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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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Elon Musk to the People of New Jersey
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The Fine Print: The following comments are owned by whoever posted them. We are not responsible for them in any way.
Remember Darwin; building a better mousetrap merely results in smarter mice.
(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.