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Why you can't buy a Tesla in these states
October 15, 2018
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Colorado was restricted to just one Tesla showroom/delivery center. The original franchise law said that manufacturers could only sell thru their franchised dealerships, but since Tesla had no franchised dealerships they were allowed to build one of their own. The dealership association immediately saw they had made a mistake and poured money into fixing the law to say that no dealership license could be issued to a manufacturer. But Tesla was grandfathered in, having already gotten their licence for one dealership.
Thus, the limit of one showroom in Colorado.
Until someone observed that the "mega-dealers" had multiple points of presence all over the state, but only one dealership licence. Aha -- Tesla can play that game too. Now they have three showrooms in Denver, plus one in Aspen and one in Vail. They are building a new delivery/service center near Boulder. And apparently there's nothing the dealership association can do about it.
Orange Floater In The Punch Bowl
Ask consumers where they'd rather buy a car. There's a reason dealerships have been nicknamed "stealerships" by the public. From decades of price gouging, selling bullschidt paint sealant and rust protection, putting people into 72 month car loans, taking them to the cleaners on a trade in, lying to them when it comes to service, and fixing stuff that didn't need fixing, the general public has no love for car dealerships. Now there is an alternative that eliminates all the games and lies during the purchase and also eliminates all of the service associated with an internal combustion engine, a transmission, and one or more differentials. There's no cooling system to freeze or leak or flush and refill. There's no water pump. There's no oil pump. There's no valves to foul. There's no camshaft or timing belt or timing chain. There's no block to crack or heads to warp. And there are zero gaskets to age and leak. There's no exhaust system to wear out. There's no emissions testing or components to fail. There's no oil or filter to change. There are no spark plugs or spark plug wires. There are no drive belts and pulleys for power steering, power brakes, or air conditioning compressors. There are no turbos. There are no fuel injectors to get clogged. There is no gas tank, fuel lines to leak, or fuel level sensor to fail. There are no rubber hoses to rot and fail. In some cases there is literally no transmission or a very simple transmission because electric motors don't need mechanical leverage like a gas engine and have a much wider range of operating speed. You have fewer or no differentials to wear and fail or maintain because electric motors can drive wheels directly or the front and real wheels separately linked only by sensors and software. What you replace all of that with is an electric motor that has been around for 100 years commercially. They are simple and only have a few simple mechanical components that may require service like bearings. Electric motors essentially have 1 moving part and can last 20 years with zero maintenance. So ask consumers if they want to leave their dealer service department in the rear view mirror. I'd bet very few will have any tears for their dealer who has been fleecing them for decades. I know I'm gonna laugh like hell when I finally move to an electric car. And I'd rather buy it directly from the manufacturer than a dealership set up to empty my pockets.
I don't see the reason for prohibiting Tesla or any other car company going direct. It's probably a mistake, but States should not protect people or companies from making mistakes. Remember, Henry Ford started the dealership model because of the extraordinary amount of cash that would be needed to finance inventory and the amount of capital needed to maintain parts and keep service centers open.
While there are a few errors in this article, it's one of the best I've read about why Tesla doesn't have dealerships in every state. I live in South Carolina, ordered my Tesla on line, picked it up in Charlotte, NC (showroom location), still paid the same sales tax in SC. SC doesn't care where you buy the car, it's where's registered, you pay the taxes. All the paperwork in handled in Raleigh NC where they do have a dealership. Glad to see someone write a honest article about Tesla.
The states I've lived in you pay sales tax in the state the vehicle gets titled in to avoid other states collecting the sales taxes when people buy out of state. Surprised Connecticut doesn't do the same.
New car dealers have become nothing more than rent seekers, looking to the government and regulators as their first line of defense against innovative competition (like Tesla). Since their business model is not a true example of free enterprise they cannot survive without big government regulations (automotive franchise laws). Because of this they use government regulation and lawsuits to keep out new entrants with more innovative business models (like Tesla). They use every argument from public safety to lack of quality or loss of jobs to lobby against the new entrants. They spend money to increase their share of an existing market instead of creating new products or markets. Rent seekers behavior creates nothing of value. New car dealers have their lobbyists, the NADA, lobby directly to legislative bodies (Congress, State Legislatures, City Councils) to persuade government officials to enact laws and regulations (automotive franchise laws), in exchange for campaign contributions, appeasing influential voting blocks or future jobs in the regulated industry. They also use the courts to tie up and exhaust a startups limited financial resources. This is the SHAM that the new car industry in America has become. They are nothing but a closet monopoly existing behind the protection of big government regulations. They have become parasites and you, the new car consumer, are the host. Americans once had the right to purchase their new cars manufacturer direct. This right was taken away from us by the NATIONAL AUTOMOBILE DEALERS ASSOCIATION when they lobbied for automotive franchise laws. Its time for Americans to demand to have their right to buy their new cars manufacturer direct RETURNED TO THEM! Support Elon even if you don't like electric cars or continue to bend over for your friendly neighborhood new car dealer.
Well written article. Ironically, if you replace Tesla with the word "beer", and you replace "Dealer Franchise" with "Beer Distributor", you get a similar situation where the same free market folks stack the deck against the free market
OMG, I LOVE THIS. Finally new car dealers and their powerful lobby, the NATIONAL AUTOMOBILE DEALERS ASSOCIATION, can no longer deny they are actively campaigning to stamp out electric cars. Americans are beginning to learn the ugly truth about why new car dealerships and their mouthpiece, the NADA are attacking an American success story like Tesla and trying to kill the nascent electric car industry. Its no secret that new car dealers make most of their profits on repairing and maintenance of gasoline vehicles. In some dealerships it well exceeds what they make selling them. Because of this these franchised dealers and the NADA have decided that because electric cars cannot provide this "ongoing" stream of income that they won't support them. As well, they have also decided for you that you should not own one. This isn't their only point of contention. New car dealers and the NADA also have a problem with how Tesla sells its cars. Elon did his due diligence well, he knew that new car dealerships would never properly represent electric cars much less his Teslas. For this reason Tesla will only sell its cars manufacturer direct, no franchised dealerships, no useless middlemen or their extensive markups. New car dealers and the NADA have seen this as an act of war. They are aggressively attacking Tesla in state courts trying to force Tesla to sell through their dealerships or else be blocked from being able to sell its cars. However, the legal battles have not gone as well as new car dealers or the NADA would like. At the heart of it all is the argument over the legality of Free Enterprise and Free Markets. If you're an American manufacturer then you should have the right to choose how to market and sell your product. After all America's economy is built upon the tenets of Free Enterprise and Free Markets. For new cars however, dealers and the NADA would conveniently disagree, (albeit discreetly, they don't want customers asking questions like, how it can be legal for them to be forced to buy retail and only through franchised dealerships or why the NADA lobbied to have had their right to purchase manufacturer direct taken away). In short new car dealers and the NADA for reasons of greed, don't want you to own an electric car and they don't want to ever allow customers to again be able to go around them and buy their new cars manufacturer direct. Tesla is of course, threatening to undo this.
Dealer associations need to be broken up so they can stop dictating that you have no choice but to buy cars directly thru them and only them. It stifles real competition and keeps us going back to dealers whose only mission is to get you to spend as much money as possible, period. They are not interested in putting you into the car of your dreams if it's not one of the ones they want to move at that moment. They also want to upsell you on every add on possible at hugely marked up prices to maximize their commission while not caring that you're $8000 under water when you drive off the lot. Take away their monopoly and they'll either straighten up or go away because people will have a choice whether to get ripped off or not. And when they sell you that extended warranty on your new car that comes with a 3 year/36000 mile warranty, you aren't actually getting the full 7 year/100000 mile warranty they sold you since you can't use it for the first 3 years or 36000 miles. So in reality you're only buying 4 years/64000 miles for that $3000 they charged you for something they kept telling you was 7 years/100000 miles, when it wasn't even close.
Good article showing how government interferes with the free enterprise model. The unanswered question is which party is mostly responsible for those laws on the States books?
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