Tesla Skipped NAIAS Because It Can’t Sell Cars In Michigan

1 year ago by Mark Kane 54

Tesla Model X

Tesla Model X

NAIAS

NAIAS

Many of us would’ve loved to see the Tesla Model X at the 2016 North American International Auto Show, but that didn’t happen.

Tesla never seems to show much interest in major auto shows – we probably attend twice as many ourselves (they recently skipped the Los Angeles Auto Show too), but in case of 2016 NAIAS, Tesla says it didn’t appear with latest model because the automaker can’t sell its cars in Michigan.

That was the main reason, according to the Diarmuid O’Connell, Tesla’s vice president of business development:

“The reason we’re not at Detroit this year relates to the issue here.”

“We use shows to sell cars, and this is a show in Michigan.”

“If we can’t sell cars here then why would we be marketing cars here? You know, it’s many factors but it relates specifically to that.”

Truth be told, Tesla’s hype and coverage in the media has created enough demand so far that they really don’t need auto shows to show off their products. Absence at NAIAS could be used as an argument to draw attention to the problem of direct car sales.

The good news is that Tesla will be present in March in Geneva – Switzerland, and that’s when we should see the Tesla Model 3…we hope.

Source: MLive

Tags: , , , , , ,

54 responses to "Tesla Skipped NAIAS Because It Can’t Sell Cars In Michigan"

  1. Tim says:

    “The good news is that Tesla will be present in March in Geneva – Switzerland, and that’s when we should see the Tesla Model 3…we hope”

    Tesla models Apple and google not GM & Ford they dont show big things at car shows they have their own event so they can show off their members only jackets. Tesla likes being the “hey look this is new” and they would rather not share the spotlight with anyone else.

    1. Pushmi-Pullyu says:

      Tim said:

      “Tesla… they dont show big things at car shows they have their own event so they can show off their members only jackets.”

      I think that’s the primary reason, too. If it’s a big pond, you need to be a big fish to be noticed. A smaller fish needs a much smaller pond if it wants to stand out.

      1. TomE says:

        I’m pretty sure Tesla is no longer a small fish… Many a auto-show would be disappointed to not have them present, which speaks volumes.

  2. Anon says:

    Thank the big three and corrupt politicians for lobbying against Tesla’s direct sales model.

    BTW: How’s that water in Flint?

    1. Steven says:

      Undrinkable.
      In Detroit, all is well.

      You can see where their priorities are.

    2. Norman Sanford says:

      Michigan State law requires automotive manufacturer’s selling cars within the state to have dealerships within the state. We can thank a Republican Governor for the Flint water problem but Detroit water is and always has been Excellent!

  3. Mister G says:

    GO TESLA GO…Michigan can kiss your arse…LOL

  4. Josh says:

    Since Geneva is the beginning of the month, there is no chase of Model 3 being at the show.

    There is a decent chance that Model X could make an appearance though.

    1. kdawg says:

      We know it will be revealed in March, and it won’t be at a show in the US, so that leaves us with these to choose from:

      Geneva Motor Show

      Calgary International Auto & Truck Show

      Cairo International Motor Show

      Vancouver International Auto Show

      Bangkok International Motor Show

      1. s says:

        You forgot the Elon-Musk-will-show-it-wherever-and-whenever-the-f#@%-he-pleases non-international Tesla-only Fremont/Hawthorne auto show.

        My bet is on that one

        1. KUD says:

          I agree that’s the one

          1. kdawg says:

            A little bird told me it would be an an auto show, and not one in the US.

            1. Josh says:

              It might attend an autoshow, but the reveal will not be at an autoshow. At least according to posts on TMC.

        2. Trollnonymous says:

          ROTFLMAO…..
          😛

        3. TomArt says:

          ROTFLMAO!!! I’m sure that will be the case.

  5. Ed says:

    Tesla should have said that was the reason when they said they weren’t coming, rather than the comment about product cycles. It would have gotten much more publicity for shaming of the Michigan legislators and governor.

    Either that or just take a small booth with a sign “Made in the U.S.A. Banned in Michigan.”

    1. mike w says:

      I like your idea for the sign.

  6. Jake Brake says:

    That and if they used NAIAS to release the model 3 they would look silly trying to compete for attention with a minivan.

  7. No show for Tesla in San Diego, with a 3 million people market.

    Many or most of these auto shows are put on by the auto dealer association. Thhat was the primary reason.

  8. They also knew that they would be overshadowed in the EV space at the show by Chevy and the Bolt. Unless they unveiled the Model 3 there, which they aren’t ready to, they would be second fiddle to Chevy so it wouldn’t be a good show for them in any event.

    Chevrolet is bringing the “200 mile $30,000 EV” to market at least a full year before they do. They didn’t want any part of the Chevy EV party that was happening at NAIAS.

  9. Three Electrics says:

    If I were Tesla, I would have used their booth as a platform to encourage attendees to push their legislators for change in Michigan. A missed opportunity.

  10. kdawg says:

    ““We use shows to sell cars, and this is a show in Michigan.”

    “If we can’t sell cars here then why would we be marketing cars here? You know, it’s many factors but it relates specifically to that.”
    ———
    The problem w/this logic is that the NAIAS draws people from all over the world. It’s not like only Michigan people go there. In fact, on the first public day, I’d say most people are from outside the US.

  11. Loboc says:

    Tesla didn’t go there because it costs a crap-load of money.

    The ‘I’ means ‘International’. There is no ‘M’ for Michigan-only customers.

    1. John in AA says:

      No, but the walk-in traffic during the main part of the show must be mostly local. Sure, the people at the press-only and VIP parts will be from all over, but they’ll also be in Geneva and whatnot.

  12. Sunpowered says:

    Can anyone name another legal product that me as a consumer can’t buy. Why is it that the dealers have a right to dictate what I can buy, test drive or look at in my own state. F-them and the crony politicians. I will never buy another vehicle from a dealership.

    1. mr. M says:

      Some biotoxic stuff maybe? Some medicine might also be restricted to Europe/Asia only and not for sale in the US.

      And of course the hughe import taxes on foreign trucks (ala F150) prevent a lot of sales.

    2. Steven says:

      It makes me wonder who’s more corrupt, the Dealers Association or the Michigan legislature.

    3. Mister G says:

      We need to amend the US Constitution to allow the right to electric vehicles.

    4. Agreed, any interference in the free market is crap, to put it plainly. So write your legislators and governor. Especially those of you who live in Michigan, write them. Their email addresses are easily accessible online and you would be amazed at the response you might get. If 1000 Michigan residents write the governor and their state reps that would get some attention. If 10k do it you might get a bill sponsored. If 100k do it you would be able to buy a Tesla there in less than 12 months.

  13. Tech01x says:

    It is not clear that it would be legal at this point for Tesla to show in Michigan… Certainly, they could not do anything that could be construed as selling in Michigan.

    1. JeremyK says:

      Tesla was at the show a couple years ago, showing off the Model S. Nothing has changed since then.

      I think, as somebody else stated. Autoshows cost a LOT of money. That and Tesla doesn’t have any Model Xs to spare.

      1. dRanger says:

        “Tesla was at the show a couple years ago showing off the Model S and nothing has changed”. Actually, much as changed in Michigan since then. The Michigan legislature changed the law to shut out Tesla in October of 2014. The change was so sweeping it even banned service centers. Seems to me Tesla is fully justified in its attitude and with the shift of car technology toward Silicon Valley, who needs Detroit?

  14. KUD says:

    I don’t know about the Michigan show, but in DC Tesla isn’t allowed as the show is run by the Dealers association.

    1. TomArt says:

      Tesla Motors is fine in DC. They opened a store/service center there – not a showroom, a store – on the corner of 10th and K. I saw the Roadster there, and I saw the Model S prototype and sat in a Model S Alpha there. It’s been a while since I went there, since there are showrooms nearer to me, but I’m fairly certain that it is a sales location.

      Now in Virginia, where I live, they have showrooms and service centers, but no sales due to these franchise laws.

  15. TAP says:

    There are independent dealers in MI which sell multiple franchises, such as Jack Cauley, who sells Ferarri. If Tesla’s product is so good, they could work with such niche dealers. This is not about some better experience for consumers, this is about Tesla keeping their profits as high as possible by not having to use dealers.

    1. Pushmi-Pullyu says:

      Most car buyers’ experience in dealing with car dealers is quite negative. Mine certainly has been!

      One reason that Tesla scores so very high in customer satisfaction ratings, in Consumer Reports surveys, is that Tesla’s customers do not have to deal with dealers. Why in the world would Tesla want to change that? And why in the world would Tesla car buyers want to have to deal with a middleman adding to the price, but not adding to the value, of a car?

      I certainly hope that Tesla can stick with the direct sales model, as it grows in size from a small auto manufacturer to a medium-sized one. This will be contrary to analysts’ predictions, but then they were wrong about Amazon.com too.

    2. TomArt says:

      No, it’s about the fact that dealerships make their money from service of ICE-based vehicles. So, for a dealer of EVs to survive, they have to either a) mark up the MSRP, and/or b) gouge for service packages and push short service intervals. Obviously, none of those options are favorable for the brand or the customer.

  16. ModernMarvelFan says:

    Well, I don’t get the logic.

    If Tesla can’t sell car in Michigan, then Tesla needs the show even more.

    Does Tesla need customers or customers need Tesla?

    Sometimes I find the arrogance of the Tesla disturbing.

    Yes, the Michigan laws and dealer laws are wrong here. But this is an international auto show that would have media coverage from all over the world.

    Making lame excuses doesn’t look good on Tesla.

    1. John in AA says:

      Lame excuses? Makes sense to me. There are press events and car shows the world round, NAIAS is but one of them. It’s not like Tesla lacks for press coverage, and it makes every kind of political sense for them to financially punish (albeit in a small, symbolic way) a state that slapped them in the face. If they have any sense, they’ve made it clear to the organizers of the event why the revenue was lost and what legislators are at fault.

      1. ModernMarvelFan says:

        “NAIAS is but one of them”

        It is the LARGEST autoshow in North America.

        “they’ve made it clear to the organizers of the event why the revenue was lost and what legislators are at fault.”

        Since Tesla sells so few cars, like the organizers “care”.

        At the end, who is losing more? The State of Michigan or Tesla who can’t sell more cars?

        Does organizer need Tesla’s entry fee more or does Tesla need the customer who pays for the car more?

        1. John in AA says:

          What does sales volume matter to the NAIAS organizers? They’re selling square footage in Cobo, not cars.

          Given that Tesla is still said to be volume constrained (yes I realize there is some debate about this for S, but the smart money continues to say so), I think the answer is that the state is losing more. I say this as a resident of same.

          There are simple market-based answers to most of your questions. Sorry they don’t align with the MMF party line.

          1. ModernMarvelFan says:

            “What does sales volume matter to the NAIAS organizers”

            What does sales in Michigan has anything to do with NAIAS organizer which isn’t in charge of the law?

            So, it is okay for Tesla to “throw a fit” to make a statement but not okay for NAIAS to care less about Tesla?

            I guess since it doesn’t fit your Tesla fan club party line, you don’t need to argue anymore with me since I won’t play to your so called “Elon Musk party line”…

            1. John in AA says:

              No, I don’t need to argue with you any more because reading for comprehension isn’t your strong suit. But nice try!

              1. ModernMarvelFan says:

                “No, I don’t need to argue with you any more because reading for comprehension isn’t your strong suit. But nice try!”

                Since you like to resort to insult, maybe you should go smell more Elon’s fart before you post again since you lacked some emotional in your defending of your savoir…

  17. Get Real says:

    Well this might come as a shock to you MMF, but Tesla has no problem selling every car they can make which is why Tesla is the #1 seller of EVs in the US for 2015.

    Tesla’s mission is to accelerate the transition to sustainable transportation. They are doing this by forcing the laggard OEMs to build compelling long-range EVs or risk losing market share to upstart Tesla. This is why GM built the Bolt. They saw what Tesla has done to Mercedes market share in large luxury cars and they don’t want that to happen to them in the midsize class.

    Tesla is the preeminent disrupter of the auto industry and they did this by not playing by the same old tired methods like auto shows or dealerships.

    1. ModernMarvelFan says:

      “Well this might come as a shock to you MMF, but Tesla has no problem selling every car they can make which is why Tesla is the #1 seller of EVs in the US for 2015.”

      If it doesn’t, then Tesla certainly doesn’t need Michigan then. Why make a big stink about it?

      For all Elon cares, he could skip every single auto show in the world since he already got all the media coverage his wants with his twitt.

      Why are you trying to make a big stink about it with my “negative statement” against it? What, it doesn’t follow your Tesla fan club guideline?

  18. Dr. Steelgood says:

    What I have learnt from this forum is that obviously each of the US states has its own laws about which cars are allowed to be sold at which conditions. For me as a German (and global) citizen this is far beyond my imagination and reminds me at mideval ages. Here in Duesseldorf, we have even two Tesla locations. Perhaps, Elon should take over the Flint works for his mass production of model 3, and thus kill three flies with one strike – as we say in Gernany – Including Flint’s unbelievable water quality.

    1. ModernMarvelFan says:

      ” each of the US states has its own laws”

      It is called “United States” for a reason. =)

    2. TomArt says:

      Hey, Doc, here’s the scoop:

      States cannot pass laws that interfere with interstate commerce, such as: they cannot print their own money, must accept US currency…cannot levy tariffs against goods and services from other states, or ban the sales thereof…and so forth.

      These dealership-only sales laws for automobiles push the limits of the Interstate Commerce provisions of the Constitution.

      The technicality lies in the fact that these laws banning direct sales do not ban the sale of the product. These laws limit how the products may be sold. Specifically, these state laws ban automobile sales by the manufacturers – automobiles can only be sold through third-parties (like the franchise dealership model).

      There is another point that weighs in on this issue: if you buy a Tesla in Maryland (direct-sales legal), but you live in Virginia (direct-sales not legal), Virginia cannot stop you from owning your Tesla, nor can Virginia prevent you from registering your Tesla in Virginia (most vehicles, like automobiles, are required by law to be registered).

      Nobody has challenged the laws directly in court yet, as far as I know, so the Constitutionality of the laws will not be decided by the US Supreme Court until a lawsuit gets that far in the court system.

      1. Dr. Steelgood says:

        TomArt, I appreciate very much your detailed reply – instead of just posting “+1” or “-5”. It helps me to better understand the US business mentality in general and many posts here concerning the dealership issue.

        1. Mister G says:

          Dealerships are very powerful and have effective lobbyists, that is why Republican politicians continue to deny global warming.

        2. TomArt says:

          You’re welcome. Those are the key critical distinctions, as far as I know, that keeps the laws from being unConstitutional outright. That’s why they currently stand, and possibly why they have not been challenged yet.

          The issue also dances around anti-trust laws, which prevents economic traps like monopolies. The dealership owners, though, are not state-wide or nation-wide. NADA is just a lobbying firm. They do not own or operate the many thousands of franchise dealerships. Many of these dealerships are family-owned, where they only own a handful within a certain area, and there are other dealerships selling competing products from other automakers in those same areas. There is no single entity that you can say is taking over the market of selling automobiles.

          I’m not an expert in Constitutional law by any means, so there might be legal precedents that already address the legality of strictly limiting the manner in which any particular product or service may be marketed and/or put up for sale. Not sure.

          1. TomArt says:

            correction: “…might be legal precedents that already address the Constitutionality of a State to strictly limit the manner…”

    3. TomArt says:

      Public water quality – well, that’s another issue…again, State laws do not supercede Federal law. If Congress passes laws that set minimum requirements, then it is the President’s responsibility to enforce those limits, and no State is permitted to establish standards any lower than Federal standards.

      With these water quality issues, it is a matter of enforcement. At the Federal level, a sufficient number of “conservative” politicians in Congress have been able to either weaken the minimum requirements through subsequent laws, delay the implementation of new requirements, or if all else fails, weaken the EPA’s ability to enforce the laws by cutting funding in the annual Federal budget (the Environmental Protection Agency is responsible for enforcing environmental laws passed by Congress).

      Because these so-called “conservative” politicians also pull the same stunts at the State level, then you end up with substandard public water supplies – weakening laws plus cutting funding for enforcement is cruelly effective, not to mention shooting ourselves in the feet at every turn. Shameless whores.