Iowa Department of Transportation Deems Tesla Test Drives Illegal

3 years ago by Eric Loveday 53

Request a Tesla Test Drive, But Not If You Live In Iowa

Request a Tesla Test Drive, But Not If You Live In Iowa

Maybe Residents Of Iowa Can Test a Tesla At Tesla's Fremont Test Track

Maybe Residents Of Iowa Can Test a Tesla At Tesla’s Fremont Test Track

As the Des Moines Register reported awhile back:

“Iowa joined a growing list of states tussling with Tesla Motors’ business model when it told the company to cut short three days of test drives…”

“The Iowa Department of Transportation said the test drives were illegal for two reasons: Tesla isn’t licensed as an auto dealer in Iowa and state law prohibits carmakers from selling directly to the public.”

We’re not going to go into detail in regards to the Iowa case (full details, including some foolish acts by the Iowa Automobile Dealers Association, in Des Moines Register article here), but rather we’d like to point out that this is far from the first time that Tesla encountered a test-drive issue similar to this.

We’ve heard stories of cancelled test drives from residents of several states.ย  In fact, in Michigan (where I reside) there was a scheduled test-drive event for the Model S that I signed up for, but it was called off the day before it was to occur due to…yep, you guessed it, some area automotive dealers who cried foul.

It seems that the automotive dealers association simply won’t stop whining over the Tesla direct sales model.ย  Don’t expect this to change anytime soon.

Tesla is at odds with the dealers.ย  This battle will likely last until Tesla either accepts the dealership model or wins in every state in which Tesla sales are deemed unlawful.

Source: Des Moines Register

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53 responses to "Iowa Department of Transportation Deems Tesla Test Drives Illegal"

  1. Foo says:

    What a bunch of babies. No worry, they will be spanked soon.

  2. Mike says:

    When your legislature is CORRUPTED by Oil…

  3. mrenergyczar says:

    Two words:Corn Ethanol.

    1. Foo says:

      Five words: Not enough land on planet.

      1. ClarksonCote says:

        Seven words: But maybe cellulosic ethanol could be viable.

        ๐Ÿ˜‰

        1. Foo says:

          We need all the water and land we can use (sustainably) for food, and even that is going to a problem. There are much better, more sustainable alternatives for creating energy for transportation and other needs. Bio-fuels are a dead-end sponsored by the oil industry.

        2. Jouni Valkonen says:

          Synthetic Diesel is cheaper than cellulosic ethanol.

        3. Lustuccc says:

          What do I win? ๐Ÿ˜‰ 13 words! : Ethanol is just another scupid way too keep us dependent on ICE motors.

      2. MikeM says:

        Hey, Haiku time! Here’s a 5-7-5 syllable:

        Corn ethanol sucks.
        Not enough land on planet.
        Y’all go electric.

        1. Foo says:

          You have done well, grasshopper.

      3. Priusmaniac says:

        There is more than enough if you limit the use to what is needed for a Rex like the one of the BMW i3. It is ok to be 99% electric and use some bioethanol for the 1% remaining.

      4. pete g says:

        I am half in agreement ethanol does not make sense when the average vehicle sold in the U.S. gets about 25 mpg. It would take at least an average fuel economy of 500 mpg to make sense.

        Meaning if 95% of the people decide to trade in their cars for EVs.

    2. Anderlan says:

      I don’t know if EnergyCzar is propping corn ethanol so much as he’s pointing out that Iowa legislators don’t favor Tesla because it can’t ever run on the stuff.

      (Yes, I agree that since PV is 10-100x more efficient at capturing solar energy than *any* biomass, then that means biomass should only be allowed to be a niche energy source.)

      1. MrEnergyCzar says:

        I was referring to the Corn Ethanol lobby influence in Iowa that doesn’t want cars that won’t burn corn ethanol…

      2. Priusmaniac says:

        We are going to need ethanol anyway to replace oil as the main source of base material for the production of Rex Fuel, plastics, rubber, pharmaceuticals, chemicals, paints and the like.

        1. Lustuccc says:

          ALL plastics account for only 6% of oil uses.

          1. Priusmaniac says:

            Yes, only 6%, that iswhy there is enough bioethanol to replace oil as base material to produce plastics too.

  4. Sylvain-Paul Cรดtรฉ says:

    I can understand the dealers. They have to pay for a license to sell cars and show them. The law applies to everyone.

    But Tesla could apply for a dealer license (open a small showroom and call it sales office) and be done with it. And if they don’t want to offend their own dealers, once they finished a test drive and the client wants to buy, send him to a dealer near his place!

    Besides, a dealer plate would let them do their own test drives on public roads.

    1. Foo says:

      No, the law originally protected established dealerships from their associated manufacturers opening up their own stores.

      Tesla has no established dealerships. The law does not apply. Tesla should be allowed to open up direct-sale stores anywhere.

      The dealerships are now stuck with a bad system (bad compared to the system Tesla would like to use), and are afraid of the competition that the other system would bring.

      So, they want to legislate (and/or claim the exist law applies) an advantage for themselves. “Understandable”, yes. Reasonable and fair, no.

    2. See Through says:

      Tesla simply wants to bend the laws everywhere for its own benefit.

      1. Scramjett says:

        And that is different from every corporation on the face of the planet…how exactly?

        Big Oil has been manipulating the law for its own benefit for nearly 100 years. So have the automotive companies. The only thing Tesla is guilty of is disrupting the status quo. Americans don’t value innovation, they value protectionism, which is why there is so much animosity towards Tesla and anyone else who disrupts the status quo.

        1. david_cary says:

          “Americans don’t value innovation”? Come on. Of course they do. Those in government are often afraid of change particularly when in regards to where their dollars come from.

          Government is the enemy here. Even a liberal can understand that.

          1. Steven says:

            No, lobbyists are the enemy. Well, more precisely, the weapon of the enemy… Entrenched corporations that try to eliminate competition is the enemy. The “Big Three” (or medium fifteen) Accept that each other exists, sure in an ideal world any one of them would love to be the “only one” but they basically need each other if only to watch one or another do something bold. If it succeeds, like the general layout of the modern car interior, they all copy it, if it fails, like three wheeled cars, they point and laugh.

            Tesla is not playing by their rules. They use an uncommon powertrain, and have a(n essentially) unique sales process.

            Personally, I’d say let the dealers associations have “their way”, sell “Charlie’s Car Emporium” a dozen cars, but at the same exact price that an individual could but them at, directly from Tesla. If they think they can do a better job at selling a car, let them. I’d bet that because of the dealer’s markups, customers would cross state lines to buy the cars, just as they are today.

            The dealerships will then cry that the cars are “unsellable”, but DMV registrations would prove otherwise.

      2. Foo says:

        The “laws” shouldn’t apply to Tesla. It has no dealerships to protect from manufacturer undercutting (which is the original purpose of the law).

        It is the dealerships who are trying to bend the law to cover Tesla, which makes no sense. All they are doing is stifling competition to their own advantage. Understandable, yes. But, it is cowardly and shamefully un-American.

  5. More earned advertising for Tesla. It’s a thing of beauty.

    1. Assaf says:

      +1

      …and casting them as the classic underdog against one of the most hated business types in America.

    2. Rick Danger says:

      It is, innit? ๐Ÿ™‚

    3. sven says:

      Test drives would be better advertising.

    4. Steve S. says:

      Exactly. It is a fun think to watch — to see the dealerships digging their own graves by showing how stuck in the past they really are. It would be crazy for Tesla to give in and set up dealerships, and end up looking like the stodgy old car companies.

  6. Time to do an Electric Car Guest Drive in Iowa. With all Teslas.

    Any Model S owners up for a road trip drop me a line…

    1. MikeG says:

      I think this would be a great way to protest this decision.

    2. Liz G says:

      I’m game. Just find me a 240 outlet to use.

    3. Al Pugsley says:

      All tesla owners sell Teslas wherever they go. A road trip to Iowa sounds like a great idea. Power to the people! Corporations are not people.

  7. I see an opportunity for a car rental company to offer Model S’s for people to rent by hour, or day. ๐Ÿ˜‰

    Expect most consumers looking to make a $70,000+ purchase would be happy to spend more than 15 min. to experience the vehicle. A couple hours is nothing compared to the cost of a car, about as much as a new tire.

    FYI: There are companies (eg: Tred.com ) that deliver a couple of vehicles for test drives where you live. (believe you get ~60-90 min). Sounds like this type of service coud not operate in Iowa, because they are not a franchise dealer. One advantage to their service is offering vehicles from competing brands for comparison.

    1. Anthony says:

      Exotic Car Rental by Enterprise Rent-a-car does this already – they have Model S RWD units available in my area. I was interested in renting a Tesla S AWD once they’re available for a weekend. I figured it would be $200+. But oh boy what a fun weekend.

  8. pete g says:

    What does it take to become a licensed dealership in Iowa?

    1. Lots of money, as to even apply you’ll need build a functioning dealership location. You’ll also need frinchise contract from any manufacture wishing to do business with. Plus, a number of other business licenses to actually do business. A fairly hefty hurtle to start a new dealership vs. growing an existing one.

      “To obtain a Motor Vehicle Dealer’s License to sell at retail in Iowa, you’ll need to establish a place of business that includes an office, a repair facility, and a display area.”
      http://www.dmv.org/ia-iowa/buy-sell/car-dealers/dealer-licensing.php

      1. Someone out there says:

        You need a dealership in order to apply for starting a dealership?

      2. MDEV says:

        And give money to the political campaigns

  9. Hov says:

    illegal to test drive a car LOL

  10. Phr3d says:

    Some of you seem more familiar with this stuff, so:

    IF Tesla were to open a shop in Iowa like the one in MN, offering warranty work and annual inspections, how does the sales tax work? i.e., when I get my ‘annual service’ at the Tesla ‘store’ in Minnesota, do I/they pay sales tax on that service? What about warranty work, does Tesla pay tax upon a replacement of a broken part, either labor only or parts and labor.

    Is That the behind-the-scenes issue?

  11. ffbj says:

    You really ought to give Iowa a try..just no Tesla test drives:

  12. Someone out there says:

    These laws drives me nuts! What happened to “free enterprise”? Free markets? It’s all corruption

    1. Steven says:

      Do a little research on these…

      Intel vs. AMD
      Microsoft vs. Digital Research
      WalMart vs. Every “mom&pop” in town.

      1. Someone out there says:

        What about them? Both Microsoft and Walmart has spent billions lobbying (bribing) politicians to make decisions in their favor. That’s not free market economy, that’s corporativism.
        Intel I don’t know too much about.

  13. Robert says:

    Maybe I should find a place in IOWA to bring EV Fest Electric Vehicle Show, near the border, and owners can offer rides, we cross the border, and Tesla waits with cars for people to get in the Drivers seat, after experiencing it from the passengers seat! ๐Ÿ™‚

    1. Jeff D says:

      I suggest Burlington, IA. That will be nice and close for me to show up.

  14. Mapper says:

    “”Independent dealers are aggressive in pricing against each other,” he said. “If you wanted to buy directly from Chevy or Ford, the price on the sticker would be the price.”

    As if. Stealerships prey on the poor and the ignorant, they don’t compete on price. Take any random vehicle, the price paid by consumers can vary by thousands of dollars in the same dealership for the same car. Nothing makes a dealer more excited than a poor, uniformed buyer – they will get fleeced.

  15. CherylG's_DirtyLittleSecret says:

    More Stealerships crybabies…..

  16. ffbj says:

    No just another example of how consumers pay more to collusion between politicians and business. I think is less price unfairness these days since so much information is available on the internet about reasonable pricing of vehicles. Of course the dealerships are always ready to get that credit you need, albeit at higher rates. Mostly though their service departments, which account for 80% of dealership profits, which is one reason Tesla frightens them so.
    Tesla cuts the unneeded middle man out of the picture.

  17. Sean says:

    I don’t understand why you need a license to sell car. As sales taxes are paid for and everything it doesn’t seem like a problem. These laws seem to limit innovation, One day I hope to purchase my electric car via amazon and get same week shipping via prime.

  18. Ryan says:

    Local Iowa and Minnesota Tesla owners have already rallied to host their own test drive events in response to this news!