New Jersey legalizes direct Tesla sales • Hacker News Board

Re: New Jersey legalizes direct Tesla sales

#41

Post by krschultz » Thu, Mar 19, 2015, 1:53 PM UTC

twoodfin wrote: post #38

themartorana wrote: post #11

Earlier quoted context omitted.

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.

His story was different when Tesla was first banned. But then he wasn't running for national office. That was 11 months ago. I'm pretty sure Chris Christie's political ambitions haven't radically altered in the meantime. The original "ban" was a perfectly reasonable reading by a regulatory body of the existing law. Regulatory bodies shouldn't be in the business of rewriting unpopular laws; that's the legislature's jo…

"Regulatory bodies shouldn't be in the business of rewriting unpopular laws; that's the legislature's job, which appears to be what happened here."

Thank you. This point needs to be made 100x more often. These days it seems that the regulators & judges bail out the legislatures mistakes all too often. The onus is on people to convince their elected representatives to rewrite laws that are flawed or outdated.

Re: New Jersey legalizes direct Tesla sales

#42

Post by rayiner » Thu, Mar 19, 2015, 1:55 PM UTC

MollyR wrote: post #40

rayiner wrote: post #32

Earlier quoted context omitted.

The regulatory capture argument someone made below is hard to square with the history: http://www.americanbar.org/publications/franchise_lawyer/201... . At first, cars were sold directly to consumers by manufacturers, and independent dealerships were rare. It's really hard to explain using a regulatory capture or lobbying model how car manufacturers, huge incredibly profitable companies at the time, lost their bid to…

That was very insightful. In reference to local car dealers part. So states were mainly only interested in the money, but then justified it under the guise of consumer protections. Is that fair to say ? Or did states really care about consumer protections ? And in the pursuit of truthiness, and not creating a false dichotomy, are both those wrong ?

To get legislation like this passed, you build a coalition. So the consumer protection angle isn't just a guise so much as it is an angle to get the support of consumer-minded legislators.

As for whether these justifications are wrong--it's hard to say. From a jobs point of view, it's probably still not a win for NJ for those dealerships to shut down and have NJ money flow over the internet directly to California. The consumer protection angle is a lot weaker in a day and age where Tesla can monitor your car's stats over the internet.

Re: New Jersey legalizes direct Tesla sales

#43

Post by jessriedel » Thu, Mar 19, 2015, 1:56 PM UTC

rayiner wrote: post #32

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 regulatory capture argument someone made below is hard to square with the history: http://www.americanbar.org/publications/franchise_lawyer/201... . At first, cars were sold directly to consumers by manufacturers, and independent dealerships were rare. It's really hard to explain using a regulatory capture or lobbying model how car manufacturers, huge incredibly profitable companies at the time, lost their bid to…

I don't think the possibility that the original laws were motivated by good intentions conflicts whatsoever with the hypothesis of regulatory capture today. Industries have been using outdated laws to build barriers to entry since time immemorial.

Re: New Jersey legalizes direct Tesla sales

#44

Post by scott_s » Thu, Mar 19, 2015, 1:56 PM UTC

qwerunf wrote: post #37

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 Planet Money podcast did a fantastic episode answering your exact question: http://www.npr.org/blogs/money/2013/02/12/171814201/episode-...

I was going to post this, too. rayiner's answer in this thread is also excellent, but this episode of Planet Money gives much more historical background.

Re: New Jersey legalizes direct Tesla sales

#45

Post by mr_luc » Thu, Mar 19, 2015, 1:58 PM UTC

rayiner wrote: post #32

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 regulatory capture argument someone made below is hard to square with the history: http://www.americanbar.org/publications/franchise_lawyer/201... . At first, cars were sold directly to consumers by manufacturers, and independent dealerships were rare. It's really hard to explain using a regulatory capture or lobbying model how car manufacturers, huge incredibly profitable companies at the time, lost their bid to…

Sure, they didn't originate with regulatory capture.

But the actions to prevent Tesla from selling direct now, today, have definitely been the result of regulatory capture.

The original interventions created a kind of local businessman, who knew he owed his existence to these local regulations.

And now that these laws have been made unnecessary due to the availability of both information and exposure -- and incontrovertibly unnecessary in the case of for instance a large city or densely populated state, where healthy competition exists -- the reason that they hang on and prevent companies from Tesla from opening shop is absolutely regulatory capture.

Re: New Jersey legalizes direct Tesla sales

#46

Post by raldi » Thu, Mar 19, 2015, 1:58 PM UTC

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.

Lots of lobbying by special interests who stood to make a lot of money by preserving the middleman-filled status quo.

Re: New Jersey legalizes direct Tesla sales

#47

Post by jaxbot » Thu, Mar 19, 2015, 2:00 PM UTC

bko wrote: post #18

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 h…

On the other hand, this could be an incentive to purchase zero-emission vehicles instead of the alternatives, as the buying experience would be theoretically much better than that of going to a traditional dealer.

Re: New Jersey legalizes direct Tesla sales

#48

Post by raldi » Thu, Mar 19, 2015, 2:01 PM UTC

amalcon wrote: post #14

wheaties wrote: post #3

Earlier quoted context omitted.

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…

> Who has more political power in the U.S: car dealerships in aggregate or General Motors? Answer: General Motors, of course!

What makes you so sure?

Re: New Jersey legalizes direct Tesla sales

#49

Post by msandford » Thu, Mar 19, 2015, 2:01 PM UTC

TheHypnotist wrote: post #39

mikkom wrote: post #34

Earlier quoted context omitted.

Why would you need any kind of such laws in a free market?

Because they would easily put franchise dealers out of business.

Also because the franchises weren't sold with an expiration date so for the manufacturers to start selling direct might be some kind of a breach of contract. But it'd take FOREVER to play out in the courts, and made worse by the fact that it's a national thing so you might not be able to consolidate it all down to one case in one federal court. It might be 50 class action suits in 50 states with several different outcomes.

Re: New Jersey legalizes direct Tesla sales

#50

Post by ck2 » Thu, Mar 19, 2015, 2:04 PM UTC

Does Tesla do free firmware upgrades for all owners, regardless if they are the second, etc. owner?

Because that is another thing that will crush dealers. Gas car manufacturers will not update ECU software unless the car is either in warranty or its an actual recall.