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Elon Musk: To the People of New Jersey

teslamotors.com

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Re: Elon Musk: To the People of New Jersey

#271

Post by secabeen »

larrys wrote: post #84

"An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car." Well then what about BMW with bumper to bumper service as only one example. That's a high end car that you don't pay for service for (i…

BMW provides free service for 3 years, but few cars have major repairs during their first 3 years. The money in service is in the later years, when major repairs and maintenance occur.

Re: Elon Musk: To the People of New Jersey

#272

Post by gutnor »

oddevan wrote: post #98
smacktoward wrote: post #53

> The evidence is clear: when has an American startup auto company ever succeeded by selling through auto dealers? The last successful American car company was Chrysler, which was founded almost a century ago, and even they went bankrupt a few years ago, along with General Motors. Since the founding of Chrysler, there have been dozens of failures, Tucker and DeLorean being simply the most well-known. In recent years,…

You make a valid point. In Musk's defense, I can't think of any car manufacturers that have used direct sales on this scale, so while the correlation does not prove causation here, it doesn't disprove it either. He seems to simply be stating that this aspect of their business model (direct sales) is a key part of Tesla's business and one that he believes is essential to its survival.

Just wondering though, what is preventing them to sell a franchise of Tesla and just provide the seller the appropriate incentive - like keep a fraction of the sales. I suppose they still have the right to put some restriction to the franchisee like they do in the food industry ( like you will not see a McDonald selling KFC )

Re: Elon Musk: To the People of New Jersey

#273

Post by the_ancient »

vampirechicken wrote: post #245
mathattack wrote: post #231

Earlier quoted context omitted.

New Jersey has a lot of these strange laws. They also force you to have full service at the gas station. The lobbies force the issue.

The last time I was in NJ, the full-service gas there was the same price as the self-serve in suburban NY. Maybe that's changed, but given the hug number of commuters in NJ, I conclude it likely that holy hell would have been raised of full-serve was significantly more expensive.

last time a saw a full service station I was 5 years old

Get out a pump your own damn gas.... jeeze

Re: Elon Musk: To the People of New Jersey

#274

Post by joering2 »

stcredzero wrote: post #39
skore wrote: post #10

> An even bigger conflict of interest with auto dealers is that they make most of their profit from service, but electric cars require much less service than gasoline cars. There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car. Also, all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer, so no v…

An even bigger conflict of interest with auto dealers is that they make most of their profit from service I am old enough to remember what owning a car was like when things were changing away from mechanical devices one could understand and tinker with and becoming nondescript hunks of plastic you had to buy from a manufacturer. (I'm talking about the ignition system, as one specific example.) There was always a bit…

> An even bigger conflict of interest with auto dealers is that they make most of their profit from service

Musk is too smart to know hes comparing oranges to apples.

He is only partially right. I say to Mr. Musk - I will agree with your complain when you sell me your car for $18,000 - an average price for an average car in the US. Why it doesnt cost $120,000, like your models, you ask? Well, exactly because of what you mentioned: they use cheaper parts with less engineering that are bound to break faster and then they will make up some profit on the parts. That's why Mr. Musk, they profit from service on car that is TEN times less expensive than your car.

If you asking me I prefer to pay cheaper upfront and be able to treat it like a pair of shoes that I will be able to exchange for a newer model in 2-3 years, when this gets me bored or wears out.

Other than that -- always love to hear brilliant people sticking it out to the lobbyists and corrupted over-bureaucratized politicians! At this stage of things within US, Musk is sticking it to so many groups (building rackets "10-times cheaper than otherwise tax payers would've paid") and pissing off so many powerful people, that I wouldn't be surprised to see him dead sooner or later (although of course I wish him all the best!)

Re: Elon Musk: To the People of New Jersey

#275

Post by dmarkow »

the_ancient wrote: post #273
vampirechicken wrote: post #245

Earlier quoted context omitted.

The last time I was in NJ, the full-service gas there was the same price as the self-serve in suburban NY. Maybe that's changed, but given the hug number of commuters in NJ, I conclude it likely that holy hell would have been raised of full-serve was significantly more expensive.

last time a saw a full service station I was 5 years old Get out a pump your own damn gas.... jeeze

It's the same in Oregon. You're not allowed to pump your own gas even if you want to.

Re: Elon Musk: To the People of New Jersey

#276

Post by jusben1369 »

manmountain wrote: post #258
jusben1369 wrote: post #29

Musk is massively disingenuous and rather insulting to our intelligence. But he's a heck of a salesman and makes a wonderful car. Like many persuasive people he arrives at an answer and backs into rationale but makes it appear the other way around. I'll give you just one example. The law of the land in NJ is that you can't sell in NJ unless through a dealership. That's the current law. Those laws need to change to al…

Nice try, New Jersey auto salesman. Seriously, how can you be on the "we've got to enforce current law" side? It's so ridiculously anti free market that I'm sure all the Tea Partiers are having cognitive dissonance over this.

Hah! I'm objecting to Musk misleading us. And he is misleading us. Look at many of these comments and you'll see why. Grab the pitchforks and head to NJ!!

Re: Elon Musk: To the People of New Jersey

#277

Post by jessriedel »

jusben1369 wrote: post #91
jusben1369 wrote: post #29

Musk is massively disingenuous and rather insulting to our intelligence. But he's a heck of a salesman and makes a wonderful car. Like many persuasive people he arrives at an answer and backs into rationale but makes it appear the other way around. I'll give you just one example. The law of the land in NJ is that you can't sell in NJ unless through a dealership. That's the current law. Those laws need to change to al…

Here's another view worth reading: http://mashable.com/2014/03/12/new-jersey-tesla-dealers/

I really appreciate you being one of the lone voices here who doesn't just want to heap praise on Musk, and I definitely appreciate a link to a story that isn't one sided. But I have to say that it's not so simple as "Tesla was violating a law that is now going to be enforced", and that therefore the state isn't changing anything and therefore Musk is disingenuous.

Unfortunately, these sorts of laws are often vague and confusing, and boil down a lot to the state's (sometime capricious) choices about what to enforce and how. The governor's ability to direct the state's executive branch is widely and correctly seen as a huge power.

So the law is vague and requires the New Jersey Motor Vehicle Commission to fill in the detail. In fact, the NJMVC itself granted a permit to Tesla to sell cars in the state (as stated in your article). But now the NJMVC has reviewed that decision at a higher level and has decided it made a mistake

http://mashable.com/2014/03/11/tesla-new-jersey/

If permits are being revoked, that sounds like a change to me.

You can say that a proper interpretation of the law would have always led to that outcome, and that Tesla doesn't have a right to complain that the law is finally being enforced correctly. But that presupposes that laws have unambiguous pre-existing interpretations.

Although the text of the state code isn't changing, it seems clear to me that "the law"--as in the actual regulatory environment experienced by Tesla--is changing in a negative, albeit somewhat predictable manner. Was Musk glib in describing this in his letter? Sure. But I don't think it rises to the point of being disingenuous.

Re: Elon Musk: To the People of New Jersey

#278

Post by Edmond »

bane wrote: post #233

The truth is, car dealerships, which are mostly locally owned, are a way for a state to boost revenue capture and generate jobs. In New Jersey, not being able to pump your own gas is the same deal. Look at the economics of a Tesla dealership, for every car sold in New Jersey, how much of that money stays in New Jersey? And let's be honest, being a car salesman is not the most lucrative or respectable of trades. The j…

>It sucks, but if you were a legislator in NJ, would you rather Tesla's profit went all out of state to Tesla, or if your citizens could get a crack at some of it and have it circulate around in the local economy for a bit.

I was making a similar point earlier. In fact I wouldn't be surprised if over time we start seeing more laws passed to encourage more of the money citizens of states spend to stay in-state. I think this is going to become a serious concern over time, how are local economies going to thrive if we keep buying stuff online and all the major online companies are somewhere in SV?

Re: Elon Musk: To the People of New Jersey

#279

Post by oh_sigh »

andymcsherry wrote: post #253
oh_sigh wrote: post #249

Earlier quoted context omitted.

States impose different taxes on their gas. Presumably if NJ allowed self-pump, those prices would be slightly lower. However, in the grand scheme of things, the eliminating the payroll costs from the gas price in NJ would barely have any impact. At a normal gas station which is neither busy nor desolate, an attendant may be able to serve, let's say, 30 cars an hour. If they each get $20 worth of gas, and the total c…

$20 / ($20 * 30) = 3.3%

Woops! I downgraded my estimates and never updated my text :(

Re: Elon Musk: To the People of New Jersey

#280

Post by pawelk »

Edmond wrote: post #165
darkarmani wrote: post #134

Earlier quoted context omitted.

> I think we should start asking questions about economic value flow. If people live in one place yet all their economic activity is directed to some place on the other side of the country, what is the long term effect of this on their local economy? What do you mean? Isn't there economic value in owning a Tesla? Just because the money flows the other way doesn't mean there isn't value in owning the product.

The problem isn't with owning the Tesla but rather that the economic transaction involved in acquiring the Tesla would leave nothing to NJ (except perhaps sales tax). When you have a dealership, you have local folks working there thus some of the money that car buyers spend gets circulated locally, which would not be the case if all you have to do is point and click to get your car delivered. This is a serious concer…

> the economic transaction involved in acquiring the Tesla would leave nothing to NJ

As I understand the sales will shift completely from local venues to point and click only after the laws in question come into power. The stores that are about to become galleries do employ local folks and a sales ban may imply reductions on sales-related positions, right?

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