Trouble in NC: Senate Bill 327

[Eggplant]

Yeah, doing the math for how far I drive, $100 is waaaaay cheaper than the gas tax I paid on my hybrid over the last year. I don't mind all that much.

The real bummer is that it's a flat rate, and not based on your actual road usage. So for someone like me who drives 80+ miles a day it's s steal, but for others not so much.

 

[C.Ford]

Apparently, SB 327 has been amended by the Commerce Committee to restrict the definition of "unfair competition" as far as service goes to warranty repair requiring direct involvement of a franchised dealer without compensating said dealer. The bill, in current language, does not bar a manufacturer from providing service, repairs or updates directly without involvement of a franchised dealer. Sales are still restricted to franchised dealers, but at least I could continue to get my S serviced. Here is the text from the bill:

SECTION 4. G.S. 20‑305.2 is amended by adding a new subsection to read:"(e) For purposes of this section, an unfair method of competition includes any physical or mechanical warranty repair made or provided directly by a manufacturer or distributor to any motor vehicle located within this State requiring the direct participation of a dealer franchised by the manufacturer or distributor and without such dealer receiving reasonable compensation, equal to an amount no less than the amount provided in G.S. 20‑305.1.(f) No claim or cause of action may be brought against a dealer in this State arising out of any warranty repair, fix, repair, or update that was provided by the manufacturer or distributor without the direct involvement and participation of the dealer. Any manufacturer or distributor that provides or attempts to provide a warranty repair, fix, repair, update, or adjustment directly to any motor vehicle located within this State without the direct participation of a dealer franchised by the manufacturer or distributor shall fully indemnify and hold harmless any dealer located in this State for all claims, demands, judgments, damages, attorneys' fees, litigation expenses, and all other costs and expenses incurred by the dealer arising out of the actual or attempted warranty repair, fix, repair, update, or adjustment."

 

[Chris]

EVs aren't paying gas tax which is much of what funds road repair, so a separate tax isn't unreasonable, though I think the gas tax is becoming obsolete and how we fund roads needs to be rethought. Gas was a reasonable proxy for a tax on road use, but as vehicles shift to other power sources like electricity the gas tax becomes a poor proxy.

I see this somewhat differently. While we will have to find a better way to pay for roads etc. in the future, one also has to look at the environmental cost of ICE cars. Not only are they a major source of CO2 but the particle emissions cause respiratory diseases such as asthma in our children. This individual and societal cost of our current mass transportation needs to be considered as well.

 

[ItsNotAboutTheMoney]

I see this somewhat differently. While we will have to find a better way to pay for roads etc. in the future, one also has to look at the environmental cost of ICE cars. Not only are they a major source of CO2 but the particle emissions cause respiratory diseases such as asthma in our children. This individual and societal cost of our current mass transportation needs to be considered as well.

I'd be quite happy to start first with correct apportioning of road costs, with part based purely on miles (road volume) and the other on miles and weight (road use). Then we can throw in the double taxation (sales+non-use of fuels) requiring an adjustment and economic and environmental benefits as reason for incentives. It's more important that this terrible fixed-fee stuff stops first and we get to consumer pays.

 

[DJ Frustration]

Anyone know more info. about the incident when John Skvarla, Secretary of the NC Department of Environment and Natural Resources, drove the car to Gov. Pat McCrory's mansion and gave the Gov. a ride? Dome: Lobbyists effort lands McCrory in a Tesla Model S | Under the Dome | NewsObserver.com

Honestly, the more people get behind the wheel of this thing the more converts there are.

 

[Kipernicus]

While I agree that it's good to get lawmakers behind the wheel, that the Model S is a great car is not the debate here.

I haven't read the text of the bill but it seems that the proponents argue that to prevent unfair competition all cars MUST be sold by franchised dealers.

In other states Tesla has successfully argued that because there are no existing Tesla franchised dealers, having the manufacturer sell cars direct does not harm any franchisees.

Why doesn't this argument work in NC? Am I over-simplifying?

 

[brianman]

While I agree that it's good to get lawmakers behind the wheel, that the Model S is a great car is not the debate here.

I haven't read the text of the bill but it seems that the proponents argue that to prevent unfair competition all cars MUST be sold by franchised dealers.

In other states Tesla has successfully argued that because there are no existing Tesla franchised dealers, having the manufacturer sell cars direct does not harm any franchisees.

Why doesn't this argument work in NC? Am I over-simplifying?

It reminds me a lot of the drag strip results.

"Tesla has an advantage because it doesn't have to spool up to accelerate."
"And?"
"We should apply a 3sec penalty to the Tesla vehicles to make it fair."
"Or you could just make a better, competitive vehicle."

 

[Eggplant]

It's the precedent. They fear that if Telsa is allowed to do this, then other manufacturers will too, thus threatening their little family-owned monopolies.

 

[dflye]

It's the precedent. They fear that if Telsa is allowed to do this, then other manufacturers will too, thus threatening their little family-owned monopolies.

I think this is the unspoken crux of their position: they realize that they are parasitical dinosaurs that are only loved by their moms (and just barely at that, as we've evolved past the point where we eat our own young when they appear defective at birth)

In my entire nigh-upon 5 decades on this planet, I have yet to encounter one single person who thinks that an auto dealer is anything more than a leech in a suit.

 

[Bradleybang]

I had posted this over in another thread. The legislative fight for Tesla in North Carolina


I started researching the NC Senate Bill 327.
I see its primary sponsor is Tom Apodaca. He ranks fourth on donations list from NORTH CAROLINA AUTO DEALERS ASSOCIATION.
NORTH CAROLINA AUTO DEALERS ASSOCIATION | Follow The Money

I see someone has already updated his wikipedia.
"In May 2013, after receiving the maximum $8000 contribution from North Carolina Automobile Dealers Association, Apodaca sponsored legislation that would make it illegal for any car maker to bypass dealerships and sell directly to consumers in North Carolina. Apodaca's proposal, supported by the North Carolina Automobile Dealers Association, was widely criticized as anti-competitive and aimed at insulating automobile dealers from Tesla Motors' business model."


Some hypocritical comments from Apodaca's website.
Senator Apodaca - 48th District State Senator...

“North Carolina is a growing, changing state and has seen shifts in its key industries over the years; what was once primarily an agricultural state has changed to a hub of technology. As policy makers, North Carolina’s legislators have an important duty to ensure the state’s future prosperity. In today’s competitive business market and with many jobs being transferred overseas, we must do everything we can to make North Carolina the best state in which to do business. I am honored that NCFREE has recognized and shared my goal of promoting all North Carolina businesses.”

"The General Assembly did the right thing by requiring full disclosure and regular reporting of lobbying expenditures. We also passed a six month “cooling off” period before a legislator can become a lobbyist. This was an important step to making sure special interests don’t crowd out ordinary citizens in the decision-making process."

PRESS RELEASE
Senate Rules Chairman
Senator Tom Apodaca
48th Senatorial District
(828) 696-0574 District Office
214 North King Street Hendersonville, NC 28792

Raleigh, N.C. – Senate Rules Chairman Tom Apodaca (R-Henderson) received the “Sunshine Award” last month for filing transparent reports about campaign contributions.

The biennial award from “watchdog” group Democracy North Carolina is given to lawmakers who turn in “superior” reports that reveal details about who gave them campaign money and how it was spent.

Apodaca, a veteran senator and the architect of several critical bills in the 2011 legislative session, was one of only a few senators to win the award.

“When we took control of the General Assembly, we promised to be transparent and do things differently – and we’ve delivered,” Apodaca said. “I’m honored to receive this award, and I’ll continue working toward a more transparent government.”


I do have to thank Mr Apodaca. Due to this transperency, we can see that 3 of the 6 sponsors of this Auto Dealer protection bill received funds from the NC Auto Dealers Association.

 

[Plug Me In]

I finally got a chance to email my high school friend who also happens to be a co-sponsor of the bill. I've cut out some introductory chit chat but here's the body of the email. Kind of wordy but thought everyone might like to read and critique. I corrected a few grammatical errors in the final draft, but feel free to point out anyway. I tried to include some key hot-button phrases like "reduce dependence on foreign oil" and "American made".


"I bought a Tesla Model S a few months ago and have been following the progress of S327. I also noticed on looking up the bill that you were a co-sponsor, so I thought you might like to hear a consumer-side aspect of the story. I’ve always been interested in fuel-efficient cars, buying a Toyota Prius many years ago. I’ve since wanted a 100% electric vehicle, but haven’t been able to find one with enough battery range until the Tesla Model S came along. This car is way more expensive than any car I’ve ever owned, or wanted to own, but so far it’s been worth every penny. This car and this company, I believe, are setting the standard for the future of automobile transportation in the U.S.


The Tesla Model S is often portrayed by it’s detractors as a toy for the wealthy and a vehicle of limited utility, but this description is far off the mark. While it is an expensive car, it is owned by a wide spectrum of drivers and appeals to environmentalists, performance car enthusiasts, and those who want to reduce America’s dependence on foreign oil. The Model S is my daily driver and our first choice for family road trips. Tesla Motors has, most sensibly in my opinion, designed and marketed this wonderful car in a stepwise process to generate adequate capital for their long term goal of a lower cost, reliable mass-market long range electric vehicle.

I don’t think that S327 is in the best interest of the vast majority of North Carolinians. Most people, like me, find the process of buying a car at a dealership at best, onerous and at worst, terrifying. Requiring Tesla Motors, or any other small volume manufacturer, to sell through a dealership will do nothing but drive up cost to the consumer. This is particularly true for Tesla into the near future as demand is far exceeding supply. I also doubt that direct internet sales or direct manufacturer sales will ultimately harm dealers as consumers still want to see and drive automobiles before purchase and they will still require service, which, by the way, is a major revenue source for auto dealers.

Passage of S327 in its current form could significantly restrict sales of American made Tesla vehicles in North Carolina. Growth of Tesla sales and service centers could be effectively halted, thus significantly reducing growth of a burgeoning employment sector. The legislature should also consider a potential loss of sales tax revenue. I understand the desire of the NC Auto Dealers Association to protect their business but I do not think that an artificial prop of this fifty year old business model is in the long term best interest of any North Carolinian other than a very few people at the top of the automobile dealer hierarchy. I certainly wouldn’t expect you to drop sponsorship of the bill, but some language to exclude smaller volume manufacturers or some time window of exclusion might be considered.

Thanks for your time, Buck. As you can probably tell, I’m a big fan of Tesla and the Model S. I’d be happy to talk to you more about it, show off the car and you could take her for a spin. I could come to Raleigh some time or let you know next time I’m in Wilson. I could also try to track down an owner in the RDU area who’d be willing to share."

 

[jeff_adams]

Nicely worded. If you talk with him and he brings up an argument like "why doesn't Tesla just sell through traditional dealers?", tell him Elon Musk researched the data before he began selling the cars and found out that their has not been a single example in the last 90+ years of a new automaker being successful selling the cars through dealerships. Fisker and Coda are two recent examples that dealerships don't work well for electric vehicles.

 

[Bradleybang]

PlugMeIn,

I hope it works but I am skeptical he will change his mind.

It seems your high school friend is also supporting his contributors. He only got $2,000.
Contributions to NEWTON III, ELDON SHARPE (BUCK) | Follow The Money

 

[Plug Me In]

PlugMeIn,

I hope it works but I am skeptical he will change his mind.

It seems your high school friend is also supporting his contributors. He only got $2,000.
Contributions to NEWTON III, ELDON SHARPE (BUCK) | Follow The Money

I checked that too. Interestingly, he got about 3 times as much from the electric power lobby.

 

[TI Sailor]

I believe I've read where Tesla sourced a number of its parts from NC companies. I'm not sure if TM will give you the full list, but it would be helpful in your argument that TM supports American communities and jobs. It also might be worthwhile to ask him if he feels "dealerships" should be the only way to sell NC-made furniture. I seem to remember a lot of factory-owned stores when we were looking for some furnishing in Hickory and High Point a few years ago.

 

[Eggplant]

From: http://teslamotorsnc.com/key-facts/

...30 North Carolina companies that provide parts and tooling for Tesla and Tesla vehicles

 

[brianman]

...30 North Carolina companies that used to provide parts and tooling for Tesla and Tesla vehicles

I wonder how long 'til the underlined happens.

Hypothetical public statement:
"We were sourcing North Carolina manufacturers for parts for the North Carolina cars. But apparently they don't want our vehicles there, so we no longer need these suppliers."

 

[jeff_adams]

I wonder how long 'til the underlined happens.

Hypothetical public statement:
"We were sourcing North Carolina manufacturers for parts for the North Carolina cars. But apparently they don't want our vehicles there, so we no longer need these suppliers."

Not fair to those suppliers. Better headline "30 companies moving to South Carolina, taking jobs and taxes with them"

 

[brianman]

Not fair to those suppliers. Better headline "30 companies moving to South Carolina, taking jobs and taxes with them"

What does fairness have to do with it? "It's just business."

If fairness was a priority, NC wouldn't be a problem child.

 

[jeff_adams]

What does fairness have to do with it? "It's just business."

If fairness was a priority, NC wouldn't be a problem child.

Think about it. You open up a business in NC, then your knuckleheaded politicians enact a stupid law. That means your key customer should void his contract and send you into bankruptcy? You were somehow suppose to know this would happen prior to starting your business?

Politicians were bought. Tesla has hired their own lobbyists. None of that has anything to do with some poor headliner company that happened to have a NC address.