c0lo writes:
"Following the ban on Tesla direct sale in New Jersey, Elon Musk wrote a message to the people of New Jersey on the Tesla Motor's blog, explaining why they don't want to go through dealers and what will happen next with the stores in New Jersey. To put a context around the issue: Tesla soared in consumer satisfaction, while Ford dropped and it's likely to continue dropping.
The post:
- explains why Tesla don't want to sell through dealers, claiming a conflict of interest between selling and servicing gasoline and electric cars.
- explains what will happen with their presence in New Jersey; the stores will be transformed into showrooms, with no info on price being offered, and servicing will not be impacted by the new regulation.
- tells people what they can do - buy online and receive the car delivered interstate or buy from across the river in Manhattan; They can also contact their representatives if they want back the right to buy directly from a store."
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Tesla Direct Sales Blocked by Law in New Jersey 77 comments
einar writes:
"New Jersey's governor Christie has decided that all new motor vehicles must be sold through middlemen. This blocks Tesla from directly selling cars, without traditional car sellers. Although, New Jersey decided so this week, they are in good company: 48 states in the US ban or restrict direct car sales."
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Elon Musk to the People of New Jersey
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(Score: 4, Interesting) by isostatic on Monday March 17 2014, @11:19AM
Why can't the stores be run by TeslaSales Inc (NJ), a wholely owned subsidiary of Tesla?
(Score: 2) by WizardFusion on Monday March 17 2014, @11:36AM
I saw this same type of comment somewhere. It is an interesting idea, and I don't see whey they can't.
They must have a good reason not too though.
Someone also suggested, Tesla buys the car, drives it 1 mile and then sells it as used.
(Score: 2) by mechanicjay on Monday March 17 2014, @11:41AM
When you first buy a car in NJ, you get a temporary registration which is good while the state finishes up the paperwork and issues the initial title. Generally, once a vehicle has a title all subsequent sales are as a used car. I'm sure there's some legal ridiculousness as to why they can't, this is NJ after all.
My VMS box beat up your Windows box.
(Score: 5, Insightful) by c0lo on Monday March 17 2014, @01:34PM
Because they would play the game the dealers want Telsa to play.
Would Tesla do it like this, the next thing that happens is the accusation they "abuse their monopoly" and refuse to sell through other dealers.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 5, Insightful) by Sir Garlon on Monday March 17 2014, @11:56AM
If I were asked to play that sophist game, I'd be disgusted. I hate to imply that a billionaire might have personal integrity, but Musk's decision to be assertive instead of passive-aggressive is circumstantial evidence that he might be a decent human being. Alternatively, there are certain costs and inefficiencies associated with introducing a layer of middlemen (think of the legal fees to set up such an entity in each of several states, plus the likely court battles) and perhaps Musk sees minimal benefit to absorbing that cost. These are not mutually exclusive propositions.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 5, Insightful) by Nerdfest on Monday March 17 2014, @01:41PM
Perhaps he also sees this as a problem to be fixed rather than worked around. Personally, I find that working pointless or misguided rules or procedures lends them undeserved validity or value.
(Score: 2, Interesting) by samwichse on Monday March 17 2014, @07:54PM
I bought stock in the company just to vote my approval of Musk's refusal to back down on this bullshit and reform what is, at its core, a sleazy industry. Car sales... ugh.
Put your money where your mouth is, I always say.
Sam
(Score: 5, Interesting) by MrGuy on Monday March 17 2014, @12:31PM
As I understand it, the regulation requires more than just that cars are sold through a dealership. They also have a square footage requirement (aimed specifically at Tesla's smaller non-traditional showing spaces), and a requirement that they have a certain number of cars on hand, which Tesla's showrooms tend not to meet. I believe there's also a requirement that dealers be legally independent, so a wholly owned subsidiary wouldn't qualify.
If it was fakeable, they'd have done it.
What I like is Tesla's response. They're keeping their showrooms opened, but just taking the pricing and the "offer to sell" down. Now they're just advertising spaces. Hey, if you want to go out of state and buy one, that's up to the customer. Wink wink.
(Score: 5, Insightful) by lx on Monday March 17 2014, @12:55PM
Not fighting for what you think is right and immediately going for loopholes in the law is a sleazy and cowardly way to do business.
Besides, once you give in to these kinds of regulations by bending the rules here and there you'll not only end up becoming part of the problem but you'll end up fighting the same fight in every market.
(Score: 5, Insightful) by MrGuy on Monday March 17 2014, @01:14PM
Not fighting for what you think is right and immediately going for loopholes in the law is a sleazy and cowardly way to do business.
Bullshit. Defying an unjust law by looking for loopholes is often a courageous way to throw that law back in the lawmaker's faces.
The law is ITSELF a loophole. They know a law explicitly banning Tesla from operating in New Jersey would be unpopular (and quite possibly unconstitutional). So they're not banning Tesla. They're banning ANY car dealer whose dealerships don't qualify. It Just So Happens that Tesla is the only manufacturer affected!
If Tesla had the ability with a simple legal maneuver to throw the ball back in the NJ government's court, and keep the spotlight on their desire to protect middlemen at the expense of the consumer, I am absolutely, 100% all for it. That's not cowardice. It's justice. Unfortunately, in this case I don't think it's possible.
(Score: 4, Insightful) by Sir Garlon on Monday March 17 2014, @03:12PM
Looking for loopholes only helps you, while openly challenging the law can, if successful, help everyone. However, businesses are not charities and they have responsibility to their shareholders. If doing the courageous thing costs a lot of money, is it still the best choice? There's such a fine line between "sleazy" and "reckless". Most companies err on the side of sleaziness, which I think is mainly a result of what business school does to a person's soul.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 5, Insightful) by lx on Monday March 17 2014, @03:19PM
I have noticed that in the US the letter of the law and the games played by lawyers are seen to be much more important than common sense and decency.
For people like me out here in the rest of the world it's often difficult to relate to that mindset.
(Score: 0) by Anonymous Coward on Monday March 17 2014, @05:12PM
In some places the Judges look down on such games - using "reasonable man", "spirit of the law" and other stuff to slap down people who try to be the equivalent of a 11 year old D&D player who has an extremely weird way of interpreting the rules.
Maybe they've running low on "reasonable men" in the USA and hence run too low on reasonable Judges.
(Score: 2) by Sir Garlon on Monday March 17 2014, @08:11PM
There is some sampling bias at work: people who use common sense and decency are less likely to go to court, and when they do, the ruling is less likely to be sensational or controversial.
The US is a country where the worst we have to offer is on television and the Web every day. It's easy to see how the exceptional and the shocking can be perceived as typical. Speaking of common sense and decency, the lack of those in the media is largely to blame for a distorted impression of what America is really like.
[Sir Garlon] is the marvellest knight that is now living, for he destroyeth many good knights, for he goeth invisible.
(Score: 5, Interesting) by VLM on Monday March 17 2014, @01:17PM
There are laws specifically to prevent that. Not prevent Tesla specifically, but prevent dealers from being owned by the mfgr.
At least theoretically, (wink wink) the consumer benefits from warranty work and recall work done by dealer and mfgr being in "opposition" to each other, sorta.
Also there is some truth to one state DMV, one state attorneys general, and dealership operates in one state (plus or minus funny business near borders and family owned operations). If we had a federal registration system... if we had federal regulation of dealerships... then a nationwide dealership concept would make a lot of sense.
Its a static vs dynamic stability problem. Allowing mfgr owned dealers would result in GM coming in, undercutting all the locals for all other brands until they close... it would be like the walmart effect, pretty much, but even worse. You'd get competition only until the competitors declared bankruptcy and then it would be monopoly time.
The benefit of a dealership network is resiliency. Resiliency has costs.
The short version is its not because of tesla but because of GM, ford, toyota, etc.
(Score: 4, Interesting) by Grishnakh on Monday March 17 2014, @02:14PM
Its a static vs dynamic stability problem. Allowing mfgr owned dealers would result in GM coming in, undercutting all the locals for all other brands until they close... it would be like the walmart effect, pretty much, but even worse. You'd get competition only until the competitors declared bankruptcy and then it would be monopoly time.
What are you talking about? GM isn't the only giant automaker out there; Toyota is much larger, and Volkswagen is the biggest of all. Ford is also quite large, as are Fiat and BMW. (Here's a list.) [wikipedia.org]
In addition to that, how is GM going to undercut anyone? GM is only going to sell GM cars. If someone wants to buy a BMW or Mercedes, there's no way in hell they're going to buy a GM of any kind. Same goes for most Japanese car buyers, Volvo buyers, etc. There's tons of people out there who wouldn't buy a GM even if it meant paying a giant premium to avoid it. There's still tons of people who absolutely refuse to consider any American brand.
Mfgr-owned dealers would just result in lots of dealerships (just like now), all owned by the MANY different automakers; we'd just have lower prices since we wouldn't have annoying middlemen who are out to screw over the consumer and stain the reputation of the manufacturers.
(Score: 2) by mmcmonster on Monday March 17 2014, @02:14PM
You'll always have competition so long as the Nissans' and BMWs' of the world still exist.
Let the relic dealers of the world get bought out and you may actually see better customer satisfaction knowing that they get the same price no matter where they buy the GM car.
Buying a car is stressful when purchasing through a dealer. Every time I do, my friends laugh and say that I got robbed (more than they got robbed on their car purchases, even).
I love the Tesla way.
Also, the number of jobs lost by losing a dealer shouldn't be many. The car companies still need showrooms and sales people. And if you get the dealer out of the way the salesperson's job is much easier. It will be more like purchasing a computer. Good prices and pretty much no negotiation.
(Score: 3, Interesting) by VLM on Monday March 17 2014, @02:24PM
"get the same price no matter where they buy the GM car"
Like Saturn? Which was a division of GM?
The point is that dealers skim at least 10% of the retail sales price market. Obviously not all of that is "excess profit" because even a mfgr owned dealership would have to pay to keep the lights on, pay prop tax, etc.
Still the first major mfgr to go from independent to corporate would get an instant 5% price discount. So the competitors can either go corporate, try to convince people to pay more because its "local", or close.
Am I the only person here old enough to remember when Walmart arrived and the little stores all closed? Admittedly the little stores did mostly suck, so I don't mind, but still...
Now I can either go to walmart with the ghetto people or target where the hot women shop and have my identity stolen. And there's not much else. And they know it, so prices have risen.
(Score: 5, Insightful) by wonkey_monkey on Monday March 17 2014, @11:53AM
Headlines are usually supposed to give you some idea of what the story is about.
This one looks more like someone accidentally a few words.
systemd is Roko's Basilisk
(Score: 5, Funny) by Geezer on Monday March 17 2014, @12:26PM
I see did there.
(Score: 2, Insightful) by carguy on Monday March 17 2014, @12:36PM
> I see did there.
Ha! No mod points or I'd give you a funny.
I for one respect our volunteer editors. My eyes took in:
Elon Musk to the People of New Jersey
and my brain interpreted:
Elon Musk [writes|talks|blogs|tweets] to the People of New Jersey
Doesn't your brain work this way too?
(Score: 2) by wonkey_monkey on Monday March 17 2014, @01:06PM
That wasn't my problem. The headline doesn't give any indication what Musk is communicating about, which, unless you're already familiar with the story (which headline writers shouldn't assume) would seem to be more pertinent than who he's writing to.
systemd is Roko's Basilisk
(Score: 2) by c0lo on Monday March 17 2014, @02:02PM
(groan) Suggestion: read the TFA, than mock a story submission and try to fit in the headline an indication what the story is about. Come back here with some examples which would fit the max len.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 1) by iNaya on Monday March 17 2014, @08:30PM
What's the max length?
Also, the headline doesn't give any indication about the subject matter. This is probably even more important than who the communication is aimed at, because really it applies to all the U.S. not just New Jersey.
"Elon Musk explains reasoning of direct sales to New Jersey"
"Elon Musk to NJ: the problem with dealers"
"Dealers are your problem: Elon Musk to NJ"
"Car dealers have a conflict of interest, writes Elon Musk to NJ"
And I'm not a headline writer by any means. I'm sure that someone with a fair bit of practice could write something more informative and succinct.
And he has a good point as well. What the anti-manufacturer-owned-stores people say about the "small" places shutting down doesn't ring true either. There are many independent, as well as manufacturer affiliated dealers where I currently live in New Zealand, and neither has any trouble surviving.
And I wouldn't care if they shut down either. A lot of independent dealerships are known for lying, underhand practices, deception, and dishonest dealings.
Of course - what's to stop manufacturers from doing this as well? It would probably be good to have a mixture of both. Regulate it so that while manufacturers CAN sell independently, the MUST still supply to independent dealers at wholesale rates.
(Score: 5, Interesting) by bucc5062 on Monday March 17 2014, @12:36PM
I love the subtle humor in your jab, but let's take a moment OT to reflect on your title.
SN was started, because a few, then many more felt that Dice was taking /. in a bad direction, culminating in the forced acquiescence of Beta (I spit on you...pst). People are not perfect so my time at /. was spent overlooking dumb headlines, poor summaries and such for I mainly enjoyed both what I learned from submitted articles and from the generally good comments.
It seems less then charitable to take umbrage with SN, to compare it to /. for it is still but a child, growing and learning. had you commented on the topic first, not just the headline you'd help contribute to the topic on hand. From there a slight jab with maybe a alternate suggestion to give aid to the editors. As you are not one (I figure), don't comment on the splinter in their eye without acknowledging the log in your own. Overall, SN has been a refreshing change to the drivel that /. has become. As we are all entitled to your opinion, I respect yours, but it could be improved by being constructive, not destructive.
So I'll blow Karma on my OT comment, but there is a slight trend the last few days to be more nitpick critical then constructively supportive.
Besides, the headline does pull you in.
"People of New Jersey...I am your new God, worship me"....An alternative to the real story :-)
The more things change, the more they look the same
(Score: 3, Insightful) by nitehawk214 on Monday March 17 2014, @03:04PM
Did you reply to the wrong post? GP did not mention anything about the old site, nor was his criticism non-constructive. (destructive?) He stated "Headlines are usually supposed to give you some idea of what the story is about." I agree.
What is the issue with pointing out something you do not like?
Yeah, I take exception to that, big time. Sensationalist and inflammatory headlines pull people in as well, but I think I speak for every contributor to SN when I say that we do not want that bullshit here. Concise, informative and neutral headlines are the best.
"Don't you ever miss the days when you used to be nostalgic?" -Loiosh
(Score: 2) by bucc5062 on Monday March 17 2014, @03:20PM
No, I did not. The OP makes reference to /. right in the subject line as in ...as Slashdot's. His criticism, not not quite destructive, gave little other then a slightly humorous jab. That was my point. So he points out something he does not like, but gives little back. I point out something I didn't like, but tried to give more understanding. I found his jab witty, but I had hoped he'd talk about the subject a bit. I admitted I was going off topic.
"Headlines are usually supposed to give you some idea of what the story is about." in so many words. "Musk talks to New Jersey?" "Eloy pitches Ideas" "Owner of Tesla suggests New Jer". You only have so many letters and the headline combined elements from the article. Maybe not the best, but not that bad. Sensational? How? Where? Inflammatory? Not even close. Other the Lummox's fau paux the other day I can't really say SN has been that bad compared to /., given that this place is new, editors are new, approach is new. Then, I don't try to figure out the whole submission from just a few words on the front page.
The more things change, the more they look the same
(Score: 3, Informative) by c0lo on Monday March 17 2014, @01:45PM
To the People of New Jersey
By Elon Musk, Chairman, Product Architect & CEO
(granted, without trying to submit a story, one may never learn)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 3, Insightful) by wonkey_monkey on Monday March 17 2014, @03:52PM
Blog post titles do not - as in this case - automatically make good headlines for news sites.
Here's a recent one: the Soylent headline was "Uptake of SDN Routing Hurting Conventional Sales" which was a marked and informative improvement over the linked article's "SDN Spawns Shift, Slowdown"
Blindly copying and pasting from a linked article is Slashdot's MO.
Headline length limits notwithstanding - the submission page appears to allow for 50 characters - it could still have been more informatively written:
systemd is Roko's Basilisk
(Score: 5, Interesting) by Covalent on Monday March 17 2014, @12:46PM
I'm surprised that Musk and co. haven't challenged the constitutionality of these laws. Tesla isn't selling crack or bazookas...they are selling cars. It is legal to sell a car in the United States, so a state prohibiting (or restricting) a company from selling its cars seems to be denying the "person" or Tesla Motors from its constitutional right to sell its products.
Cases in point:
https://en.wikipedia.org/wiki/Dean_Milk_Company_v. _City_of_Madison [wikipedia.org]_ Seelig,_Inc [wikipedia.org].
https://en.wikipedia.org/wiki/Baldwin_v._G._A._F.
IANACE (constitution expert), but it seems to me that states have tried this sort of thing before and have been struck down. Fighting a constitutional battle is expensive, but Musk is not exactly short on cash.
On a different note, this also reeks of the RIAA/MPAA's attempt to prevent downloading of music and movies. It just makes Tesla more desirable than it already is, makes the existing auto industry look like they are trying to foist bad products at elevated prices on a captive audience (and I would argue that they are), and inspires people to circumvent this law. I have seen evidence of this in Michigan (where I live) which prohibited sales of most fireworks for years. On the Ohio border, just 100 feet from Michigan, you could find store after store selling nothing but fireworks. When MI finally repealed the fireworks laws, just as many people had them as before...they were just paying MI sales tax for them instead of driving to OH to get them.
I say Tesla should start opening dealerships inches from the NJ border in PA and NY and offer to drive the car to your house in NJ for you...then laugh as Christie and co. try to make that illegal, too.
You can't rationally argue somebody out of a position they didn't rationally get into.
(Score: 3, Informative) by mmcmonster on Monday March 17 2014, @02:22PM
They already have showrooms in King Of Prussia (10 minutes from NJ) and Manhattan.
I guess they could also open one in Bethlehem PA (also 10 minutes from NJ) and pretty much have them surrounded.
The interesting thing to note: I have never seen a Tesla advertisement. Anywhere. These cars pretty much are selling on reputation and word of mouth. And they're sold out months in advance. (I have two friends who each put down $40K advance on a Tesla Model X, which won't begin shipping until this Fall at the earliest.) According to the sales rep in Manhattan, NY, the most common purchasers of Teslas are currently physicians and college professors. And that's for a $70-80k car with a 99% customer satisfaction rating. NJ needs them more than they need NJ.
(Score: 2, Interesting) by Grishnakh on Monday March 17 2014, @02:36PM
The sales tax thing doesn't apply here. When you buy a car, you have to pay sales tax based on your residence location, not where the dealership is located. It doesn't matter if you drive across the state line, they still have to charge you NJ state sales tax (7% !!) and remit that to NJ. I think it's supposed to be this way for ALL purchases, but no one bothers enforcing it for small things like groceries and donuts and fireworks, but for cars, because they're so expensive, it is enforced.
I say Tesla should start opening dealerships inches from the NJ border in PA and NY and offer to drive the car to your house in NJ for you...then laugh as Christie and co. try to make that illegal, too.
Christie and Co. will be laughing as the customers still have to pay NJ sales tax. We already have this anyway: there's lots of dealers in NY and PA that service NJ customers. Another stupid thing about NJ is that auto dealers are not allowed to sell cars on Sunday. Every dealership in the state is closed Sundays. It's called "Blue Laws", something that you only find in Democrat-leaning blue states like NJ, because apparently Democrats are really big on religious-based laws for some reason, unlike red-state Republicans (you won't find such laws in strongly-red states like Arizona!). So lots of people probably drive to nearby dealerships in PA and NY to buy cars on the weekend, since most of us have to work M-F.
(Score: 4, Insightful) by Anonymous Coward on Monday March 17 2014, @03:12PM
It's amazing that you can blame a political party for Blue Laws instead of the douchebag Christians who are to blame.
Parts of NJ are just shut down on weekends due to these antiquated piece of shit Sharia laws. FUCK YOU, YOU RELIGIOUS FREAKS. I just wanted to buy a camera!
(Score: 2, Interesting) by hb253 on Tuesday March 18 2014, @01:41AM
I'm an atheist, I live in NJ and I LOVE the blue laws. It makes for some peace and quiet at least one day per week. Every few years there's a vote to repeal and people always vote it down. I also love the fact we don't have to pump our own gasoline and it costs lees than in other states to boot.
The firings and offshore outsourcing will not stop until morale improves.
(Score: 2) by Grishnakh on Tuesday March 18 2014, @05:43PM
I blame a political party because that party generally dominates the elections here. If Democrats aren't religious freaks as you put it, then why do we have this ridiculous laws? The answer is simple: the Democrats ARE religious freaks, despite their claims to the contrary, otherwise they wouldn't vote for these idiotic religious laws. There aren't any red states where you can't buy a car on Sunday. What does that tell you?
(Score: 2, Insightful) by Leebert on Monday March 17 2014, @07:02PM
Incorrect. You pay sales tax based on where the transaction occurred. HOWEVER, many states have reciprocal agreements in place for things like car sales.
Then you get into fun things like use taxes. "Oh, no, that's not a sales tax for buying something in another state; that would violate the Commerce Clause. That's... uh... a USE tax, yeah. You have to pay that tax (which is coincidentally the exact same percentage as the sales tax) to USE the item in this state. And if you paid sales tax for the item, then we just go ahead and waive the use tax. See? PERFECTLY constitutional!"
The whole thing is a crock.
(Score: 2) by Grishnakh on Monday March 17 2014, @07:21PM
I see, that explains the car sales tax thing.
(Score: 2) by gottabeme on Monday March 17 2014, @10:06PM
> It's called "Blue Laws", something that you only find in Democrat-leaning blue states like NJ, because apparently Democrats are really big on religious-based laws for some reason
That's not why they're called blue laws. They date back to the 17th century. Use Wikipedia.
(Score: 2) by Grishnakh on Tuesday March 18 2014, @05:40PM
I never said that was why they were called blue laws. Use some reading comprehension. The term "blue laws" obviously dates back much farther than when national TV news started showing state maps in blue and red during Presidential races; that only started in the last 10-20 years as I recall. It's just a handy coincidence that blue states seem to be rife with blue laws, despite Democrats claiming they want separation of church and state, which is obviously a lie.
(Score: 2) by gottabeme on Tuesday April 01 2014, @07:27AM
>I never said that was why they were called blue laws. Use some reading comprehension.
You said:
> It's called "Blue Laws", something that you only find in Democrat-leaning blue states like NJ, because apparently Democrats are really big on religious-based laws for some reason
If that isn't what you meant, you should have said something like:
> It's called "Blue Laws." You only find them in Democrat-leaning states like NJ, because apparently Democrats are really big on religious-based laws for some reason.
Please don't accuse me of being unable to read when your writing is ambiguous.
Anyway, I don't think that's necessarily true about them being mainly in Democratic states. And as the Democrats lean more and more toward atheism, it will become still less true.
(Score: 1) by samwichse on Monday March 17 2014, @07:57PM
Problem is, they didn't name Tesla directly. They just built a set of laws that happen to exactly target what Tesla is doing.
See government sole-source contract writing for more info on this totally awesome, legal, and helpful loophole!
Sam
(Score: 5, Funny) by Grishnakh on Monday March 17 2014, @05:49PM
From Elon's blog post:
It's not untrue. This is New Jersey we're talking about: what other definition of "protection" is there in this state besides the Mafia version?
(Score: 0) by Anonymous Coward on Tuesday March 18 2014, @02:42AM
Tesla should just stop fighting hard against the states. Tesla should sell their products to dealers, complete with an MSRP. Some states will just have Tesla stores, with a fixed price a couple thousand lower lower than can be found at dealers. Just let good old fashioned greed do its job.