read more: http://www.autonews.com/article/20130603/RETAIL07/306039966#ixzz2V9HvqvER
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W.Petefish
Active Member
Not entirely. There is talk of a special session. (mostly for firearms related laws, but I will start to put the screws to the local law makers.)
medved
Member
Future Strategy
I know it's been a while but I've been thinking about strategy, and this thread seems like as good a place as any. I am aware that the Texas Legislature only meets in odd-numbered years. This essay should be assumed to pertain to Texas though some of the general points may be applicable to other states with similar restrictions.
Much has been said about public opinion and the Texas Automobile Dealers Association's lobbying which I don't need to rehash here. What I do want to say is that I don't believe a legislative solution is going to be politically feasible in anything resembling a reasonable timeframe.
First let me dispense with the notion of compromise as was tried during the 2013 legislative session. I think a compromise is untenable for these reasons:
• A compromise which limits the number of stores Tesla can open, or the number of cars they can sell, might be acceptable at Model S/X volumes but will be a serious headache at Model 3 volumes. And there are only 2 legislative sessions between now and the introduction of Model 3 (estimating late 2017 or 2018).
• The compromise that was proposed in 2013 doesn’t help other manufacturers. As I understand it the goal of Elon Musk and Tesla Motors is not just to make money for Tesla but to electrify personal transportation in general. Per the “All our patents” announcement Tesla is encouraging other auto manufacturers to get serious about electric cars. We have discussed elsewhere the resistance to electric cars from traditional franchised dealerships. In order to achieve the goal we don’t just need to liberate Tesla from dealerships; we need to liberate all auto manufacturers from dealerships.
• The TADA has clearly demonstrated that they don’t consider any compromise to be acceptable.
So assuming that compromise is off the table, let’s suppose we’re talking about a new bill for the 2015 legislative session that would completely remove the requirement that new cars be sold in Texas only through independent franchised dealerships. We believe that the majority of the public is on our side, and the legislature is elected by the public, so what’s the holdup? Well, unfortunately politics is more complicated than that.
The voters may dislike auto dealers, but they also care about other things, and they are likely to care more about some of those other things than they do about auto dealers. So Alice Voter says to herself, well, I disagree with my state representative about protecting auto dealers, but I agree with him on school finance, so I guess I’ll vote for him anyway. And Beatrice Voter says, well, I disagree with my state senator about auto dealers, but I agree with him on guns, so I guess I’ll vote for him anyway. And Constance Voter says, well, I disagree with my state representative about auto dealers, but I agree with him on abortion, so I’ll vote for him anyway. And so on.
Meanwhile, the auto dealers really like auto dealers, and they have a lot of money to donate to legislators who are their friends. And a lot of money to donate to opponents of legislators who are not their friends.
So for the legislators, the political arithmetic looks like this:
• Vote with the auto dealers, and maybe lose a few votes.
or
• Vote against the auto dealers, and definitely lose a lot of money, which will definitely cost votes.
Which way do you think that decision is going to go?
It’s got nothing to with good public policy, it’s just how politics works. I really don’t see us getting enough voters sufficiently fired up about this particular issue to make a difference in the next few years. Which is why I say that a legislative solution is not feasible.
Which brings us to the judicial strategy. It has been suggested many times in many places that the Interstate Commerce clause might come to the rescue. To recap the basic argument: The Constitution of the United States gives to Congress the right to regulate interstate commerce. If an auto manufacturer based in California (or Michigan, or any other state) wishes to sell a car to a buyer in Texas, that is clearly interstate commerce. State-level restrictions on that transaction are therefore an unconstitutional usurpation of Federal power. So we hope that if Tesla Motors were to sue the State of Texas and the other states with auto dealer franchise protection laws, Tesla would win.
Why hasn’t this been tried yet?
I think up to this point Tesla hasn’t needed to force the issue. The states which ban direct sales aren’t really hurting the company. Tesla is selling cars faster than they can build them as it is, and for the Texas customers they have, there appears to be an acceptable workaround. Right now Tesla doesn’t need to invest the time and expense in an ugly legal fight. For the time being it’s enough to make a few press releases and build public awareness.
I’m wondering, though, if there’s going to be a lawsuit, what the timing should be. I think when the Model 3 goes on sale Tesla needs to have these legal annoyances cleared out of the way. If the legal challenge goes all the way to the Supreme Court – and we can expect the dealers to fight all the way to the end – it may take a couple of years to work through the process. So I think Tesla needs to file the lawsuit somewhere in 2015 to get it dealt with by the end of 2017. I would expect to see Tesla make one more run at the Legislature in the 2015 session, then after they get out-lobbied by the dealers again maybe file the lawsuit in the second half of the year.
One more thought. Why does Tesla Motors have to be the party to initiate the lawsuit? I’m a Texas resident who wants to buy a Tesla automobile, right? Don’t I have just as much standing as Tesla? Why shouldn’t I start the process myself? I mean, besides the fact that I have zero desire to spend that kind of money or draw that kind of public attention. Or get my house fire-bombed by Red McCombs. But maybe somebody else?
These are just my thoughts. I am definitely not a lawyer or a politician, and not much of a chess player, so I may very well have something wrong. I’m looking forward to hearing other people’s thoughts.
I know it's been a while but I've been thinking about strategy, and this thread seems like as good a place as any. I am aware that the Texas Legislature only meets in odd-numbered years. This essay should be assumed to pertain to Texas though some of the general points may be applicable to other states with similar restrictions.
Much has been said about public opinion and the Texas Automobile Dealers Association's lobbying which I don't need to rehash here. What I do want to say is that I don't believe a legislative solution is going to be politically feasible in anything resembling a reasonable timeframe.
First let me dispense with the notion of compromise as was tried during the 2013 legislative session. I think a compromise is untenable for these reasons:
• A compromise which limits the number of stores Tesla can open, or the number of cars they can sell, might be acceptable at Model S/X volumes but will be a serious headache at Model 3 volumes. And there are only 2 legislative sessions between now and the introduction of Model 3 (estimating late 2017 or 2018).
• The compromise that was proposed in 2013 doesn’t help other manufacturers. As I understand it the goal of Elon Musk and Tesla Motors is not just to make money for Tesla but to electrify personal transportation in general. Per the “All our patents” announcement Tesla is encouraging other auto manufacturers to get serious about electric cars. We have discussed elsewhere the resistance to electric cars from traditional franchised dealerships. In order to achieve the goal we don’t just need to liberate Tesla from dealerships; we need to liberate all auto manufacturers from dealerships.
• The TADA has clearly demonstrated that they don’t consider any compromise to be acceptable.
So assuming that compromise is off the table, let’s suppose we’re talking about a new bill for the 2015 legislative session that would completely remove the requirement that new cars be sold in Texas only through independent franchised dealerships. We believe that the majority of the public is on our side, and the legislature is elected by the public, so what’s the holdup? Well, unfortunately politics is more complicated than that.
The voters may dislike auto dealers, but they also care about other things, and they are likely to care more about some of those other things than they do about auto dealers. So Alice Voter says to herself, well, I disagree with my state representative about protecting auto dealers, but I agree with him on school finance, so I guess I’ll vote for him anyway. And Beatrice Voter says, well, I disagree with my state senator about auto dealers, but I agree with him on guns, so I guess I’ll vote for him anyway. And Constance Voter says, well, I disagree with my state representative about auto dealers, but I agree with him on abortion, so I’ll vote for him anyway. And so on.
Meanwhile, the auto dealers really like auto dealers, and they have a lot of money to donate to legislators who are their friends. And a lot of money to donate to opponents of legislators who are not their friends.
So for the legislators, the political arithmetic looks like this:
• Vote with the auto dealers, and maybe lose a few votes.
or
• Vote against the auto dealers, and definitely lose a lot of money, which will definitely cost votes.
Which way do you think that decision is going to go?
It’s got nothing to with good public policy, it’s just how politics works. I really don’t see us getting enough voters sufficiently fired up about this particular issue to make a difference in the next few years. Which is why I say that a legislative solution is not feasible.
Which brings us to the judicial strategy. It has been suggested many times in many places that the Interstate Commerce clause might come to the rescue. To recap the basic argument: The Constitution of the United States gives to Congress the right to regulate interstate commerce. If an auto manufacturer based in California (or Michigan, or any other state) wishes to sell a car to a buyer in Texas, that is clearly interstate commerce. State-level restrictions on that transaction are therefore an unconstitutional usurpation of Federal power. So we hope that if Tesla Motors were to sue the State of Texas and the other states with auto dealer franchise protection laws, Tesla would win.
Why hasn’t this been tried yet?
I think up to this point Tesla hasn’t needed to force the issue. The states which ban direct sales aren’t really hurting the company. Tesla is selling cars faster than they can build them as it is, and for the Texas customers they have, there appears to be an acceptable workaround. Right now Tesla doesn’t need to invest the time and expense in an ugly legal fight. For the time being it’s enough to make a few press releases and build public awareness.
I’m wondering, though, if there’s going to be a lawsuit, what the timing should be. I think when the Model 3 goes on sale Tesla needs to have these legal annoyances cleared out of the way. If the legal challenge goes all the way to the Supreme Court – and we can expect the dealers to fight all the way to the end – it may take a couple of years to work through the process. So I think Tesla needs to file the lawsuit somewhere in 2015 to get it dealt with by the end of 2017. I would expect to see Tesla make one more run at the Legislature in the 2015 session, then after they get out-lobbied by the dealers again maybe file the lawsuit in the second half of the year.
One more thought. Why does Tesla Motors have to be the party to initiate the lawsuit? I’m a Texas resident who wants to buy a Tesla automobile, right? Don’t I have just as much standing as Tesla? Why shouldn’t I start the process myself? I mean, besides the fact that I have zero desire to spend that kind of money or draw that kind of public attention. Or get my house fire-bombed by Red McCombs. But maybe somebody else?
These are just my thoughts. I am definitely not a lawyer or a politician, and not much of a chess player, so I may very well have something wrong. I’m looking forward to hearing other people’s thoughts.
reddy
Active Member
Actually I have consulted with two attorneys, who believe there is actually a strong case, given the action of the state to deny the $2500 incentive to Tesla owners. Because Tesla would have had local sales without the current prohibition, the Tesla purchasers were denied the ability to qualify for the $2500 EV rebate. Thus either the rebate should go to all purchasers, or Tesla should be able to sell in Texas.
What we need are some actual recent purchasers in Texas, who are being denied the rebate. The suit would initially be on their behalf. This could crack open the ability to sell in Texas.
I'm not an attorney, but the attorneys felt strongly that the case had a lot of merit. We might need to set up a legal 'defense fund' of some kind to pay the legal fees.
If there are any recent purchasers who want to pursue this, please PM me.
What we need are some actual recent purchasers in Texas, who are being denied the rebate. The suit would initially be on their behalf. This could crack open the ability to sell in Texas.
I'm not an attorney, but the attorneys felt strongly that the case had a lot of merit. We might need to set up a legal 'defense fund' of some kind to pay the legal fees.
If there are any recent purchasers who want to pursue this, please PM me.
1. It will take years and be very expensive as it will be fought up to the Supreme Court.
2. Have you seen the recent decisions by the Supreme Court lately? They are all pro-greed and pro-religious-fanatics, like the recent Hobby Lobby decision. In other words, a decision is likely to favour the dealers. Once that happens Tesla is screwed in the U.S.
The Hobby Lobby decision very narrow in its judgment and just said that 1st amendment rights trump social policy when there are no practical limitations on the policy, which to me seems pretty clear.
I can see the argument that the Texas rebate is disadvantageous to people who want to buy from out of state, and therefore would trigger interstate commerce violations, but I think that the state will simply argue thst they limit to intrastate so that they can regulate it, in a regulated industry to protect consumers and taxpayers. So, a point of contention, I think, would be whether that particular rule adds value, and I think that's extremely questionable given the existing system of titling and Federal regulation. But, fundamentally, the claims of the interstate commerce clause is way overblown since it really only says that Federal laws on interstate commerce trump state law and it's also arguable whether in this case there are Federal laws. It could be argued that laws related to fuel economy mandates and tax credits on alternatively fueled vehicles show the presence of Congressional law and therefore prejudicial policies act against the intent of those laws.
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Yes, they're very clear. Your boss now has total control over what medical treatment you can get. Basically, corporations have more rights than people. What a country.
There is a story about Napoleon Bonaparte, which may be apocryphal because I can't find a source. The story is that Napoleon wanted to plant trees along the roads to shade his soldiers as they marched. One of his advisers told him that it would take many years for the trees to grow enough to provide shade. Napoleon responded that in that case they'd better start right away.
I think it's more accurate to say that the current SCOTUS makes an effort to rule as narrowly as possible. Recent cases on gay marriage certainly did not go the way the religious fanatics wanted. The Hobby Lobby case turned largely on the Religious Freedom Restoration Act, which was a sloppily written law, but how can you vote against something with Freedom in the name? I think the majority in the Hobby Lobby case was basically saying, Congress wrote a bad law, it's up to Congress to fix it. The fact that Congress is currently incapable of functioning isn't really SCOTUS's problem.
Reddy, I'm not an owner yet, but I plan to be next spring. If nothing appears to be happening by then I may contact you. Of course, after buying my Model S I'll be low on liquidity so the legal defense fund may be necessary.
Since I'm unable to give you more reputation points at this time, I'll pass on my +1 here.
So it seems Tesla is renewing their efforts in Texas.
Tesla in Texas - El Paso Inc.: Local News
Unfortunately, he seems to be buying the dealership nonsense. And he is the chairman of house committee on transportation funding.
Tesla in Texas - El Paso Inc.: Local News
Unfortunately, he seems to be buying the dealership nonsense. And he is the chairman of house committee on transportation funding.
Fortunately, that House committee wouldn't be the one to review dealership laws. Last session it went to the House Business and Industry Committee.
I was at that Tesla reception in Austin during Formula 1 weekend and didn't come across any legislators there, but Tesla plans to make another push in the 2015 session and will involve owners in that. No details yet. They know we're ready and eager to help.
Amazing. Since the last time Texas denied Tesla, sales have only grown. They didn't stop the public from getting this electric car, they just made it a little more difficult. I hope this time they see and understand what's going on and make it easier for the public, because it's not going to go away. They will just be delaying the inevitable while looking like dumbasses......again.
The legislature doesn't have to "remake the culture" or "carve out an exception." All they have to do is repeal the law that says cars can only be sold by independent dealerships. The market will sort out the rest.
I hope Tesla isn't going for a narrow exception for EV's again this time. I believe the correct answer is to end all the franchise protection rules period, and let any manufacturer sell direct if they want to. Last session we learned that the dealerships aren't willing to compromise so we might as well go for the whole thing. And I think it will strengthen Tesla's argument if they are fighting for the freedom of ALL car buyers, not just Tesla buyers.
W.Petefish
Active Member
The fact of the matter is, TM needs to put direct sales in a positive light... such as the sales tax revenue that the state would recieve.
It's just not politically possible "to end all the franchise protection rules period". Tesla would get laughed out of the legislature if it proposed that (assuming it could even find a senator and representative to introduce such legislation). The dealers contribute hundreds of thousands of dollars individually and collectively each election cycle to ensure that such a discussion would never happen.
In between that and a narrow exception for EVs, I think the best argument that could be made is one used in other states, that franchises should not be required for manufacturers that don't now have franchised dealers. It wouldn't do anything to change existing business relationships or the protections that franchised dealers enjoy vs. their manufacturers, it just says the dealer cartel doesn't have the right to sell any new company's product just because it happens to be a car. It would just allow Tesla and other new companies that prefer direct sales to be able to compete with dealers. If dealers claim they would be hurt by such competition, it voids their argument that they provide competition already and that they are best for the consumer. If that were so, consumers would prefer buying there and the dealers wouldn't be harmed.
Texas legislators may be convinced by free market arguments, but not if it upsets the status quo between dealers and the manufacturers they represent. Tesla gains nothing by trying to go there.
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