Missouri Auto Dealers Attempt Sneak Attack On Tesla

MAY 8 2014 BY JAY COLE 31

Tesla's Company Owned Dealer Model Comes Under Sneak Attack Again - This Time In Missouri

Tesla’s Company Owned Dealer Model Comes Under Sneak Attack Again – This Time In Missouri

We have seen this move before in the war against Tesla’s direct sales model by state dealers…a last minute addition to a bill snuck in just under the wire by dealer associations applying pressure on their state government.

This time it’s Missouri’s turn.

Missouri Legislators "One Up" The Tesla Ambush That Happened In New Jersey  In March

Missouri Legislators “One Up” The Tesla Ambush That Happened In New Jersey In March

The bill in question is HB 1124, and although this bill has been around since late last year, and contained no threatening wording to Tesla’s dealership (or lack therof) model, it showed up yesterday at the Senate after being passed by the House on April 17th with some new “anti-Tesla language” on board.

That bill not only passed yesterday, but with zero public notification or warning of what was happening.  It now moves to the House floor for a final vote.

And Tesla is not happy:

“This change is not an innocent, minor amendment. It is completely unrelated to the original bill, which was about laws regarding all-terrain vehicles, recreational off-highway vehicles, and utility vehicles. It is also a complete 180 from what the original bill proposed. The current statute only bars franchisors from competing against their franchisees (for example, Ford cannot compete against Ford dealerships).

Tesla complies with that statute because we do not compete with any franchise. Just as we saw in New Jersey, however, this bill amendment expands the scope of existing regulations well beyond their original intent. They are attempting to do so in part by redefining the word “franchisor” to mean “manufacturer”, a pirouette of which the legislators may not even be aware. To be clear: this is worse than a mere case of dealers trying to protect an existing monopoly – this is a case of dealers trying to create a monopoly.”

Tesla Motors is now asking for an open debate on these proposed changes, and for the discussion to be held “in the full light of day” with both sides present to give their take.

In the meantime they would like those who are willing to help to speak out against the bill with their legislator – of which a listing can be found here.

 

Below: Tesla Motor’s Full Statement

Although Late To The Party, Tesla Intends To Do What It Can To Have Its Voice Heard In Missouri

Although Late To The Party, Tesla Intends To Do What It Can To Have Its Voice Heard In Missouri

We have just become aware of a last-minute attempt by the auto dealers lobby, via pressure on legislators, to use a procedure that would bar Tesla from selling its vehicles direct to consumers in the state. This extraordinary maneuver amounts to a sneak attack to thwart due process and hurt consumer freedom in Missouri.

In the last week before Missouri’s legislature ends its current session, dealers proposed new language in an existing bill that would force Missouri consumers to purchase new vehicles only through middleman franchised dealers. The bill, HB 1124, has been in circulation since December 2013. It was passed by the House on April 17 without the anti-Tesla language. Last night, the bill with the new anti-Tesla language passed the Senate after zero public consultation and could soon move to the House floor for a final vote, essentially without debate.

This change is not an innocent, minor amendment. It is completely unrelated to the original bill, which was about laws regarding all-terrain vehicles, recreational off-highway vehicles, and utility vehicles. It is also a complete 180 from what the original bill proposed. The current statute only bars franchisors from competing against their franchisees (for example, Ford cannot compete against Ford dealerships).

Tesla complies with that statute because we do not compete with any franchise. Just as we saw in New Jersey, however, this bill amendment expands the scope of existing regulations well beyond their original intent. They are attempting to do so in part by redefining the word “franchisor” to mean “manufacturer”, a pirouette of which the legislators may not even be aware. To be clear: this is worse than a mere case of dealers trying to protect an existing monopoly – this is a case of dealers trying to create a monopoly.

Officials at the Federal Trade Commission have already stated their support for Tesla’s ability to sell vehicles direct to consumers. In a blog post, the FTC authors wrote: “Regulators should differentiate between regulations that truly protect consumers and those that protect the regulated.” Separately, a letter signed by more than 70 leading economists under the banner of the International Center for Law & Economics soundly dismisses every dealer argument and concludes that these bans are only motivated by “economic protectionism that favors dealers at the expense of consumers and innovative technologies.”

Tesla already has a Service+ center in St Louis, MO, at which we employ 15 people. We have invested $2M in the state so far. We plan to open a larger service center in Kansas City, MO, later this year, employing another 15 people and investing an additional $1M.

This debate should be held in the full light of day with all sides being given an opportunity to make their case. Instead, the dealers are again trying to ram through a provision under the cover of darkness and without public debate. The people of Missouri deserve better from their elected officials.

To speak out against this bill, contact your legislator.

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31 Comments on "Missouri Auto Dealers Attempt Sneak Attack On Tesla"

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I for one am getting quite sick of this nonsense. Tesla has threatened to take their battle to the federal level if too many states fight them – what is stopping them?

Out of 50ish some odd US States, you hear of a small few playing dirty politics, and already– you’re completely fatigued from it.

Unfortunately, greed and willful ignorance take no such breaks…

+1,000,000,000,000,000,000……

Why can’t Tesla ever sneak a bill in for once? And what’s with all this sneaking anyway? So much for the “show me” state.

That’s right K – Perhaps Missouri is instead, the – “SHOW ME THE MONEY, STATE”.

Better change those Missouri license plates!

+1

You know what they say: Missouri loves company. 🙂

Make sure that bill that Tesla slips in last minute contains adequate wording for NPNS – “No Plug No Sale”.

Why hasn’t any state put forward a bill stating that all new parking lots built must contain at least X% of spots must have EV charging equipment and all new home construction must have pre-wiring to the garage for a 50 amp 220 outlet?

“What’s with all this sneaking anyway?”

This, my friend, is now politics works. Lobbying is just a friendly word for corruption.

This level of “sneaking” happens at ALL levels of government. Pork barrel projects abound, even in the House and Senate at the Federal level.

The old-school dealers are cowards. Or, if you prefer, cornered rats. They know they’re on the wrong side of history, so they’ll fight the inevitable as long as possible.

I, for one, will cheer every loss they suffer along the way.

They’re fighting scared, whimpering in the corner wetting themselves now like a frightened dog.

There is a LOT of money in the dealership model. They don’t want to give that up or allow anyone else to undermine that revenue stream.

Speaking of Tesla, did anyone else notice the stock tank today? Down 22pts, or 11.3%.

I’m guessing market correction. It’s value is/was overrated.

TSLA is/was undervalued.

Short term panic by a confederacy of dunces that can’t read financial reports correctly.

TSLA will end the year over $250.

On what planet is it undervalued?

Do you have any idea how much has to go right for Tesla the required 100x growth of non-GAAP profit to justify a $250/share price?

$250/share implies not only a runaway hit for Gen 3, but the generation after that as well.

Yeah, TSLA can easily spike to $250/share this year, but not because it’s undervalued. It’d be from momentum and speculation, like when Apple hit $700.

I think this will happen..

“a runaway hit for Gen 3, but the generation after that as well”

I have spoken to countless ICE owners which are salivating at PV + a Tesla Gen 3 in the next 3 years. EV will explode in three years.

Tesla’s stock value can not be explained by their current financial situation. It is based on expectations. So it’s worth whatever you think Tesla will achieve in the future. Nobody has a crystal ball, so anybody’s guess is valid.

f*** missouri, s*** state

lol +1

What a cowardly and slimeball act of desperation. Such acts are 100% reflective of what a sleeeze ball, birtbag, shark dealers “modus operandi” is.

“Dealers proposed new language in an existing bill”

Car dealers do not have legislation powers, and cannot put things in bills. It rather means that some legislator put it there. His/her name should be called out, and made the object of public pressure, if not ridicule. This is the only way that these things get changed.

+1

+1, but that never seems to happen. It all gets lost in the shuffle and none of the 24 hour “news” channels seem to have the time or energy to devote to finding out what really happened. If I had any real say I’d make every single line of every bill have some Senator or Rep’s name next to it.

+1

My take on Tesla’s stock drop is that the honeymoon is over. I mean by that things you overlooked are now not overlooked and the gauzy, hazy, soft focus filter, has been replaced with a microscopic lens now going over of every particular.
Couple this with the general crash of momentum stocks over the past weeks and you have a fairly precipitous decline.
Personally I think it is a tempest in a teapot. Down 30% off it’s high, up 1,000% since it ipo’d Sure Tesla was/is over bought, but by how much? We should also consider profit taking with that huge of an appreciation to be a natural occurrence. Frankly I would be a buyer say at $130-$150. Anyway they are burning money atm, which is what Musk has told them to do, so why are financial guys freaking out? Because they just don’t get it.
Growth companies burn money, but unlike many of the internet companies that have been hammered recently Tesla actually makes money.

Earnings report came out last night, there is always a step change in TSLA after the report.

In this case, they did not blow away the deliveries they promised for Q1, and did not beat expectations for Q2 guidance. Also dampening the mood was sharp tick up in both R&D expense and Sales expenses (stores, service centers, SuperChargers mostly).

They also basically delayed Model X another quarter. It seems like they prioritized global delivery of Model S over development of Model X to some degree.

For EV fans this doesn’t really mean much, but for investors it looks like more time before the big profits start rolling in.

The stock market is a fickle mistress. EVERY time Apple comes out with new product, the stock drops. (Hint for you buy-low/sell-high crowd.)

It’s the same thing with Tesla. Some investors are concerned with the GAAP vs. non-GAAP numbers and sold off their shares. No biggie — Tesla is still overweight and has a lot of “fat” to burn without affecting the company.

Sneaking in a bill right at the end of a negotiation, thinking no one would notice…sounds like my last buying experience at a car dealership. Probably not a coincidence.

As a citizen of Missouri, I will say that some car dealer influence is guaranteed. Probably one of the legislators personally. The state already has a $75 fee on alternative fuel vehicles. It may well die on the Governor’s desk.
Remember, Missouri DID ELECT a dead man as a senator a few years ago.

I guess that taken this cases to the Federal Court will end with the Supreme Court and the end and Tesla can not gamble, we know that the Supreme Court is more political than states.

I read both the senate committee substitute version without Tesla language and the senate substitute that added the Tesla language. The change was added in with a boatload of other new changes that was added on. Enough was added that if you just scanned over the additions, you could miss it. In the short amount of time these changes were introduced that’s probably what happened to many of the senators. There are no hearings scheduled yet in the house but a couple more unrelated amendments were proposed.