Tesla’s First Utah Store Is Ready To Open Its Doors, But State Says No

MAR 6 2015 BY MARK KANE 25

Insert Franchised Dealer Here?

Closed Not Yet Open

Tesla scheduled the grand opening of its first store in Utah for later today, but earlier this week the state of Utah put Tesla’s plan on halt.

The state refused to grant the dealership a license for selling cars, because law in Utah prohibits manufacturers from having more than 45% share in dealership networks. Well, Tesla doesn’t have dealership network, though the stores are considered as dealers 100% owned by the manufacturer, or so it is seems.

“The Utah attorney general’s office last week sent a letter to Tesla Motors on behalf of the Motor Vehicles Enforcement Division informing the company its license to sell cars in the state had been denied because it was defined under Utah law as a manufacturer and not a franchise owner.

Rep. Kim Coleman, R-West Jordan, is proposing a bill, HB394, that would let Tesla make direct sales in Utah. It cleared committee Wednesday and is headed to the full House.

“It’s 2015. You can buy anything online,” said Coleman. “We’re about to drive a multimillion-dollar sales-tax-revenue base out of our state and we’ve rolled out the ‘unwelcome’ mat … so I think we need to change it.”

Jim Chen, vice president of regulatory affairs for Tesla Motors stated:

“We’ve been brought to a screeching halt. It’s kind of ironic that we have a state that is welcoming innovation and clean energy and basically we got halted in our tracks.”

Craig Bickmore, executive director of New Car Dealers of Utah ridiculed Tesla:

“[The law] has been established for a long time and they didn’t know that? That’s a little surprising for a high-tech company.”

War on direct sales to be continued…

Hat Tip to Mark Larsen and Chris S!!!

Source: The Salt Lake Tribune

Categories: Tesla

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25 Comments on "Tesla’s First Utah Store Is Ready To Open Its Doors, But State Says No"

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That’s good that Utah has at least a couple representatives that are not on the ADA payroll.

Sorry Mr. Ice Cream entrepreneur, Dairy Queen already has franchises in our state so if you want to sell your ice cream here you must franchise your product. It would be totally unfair for Dairy Queen corporate and their franchisee if you were allowed to sell your ice cream direct to the consumer.

Yeah but just think of all the added value and protection Dairy Queen gives to the customer. If the Dairy Queen downtown tries to charge you too much for you chocolate dipped cone you can go to the Dairy Queen across town and haggle for a lower price. But if you go to Mr. Ice Cream entrepreneur and he charges you too much you are just screwed….just screwed.

@Ryan @electrNmblit

You guys deserve a prize:

Category: Comedic irony
Subcategory:” “Sad-but-true”

Tesla 7 Step Marketing Plan:

1.Build Tesla “Dealership” in a no-direct-sales state.

2.Apply for Dealer License (knowing it will be denied).

3.Tesla receives FREE news media Tesla marketing over the denied dealer license.

4.Consumers become intrigued about the Tesla “Forbidden Fruit”.

5.Tesla operates the store as a non-sales “Showroom” for Tesla Forbidden Fruit.

6.Consumers visit the Tesla Showroom and order the Forbidden Fruit directly online.

7.Repeat in next no-direct-sales state.

Brilliant!

+100.. I hope someone from TESLA is reading

My above 7 Steps is not my original idea; it’s what Tesla has been knowingly doing.

Tesla is cleverly leveraging advanced Marketing Psychology.

What I find amazing is the high degree the traditional franchise dealership associations are playing into Tesla’s hand in each of these state no-direct-sales cases; the more the local franchise associations publicly protest against Tesla the more consumers become intrigued and want to taste the Forbidden Fruit.

You are surprised that a bunch of clueless car salesmen are not up to the strategy level of a man (and his team) who revolutionized internet payments, electric cars and privately built and sent a reusable rocket to space?… Really?

The 7-step plan is brilliant in it’s simplicity. Tesla doesn’t read EV blogs to get their strategy clues, but NADA may, so hush hush… ;o)

Time to take it to the court

8. …..
9. Profit

🙂

I think Step 8 was:

launch three new vehicle models, ramp production 15x, double the world lithium battery cell production capacity, and try to not run out of cash in the process.

No big deal.

8. “steal underpants”
9….
10. PROFIT

Sounds good, but unfortunately if it’s (by law) just a “showroom”, they can’t give test drives. (At least not in some States. Dunno about Utah). And test driving a compelling plug-in EV is the #1 way to convince someone to buy one! Gotta give the driver that “Tesla grin”. Or, if it’s a P85D in “Insane” mode, maybe that should be “Tesla scream”?? 🙂

@Lensman,
Good point but the flip side is that prohibiting a “Product Demonstration Test Drive” (aside from being on VERY shaky legal grounds) will come across to the average consumer as ridiculous and ultimately plays into the “Forbidden Fruit” label.

Tesla Owner Clubs are starting to coordinate with “Tesla Showrooms” to arrange consumer test drive events; what better way to test drive a Tesla than vis-à-vis an existing owner who will also provide a first-hand owner testimonial of the car?

An interesting question, if test drives are banned in a State, is there any rule saying the Tesla rep can’t just take them out for a ride in the passenger seat?

Just a ride might get some people excited enough to figure out how to test drive or buy one.

yup! Musk said “ok you want to play hardball. Lets present our product and if the people want it they will speak up” . seems to be working

The law does not prohibit manufacturers from owning dealers. It takes a twisted reading of the law to think that– which is what the state is doing on behalf of the auto dealer cartel. The law prohibits “franchisors” from owning or operating a motor vehicle dealer. It lists manufacturers as an example of a franchisor, but that’s in the context of a manufacturer having franchised dealers. Not all manufacturers are franchisors. Tesla has never had franchisees, therefore it is not a franchisor. This is the same twisted reading of a law that happened in Massachusetts that the court threw out.

Regardless of where the Car is Bought, Utah will get its Sales Tax when the Car is Registered in the State of Utah. I’m a EV Enthusiast and I would Like to See Teslas sold Here, I think it is Great for the Industry as a Whole. The Idea that Tesla didn’t know what would happen is Contrived, it is a Publicity Ploy which certainly is Working. It would be great to see Tesla Employ Utahans with some of its amazingly High Margins. It’s just a Matter of Time before You will be able to Buy a Tesla here.

Utah will get the sales tax even if it is purchased online, so that statement by the politician is misleading.

However, a person might not be motivated to buy any car and just keep driving what they have (or buy a cheaper car). That would cost the state some potential sales tax revenue.

electriccarguestdrive.com

Time to do an Electric Car Guest Drive in Utah.

If anyone in the state is interested, request form is on the web site.

No amount of press makes up for a physical presence. Even when Tesla stores are allowed, there are few, and people have to leave the “car sales district” to deliberately seek them out.

I don’t see 3-4 stores, per state, working to get anywhere near 500k unit sales, of an ‘everyman’ car by 2020. Conversely, “Dairy Queen” franchises become so many, that nobody gets a great price on a chocolate dipped bar, because they all have to stay alive.

500,000 Global Sales

X 0.60

= 300,000 USA Sales

/ 50 USA States

= 6,000 Cars Per State

/ 4 Tesla Showrooms Per State

= 1,500 (or 125/month) Cars Per Tesla Showroom

Seems within realm of possible to me.

I thought that Utah was a conservative state and that conservatives believe in the freedom of choice. Consumers should be able to choose if they want to buy directly from manufacturers.

What am I missing?

Conservatives, maybe 50 years ago, had principles.

Today it’s who writes the biggest check.
Where’ve you been?

Dems are now the party of business, of good economic policy, of good environmental policy, of policies based on tested science.

What’s left of the Republican party that is a collection of people happy to be in the poorest, least productive, least educated states as long as they can watch Fox News and Blame Obama.

LOL.

Sad but true, your assessment of what has become of the GOP is pretty accurate. Nice work.

Like it or not, Clinton is the only president in the last 50 years to give us a balanced budget. And Obama is quiestly taking us in that direction, too. Hopefully Hillary will win in 2016 and we can continue something that resembles fiscal responsibility.