Dealerships + Crony Capitalism = Sorry Tesla (Video)

MAR 19 2014 BY ELECTRICCARSTV 30

Take the US’ dealership model and combine it with crony capitalism.  The result is “sorry Tesla,” according to The Young Turks:

tesla new jersey

Tesla’s Battle in New Jersey Has Grabbed Headlines Around the Globe

“If you want to buy a Tesla in the Garden State, after April 1 you’ll have to try your luck somewhere else.”

Tesla’s battle in New Jersey has made headlines internationally now, with outlets around the globe publishing articles on the topic.

As The Young Turks state:

“New Jersey regulators caved to pressure from car dealers and decided on Tuesday to ban automakers that want to sell directly to customers from doing so in the state. The New Jersey Motor Vehicle Commission rushed through a rule change and voted 6-0 to adopt this new regulation that mandates that all new car dealers get a franchise agreement if they want a state license to sell cars in New Jersey.”

Rightly so, the shady actions in New Jersey has drawn even more attention to governor Chris Christie, who probably now wishes he had sided with Tesla on this one.

Source: The Young Turks

Categories: Tesla, Videos

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30 Comments on "Dealerships + Crony Capitalism = Sorry Tesla (Video)"

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Worst captioning ever…

But it’s good to throw some light on the cockroaches preventing the sale of American made goods in the US.

Hopefully competition between dealers will be allowed so consumers are not forced to pay excessive amounts for factory authorized service.

Consumers being charged $600 per year for routine, scheduled maintenance on an EV is amazing. Allowing independently owned dealerships to compete for this business would drive the price down. Monopolies are not good.

Last I heard, Tesla back-peddled on that $600 service requirement. That was after huge amounts of negative consumer feedback. Now it is optional and independent of warranty coverage.

CherylG has been informed before, but will still not accept the facts. She enjoys trolling too much to concede to mere reality…

How in the world is that a monopoly!? If Tesla was the only American car company and the US didn’t allow imports then that would be a monopoly. I don’t know how many times I’ve had to make this argument with people that defend the dealership franchises as a model that protects the customer from the big bad manufacturer. If other companies were allowed to sell direct to customers then it would be fair competition between manufacturers for product quality and service. If one didn’t like Tesla’s $600 fee for service and software updates then guess what, they would simply choose to buy a car from another manufacturer. This is how the free market works with every single other product in the world. So is Apple a monopoly? Could you imagine how stupid it would be to try to make an argument that the customer would be better off if Apple was forced to franchise out their stores. So you would go down to the mall and at one end would be John Johnston’s Apple World and at the other end of the mall would be Callahan’s Apple “We’ll beat any deal in town”. Do you really think this would… Read more »

And another point anti-Tesla CherylG misses is that it is not Tesla’s goal to make any money on service, whereas dealers rely on making money from service.

Also, an EV does not require much service.

I completely agree with everything you said, except:
“Do you really think this would give the customer a lower price and better service than what Apple already offers? No of course not. ”
And even then, I agree with you in principle.

Apple could charge more if you could not buy their products anywhere else, but even then there would still be competition due to similiar devices from other firms.
And Apple has the choice to see both directly and indirectly, unlike the car companies.

Oh, and CherylG either is a troll or does not understand what a monopoly is.

“Dealer competition” hasn’t done anything to lower the cost of BMW service. The rates are set by the manufacturer and only marked up, not down.

If you want to get a better price on service, you need to find a non-dealer mechanic. There is nothing stopping anyone from opening a Tesla mechanic shop, they just wouldn’t have much work to do.

I see absolutely no advantage of a traditional dealer over Tesla retail and service centers.

You should get your facts straight! Annual service is NOT mandatory but recommended, besides, where did you get $600/yr from? Sadly, dealerships thrive on people like you, one obviously bad with numbers.

Yeah sure I paid $900 for the break pads (rear)of my jaguar XK. Dealership service is a reap off and your effort to spin this 100 year fact is useless. Very educated people comment in here sorry.

Notice how the liberal/progressive commentator from the liberal/progressive Young Turks channel chooses to blame only the republican Chris Christie, while absolving the democrat-controlled legislature (that actually writes the laws) from any responsibility.

The law is certainly stupid and destructive crony capitalism, but it is not conservative republicans that favor such laws. Christie is often accused of being a liberal republican (aka “establishment republican”, aka “moderate republican”, aka “RINO”) which is why he is disliked by many conservatives. So it would not surprise me if Christie is secretly in favor of this law. But being the clever career politician that he is, he won’t really say.

The NJ Motor Vehicle Commission != NJ State legislature.

This was a rule change approved by the Motor Vehicle Commission, not the legislature.

4 Motor Vehicle Commission members are appointed by the Governor. Three members are members of the Governors cabinet. The eight member is the Acting Chief administrator, who happened to be appointed by Chris Christie.

That’s exactly what happened. That’s why Tesla was taken aback because they thought they were working with the administration for some compromise that would go through the legislative process. I’m guessing it was looking pretty good for Tesla in the legislature so the Vehicle Commission quickly stepped in and torpedoed it.

Yes, we heard Christies whine about the fact that people should blame the legislature. But the misleading part of that is that if you want to assert that, then they should be blaming some legislature from the 1920s or something like that because that is when these laws came about. Christie could have said “I plan on changing these laws.” . . . but he didn’t. Why not?

Why not? I don’t know. Maybe Christie is a big fat EV-hating idiot. Or maybe he knows the (supposedly EV-loving democrats) in the legislature won’t budge, and he doesn’t want to battle them on Tesla’s behalf. Christie did say Tesla had a FULL YEAR to work with the legislature to get the law changed, yet apparently nothing was accomplished in that time. Why not? If Christie lied about that, I’m sure Elon would have called him out. And Elon is clearly aware that the law exists and needs to be changed/clarified, because that’s what he wrote in his letter: “Many decades ago, the incumbent auto manufacturers sold franchises to generate capital and gain a salesforce. The franchisees then further invested a lot of their money and time in building up the dealerships. That’s a fair deal and it should not be broken. However, some of the big auto companies later engaged in pressure tactics to get the franchisees to sell their dealerships back at a low price. The franchisees rightly sought protection from their state legislatures, which resulted in the laws on the books today throughout the United States (these laws are not present anywhere else in the world).” As… Read more »

>>”I don’t really understand how this commission fits in”

It might be important to learn that before posting things that aren’t true.

What was untrue? The legislature passes laws. In this case, stupid laws.

The commission just grants licenses. An illegal act is illegal regardless of whether some commission gives you a license. So the commission is irrelevant.

Christy cannot fix the stupid law, nor can the commission. If they told Tesla otherwise, they were being stupid or dishonest. Only the Democrat-controlled legislature can fix the law. Apparently your blind loyalty to the Democrat party is preventing you from seeing that fact. Since I disapprove of both political parties, I can see things more clearly.

Purposely mis-pronouncing a DemocratIC legislature is a sign you are a flame throwing partisan, and a 5th grader too. You can’t be taken seriously.

I don’t really understand your comment, so I can’t tell if it’s directed at me or the commentator in the video.

You.

I don’t see this covered enough. The NJ law in question forbids franchisers from selling direct. Tesla is not a franchiser and never has been.

The rule change in NJ is contrary to the law, so the legislature has nothing to with it. This is nothing more than Christie and cronyism working to pay back his bribes.

Perhaps Tesla should just continue selling in New Jersey, provoke a lawsuit, and then challenge the law in court.

Does the law state all car manufactures must be franchisers? Does the law state a dealer license will only be issued to dealers who have paid to join a franchise? Do “Used car” shops in NJ need to join a franchise before they can get a dealer license? I’m confused. Laws made to confuse people should be abolished.

NPNS! SBF!
Volt#671

This whole dealership fight is a win, win, win for Tesla.

Win 1) It is constantly in the news giving Tesla massive amounts of free press and publicity to Tesla.

Win 2) The people are behind Tesla on this one. Some people back Tesla as the cool electric car company. But even those conservatives that hate electric cars generally back Tesla on this because everyone hates car dealers and the dealership association is basically just a cartel trying to protect their business.

Win 3) Because Win 2, Tesla will eventually win this fight and thus increase margins by eliminating the dealer.

They are going to milk this as long as they can.

+1

The car dealers and government cronies will eventually be outed as the greedy, anti-American fools that they are.

This is not anything new; it’s called controlling the market and is the first thing large companies try to do. It’s why you now only have five oil companies, three large American ICE car companies and why the airlines are consolidating. There is nothing fair about our capitalist economic system; it all runs on greed. My hope is someday Tesla owns GM, Ford and Chrysler and I would like to see them start today with that as a goal. With Musk at the helm, I believe the American people would have at least a fair deal when buying automobiles.

You forgot only 6 major media outlets. So, what we know is very limited too.

+1 to Lad

The same corruption is happening with medical help. Doctors and laws make it required to go through them, rather than get help via other means like reading on the web.