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New Jersey legalizes direct Tesla sales

blog.caranddriver.com

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Re: New Jersey legalizes direct Tesla sales

#11

Post by themartorana »

grandalf wrote: post #5

The 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

Tesla didn't do anything really. Christie has national ambitions and knows that keeping Tesla out of the NJ market and bending over to support the current NJ regime won't play well on the national stage.

His story was different when Tesla was first banned. But then he wasn't running for national office.

Re: New Jersey legalizes direct Tesla sales

#13

Post by edvinbesic »

caw wrote: post #6
shiggerino wrote: post #2

What 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 dea…

"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."

Which is a damn shame. When shopping for a car every manufacturer currently has a 'build your own' tool online where you can build you car to spec and you get a rough estimate. However, in my experience, this estimate is never honored by dealers.

The last car I purchased had an item on the sticker price called 'Dealer improvements' that was $6000, and after talking to the dealer he would "cut me a break and not charge me anything" so I would be getting the car for $6000 less right off the bat. When I inquired as to what exactly did they improve he refused to answer in detail.

I'm sure my experiences are not unique. I would love to just press an Order button at the end of the vehicle builder and have it delivered to my door or somewhere close to my home.

Re: New Jersey legalizes direct Tesla sales

#14

Post by amalcon »

wheaties wrote: post #3
shiggerino wrote: post #2

What 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…

Your explanation doesn't really make sense.

Consider: who would benefit most from the removal of these laws? The obvious answer is the General Motors Corporation. They could own their own dealerships, getting better control of customer experience and a bigger cut of the profits. It's not like they're short on capital such that they would be forced to franchise anyway. As the largest automaker in the world for most of the last century, they would get a significantly outsized benefit compared to any competitor.

Now for a rhetorical question. Who has more political power in the U.S: car dealerships in aggregate or General Motors? Answer: General Motors, of course!

Another rhetorical question: Does Tesla have more political power in New Jersey than GM as well, given that the exception was carved out specifically regarding the type of vehicle they produce?

edit: New Jersey is no stranger to economic protectionism. They actually prohibit self-service auto refueling as a jobs program, which would seem to be more threatened by Tesla than car dealerships. I'm not trying to argue that it doesn't exist, just that it doesn't explain what's going on here.

Re: New Jersey legalizes direct Tesla sales

#16

Post by spiralpolitik »

caw wrote: post #6
shiggerino wrote: post #2

What 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 dea…

Car dealerships are also generally small family owned businesses. The kind that plays well in red states as being the heart of the American economy of self made people. They must protected at all costs from competition, ideas, and regulation that could put them out of business.

See Obamacare, eVerify, FMLA etc.

Re: New Jersey legalizes direct Tesla sales

#18

Post by bko »

This is great news. People often forget that dealerships often abuse their power and take advantage of consumers. This is especially true since purchasing a car is a large purchase with information asymmetry (although new resources have made this less true). It's especially appalling how dealerships often discriminate on race and gender [0]

I am disappointed that this move only applies to zero-emission vehicles but hopefully this will lead to future legislation undoing the protection granted to dealerships.

[0]http://islandia.law.yale.edu/ayres/Ayres%20Siegelman%20Race%...

Re: New Jersey legalizes direct Tesla sales

#19

Post by higherpurpose »

rcarrigan87 wrote: post #17

Can someone please shed some light on the arguments from the other side. How were these dealership protection laws ever justified by politicians?

"Jobs" is probably the "official" argument. If the middlemen go extinct, people will lose those jobs.

Re: New Jersey legalizes direct Tesla sales

#20

Post by ghaff »

edvinbesic wrote: post #13
caw wrote: post #6

Earlier quoted context omitted.

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 dea…

"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." Which is a damn shame. When shopping for a car every manufacturer currently has a 'build your own' tool online where you can build you car to spec and you get a rough estimate. However, in my experience, this…

Sounds like you need to go to different dealers. I'm no fan of the dealer experience but I have gotten prices and costs online and certainly never had a dealer try to tack on $6K. Maybe it was some particularly in-demand model. At least one dealer I've bought a car from has been "no haggle"; the price on the sticker was the price.

The problem with getting rid of dealers is that most people will still want somewhere to test drive, someone local to handle paperwork, and there would need to be a service network in any case. Tesla will still have dealers. They'll just be owned by the company. And the experience will doubtless be comparable to existing high-end car dealers.

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