New Jersey legalizes direct Tesla sales
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New Jersey legalizes direct Tesla sales
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Re: New Jersey legalizes direct Tesla sales
#2What prompted this law in the first place? Can someone from the US shed some light on this?
I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
Re: New Jersey legalizes direct Tesla sales
#3What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
Oh, it's easy. It's through things like regulatory capture, funding campaigns and thus having direct access to congressional workers, having people appointed to regulatory bodies that are partial to your stance and/or other means of influencing non-elected officials. Basically, if you can't beat them through normal market means, pass laws so they can't beat you.
Sounds cynical but take note, back when cars were first coming out the laws that were passed in response to them were designed to impede the adoption, not promote.
Re: New Jersey legalizes direct Tesla sales
#4What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
They're amazingly common in the U.S.
The idea is that car manufacturers would be able to undercut dealerships on prices and thus bankrupt the dealerships[1].
So it's just classic protectionism. The question why the law should protect entities that everyone hates is the baffling part.
Re: New Jersey legalizes direct Tesla sales
#5The NJ car dealers are extremely rich and powerful so this is quite a significant event. It's too bad that it takes something as exceptional as a Tesla to incentivize the public to fix the system, but at least it is happening.
Disclosure: I think my current car might be my last non-Tesla
Re: New Jersey legalizes direct Tesla sales
#6What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
The ban was created after Tesla started selling, and now it only lifted the ban for zero emission vehicles as far as I can tell (didn't read the whole bill). If Ford or GM wanted to sell direct, they couldn't.
In the more generic case, states have these laws on the books to protect the local franchise dealers. These people buy cars from a particular manufacturer, usually multiple brands. In order to protect these dealers from the perceived threat that an automaker could come in and sell direct (thus undercutting their business), laws were enacted to require a franchise to sell vehicles. Thus Ford couldn't come in and sell vehicles unless they created their own franchise, which would raise their costs to be on par with the independent franchises. I think the justification for the protection is the local jobs and businesses.
Re: New Jersey legalizes direct Tesla sales
#7What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
Basically, franchises arose because auto [Edit: manufacturers] didn't originally want to establish a broad set of factory stores. States then generally passed laws over time to keep manufacturers from coming in and competing with the franchisees because they'd have various advantages in doing so. (And it probably didn't hurt that the dealers by then were often well-established local businesses.) There's also been something of an anti-trust trend against vertical integration though that's really at the federal level so may not apply here (e.g. studios not owning theaters).
Re: New Jersey legalizes direct Tesla sales
#8What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
They're amazingly common in the U.S. The idea is that car manufacturers would be able to undercut dealerships on prices and thus bankrupt the dealerships[1]. So it's just classic protectionism. The question why the law should protect entities that everyone hates is the baffling part. [1] http://www.justice.gov/atr/public/eag/246374.htm
I'm no fan of car dealerships but a lot of the hate has to do with the fact that it's such a penny-pinching business (for both consumer and dealer) at most mainstream brand dealers. From what I've heard, if you go into a BMW dealer the experience is usually quite good.
But certainly I don't see why a manufacturer who doesn't have an existing dealer network shouldn't be able to sell in whatever way it chooses.
Re: New Jersey legalizes direct Tesla sales
#9What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
They're amazingly common in the U.S. The idea is that car manufacturers would be able to undercut dealerships on prices and thus bankrupt the dealerships[1]. So it's just classic protectionism. The question why the law should protect entities that everyone hates is the baffling part. [1] http://www.justice.gov/atr/public/eag/246374.htm
Everyone hates car dealers now, but at the time the laws were enacted; they made some sense. The problem isn't that we are protecting Ford dealers from Ford (given that the franchisee did have to pay Ford for the franchise). The problem is that Tesla never raised money through franchise arrangements and was/is getting shut out of the market anyway.
Re: New Jersey legalizes direct Tesla sales
#10What prompted this law in the first place? Can someone from the US shed some light on this? I just don't understand how you can ban selling what you manufacture to whomever you like outside of a planned economy.
Oh, it's easy. It's through things like regulatory capture, funding campaigns and thus having direct access to congressional workers, having people appointed to regulatory bodies that are partial to your stance and/or other means of influencing non-elected officials. Basically, if you can't beat them through normal market means, pass laws so they can't beat you. Sounds cynical but take note, back when cars were first…
In more plain language: car dealers (companies and their workers) lobbied for politicians to ban competition. They give campaign funding, and in exchange they get legislation like this ban.