Tesla Still Fighting To Sell Its Cars In Several U.S. States

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OCT 18 2018 BY EVANNEX 41

TESLA BATTLES ARCHAIC LAWS TO SELL ITS CARS IN CERTAIN STATES

Tesla has many challenges to overcome. According to David Pogue (via Yahoo Finance), “It’s amazing that Tesla even exists. Before Tesla, the most recent successful American auto startup was Chrysler, over 90 years ago. Tesla has survived the first hard part: designing beautiful, fast, high-tech electric cars that a lot of people want and love. Now come all the other hard parts… [including] getting permission to sell them.”

*This article comes to us courtesy of EVANNEX (which also makes aftermarket Tesla accessories). Authored by Matt Pressman. The opinions expressed in these articles are not necessarily our own at InsideEVs.

Above: A look at Tesla’s store in Walnut Creek, California (Image: Tesla)

“That’s right. In some states, Tesla is not allowed to open dealerships. I live in one of them: Connecticut. Two years ago, I added myself to the waiting list for the Tesla Model 3. This summer, I finally picked it up — in New York. As I drove it back home over the state border, I wondered why Connecticut would want to hand over all the sales tax I just paid to a rival state,” writes Pogue.

Furthermore, “in a capitalist system, it might seem counterintuitive for a state to prevent a popular company from opening a store. Aren’t new businesses good? Don’t they generate property taxes and sales tax? Don’t they mean more local jobs? Wouldn’t welcoming a big player in electric cars help these states with their environmental goals? (Connecticut’s government, for example, aims to lower emissions to 45% of 2001 levels by 2030.) Don’t we want to support American manufacturing?”

It turns out that these protectionist laws are rooted in a bit of ancient history. Pogue notes, “Back in the 1930s, the car companies established this system so that they could worry about making cars, and the franchises could worry about selling and repairing them. Early on, though, the franchisees lobbied their state governments for protection.” State governments, in turn, passed laws.

Above: Along with Connecticut, Tesla still can’t sell cars direct-to-consumer in other states including Texas (Youtube: ReasonTV

Fast forward to the present — are laws in certain states still banning Tesla from selling cars? Yes. Through extensive, expensive (and often successful) lobbying efforts, dealer groups are waging war on the electric carmaker. One reason could be that “the vast majority of [dealer] income comes from service… [and dealers] see the electric car as an existential threat to their service business. It’s revenue that these car dealers don’t want to give up,” says Bruce Becker, president of the Electric Vehicle Club of Connecticut.

To that end, “an electric car has no engine and no transmission. It has no spark plugs, fan belts, air filters, timing belts, or cylinder heads. It never needs oil changes, tuneups, or emissions checks. Your brake pads go years without needing replacement, too, since just lifting your foot from the accelerator slows the car down (by recharging the batteries).” It’s no wonder dealers want to boot Tesla from their state. A National Automobile Dealers Association spokesman said dealers make triple the profit from service as they do from selling new cars.

Yet for state officials, banning Tesla “is not a good long-term strategy. It’s not stopping people from buying Teslas — it’s just sending them out of state to do it.” Tesla’s general counsel, Todd Maron notes, “In all the other states in the country, in all the other countries where we operate, we’ve always been able to operate alongside dealers selling other cars. It’s just competition, and it’s completely normal… We’re not going to give up on this issue, ever. It’s so fundamental to who we are.”

Above: If you live in one of the blue states, you don’t have to cross state lines to buy a Tesla (Graphic credit: David Foster / Yahoo Finance)

After all, “Existing franchise dealers have a fundamental conflict of interest between selling gasoline cars, which constitute the vast majority of their business, and selling the new technology of electric cars,” CEO Elon Musk writes on Tesla’s site. “It is impossible for them to explain the advantages of going electric without simultaneously undermining their traditional [gasoline car] business.”

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Source: Yahoo FinanceReasonTV

*Editor’s Note: EVANNEX, which also sells aftermarket gear for Teslas, has kindly allowed us to share some of its content with our readers, free of charge. Our thanks go out to EVANNEX. Check out the site here.

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41 Comments on "Tesla Still Fighting To Sell Its Cars In Several U.S. States"

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leafowner

Wow — that is really surprising. I had no idea it was that bad….Just think how many sales / reservations they would have if allowed to sell everywhere?!?

Pushmi-Pullyu

It’s not nearly that bad; the map above is very misleading. It’s grayed out in States where Tesla has not yet chosen to place a store… not just States where Tesla is actually blocked by State laws from selling directly from stores.

Tesla sales are only banned outright in 5 or 6 States; different articles disagree on the number.

comment image

But even that isn’t the full picture. There are a few States where the total number of Tesla stores is limited by law. For example, New Jersey is limited to no more than 4 Tesla stores.

A much more complete article on the subject can be found here:

https://blog.ucsusa.org/daniel-gatti/why-you-cant-buy-a-tesla-in-connecticut-and-5-other-states

Windbourne

Colorado allows only 1 Store (5 miles from our house, thankfully), however, it was designed that once they hit a certain sales level, then they would be allowed more. My understanding is that they are either close or have hit it.

windbourne

Actually, Colorado is up to 2 stores. I forgot that Cherry Creek was added

BillT

I agree this is silly but it really wasn’t a big deal buying my model 3 here in Austin TX and this place is crawling with Teslas. I am sure that fact sticks in the craw of the dealership lobby which is yet another perk of owning one.

Kosh

Once a month, just make a point to cruise through the dealer lots real slow…..

james

You are forgetting you have to pay in full before delivery and final inspection… which sucks.

Pushmi-Pullyu

…in Texas. In most States, you pay for your Tesla car at the time of delivery, and not before. As I understand it, Texas has a law mandating payment at the time an order is placed.

John

Man, thank God for the dealerships, “protecting” us all from the manufacturers.

I’ve explained the reason Tesla can’t use the dealership model ad nauseam to folks who think it’s unfair that Tesla isn’t forced to use the model, and it doesn’t sink in. It’s SO easy to understand, ICE vehicles generate massive back-end maintenance. EV’s don’t. Which one does the salesman wanna sell? Yet it’s still baffling for folks.

I also find it interesting that Republicans cry “states rights” when it suits them, yet use the Fed when convenient to block private companies like Tesla.

Doggydogworld

How is the federal government blocking Tesla? This is about individual states acting….. individually.

Also, I’m pretty sure Connecticut gets their sales tax. Also, Teslas so far need a lot more service than Toyotas. Last I checked my local Toyota dealership was in no danger of going out of business.

John

My fault. I thought I had read something about the Fed being involved with the dealership lobby. I’ll retract that jab at Republicans.

Regarding Toyota, that’s fine. I’m not sure how their scheduled maintenance stacks up against Tesla. But regardless, that has nothing to do with Tesla being frozen out of direct sales in any state. In my opinion.

Quiviran

I think your jab was correctly placed. If you look at who controls the legislatures and state houses in most of the gray states, they’re Republican. The gulf of irony separating what Republicans say and what they actually do is wide indeed.

esto perpetua

It is more nuanced than that. Quite a few democrat -controled States in the mix. But you see what you want to see.

Quiviran

Which party controls “most”? That’s the nuance I was going for.

Recoil

It is actually split pretty evenly between Republicans and Democrats that control the states that Tesla can’t sell in or limited on the number of stores.

Dem states:

New York

New Mexico

Connecticut

Michigan

Colorado

Virginia

New Jersey

Maryland

Pennsylvania

Republican states:

Texas

Utah

Oklahoma

Wisconsin

Alabama

South Carolina

Louisiana

West Virginia

North Carolina

So please stop with the fake news and the fact that it wasn’t even important to this topic as both parties that are limiting Tesla sales have their hands out to the dealer association and the Manufactures.

As more people come to purchase more Tesla’s these politicians will start to change their tune when they see that they can get voted out by hundreds of thousands that will own Tesla’s very soon.

So, please leave the bad politics out as this is something every EV advocate can get behind.

windbourne

Wow.
Colorado and New Mexico are purple states.
I live in Colorado. It was GOP that tried to block Tesla and Dem Ritter that settled with 1 store until certain level hit.
Michigan was stopped by a GOP gov. /State Congress.

I’m not going to even bother with the rest of your screed.

Please leave your fake news back at your normal faux news, Breitbart, and daily stormer.

Recoil

Wind,

Dang dude take a chill pill. You don’t know anything about me yet you make a lot of uncivil accusations.

There are a couple purple states on both sides but it doesn’t matter as both the Republicans and the Democrats in those states have bowed to the dealerships dollars and in Michigan case bowed to the Manufactures will.

Both are equally responsible for not letting Tesla sell in their states so please stop with the rhetoric as this a something both sides can get behind.

You just have to put down the protest signs, stop looting and burning your own streets and take off your antifa mask long enough to show the people in power that they need to back Tesla and allow them to sell in all states.

James

Ah, partisans…

It’s not parties you should direct your judgements on, but rather politics in general. Anyone, yes ANYONE who accuses one of the two major political parties in the U.S. to call out for corruption and being bought by special interests is merely pointing their finger into a mirror. They all cow to their own disparate special interests.

Our anger should instead be directed toward energy in establishing campaign finance reform and term limits. Amazingly, these are BIPARTSAN issues WE ALL can get behind since these politicians enjoy being paid off and using your tax monies innappropriately.

ffbj

No, they’re just losing business, to a company that can’t sell cars freely in many states.
The dealership model is broken, they add cost but not value, around 5% to every vehicle sold, and that money is coming out of your pocket. Of course the real money is in service where they traditionally really rip you off, adding fees, do nothing inspections, recommendations for additional unneeded services or checks, which they provide at higher costs.
To paraphrase Honest Abe, Dealers have many defenders, but no defense.
https://www.youtube.com/watch?v=KxS7TY8RTNE

(⌐■_■) Trollnonymous

I have a few relatives that are “Technicians” at stealersips. I laugh at the stealersips posted “$65/hr” labor when they pay their “Technicians” that have worked there for 9yrs $19.75/hr.

LMAO @(■_■¬) Nolltronymous

Mister G

Very true..honda dealership wanted me to go with platinum plugs at my 30,000 mile service visit on my then new 2001 honda civic lx, I said hell no of course but how many people fall for the scam I wonder.

(■_■¬) Nolltronymous

Yes, CT gets their sales tax. You pay sales tax in the state your car is registered in, not the state you purchase it from. I live in NC, but I’ve purchased cars in SC and GA, and each time I paid NC sales tax (not SC/GA sales tax).

John

They would get even more sales tax if they didn’t add the layer of having to buy out-of-state.

Will

It’s a state right issues that shouldn’t be since it’s inters commerce which belongs to the feds. The States are wrong here

Doggydogworld

Interstate commerce means the states can’t block you from buying a Tesla elsewhere and driving it or shipping it to your house. That’s exactly how Tesla sells in many of these states.

Pushmi-Pullyu

I’m sorry, but you’re wrong. If you were correct, then States could not have individual laws restricting or prohibiting, for example, the sale of liquor.

The interstate commerce provision of the U.S. Constitution does not prohibit States from regulating sales within their own borders. Sadly, this is a fight Tesla will have to carry out State by State.

Nick

So send those Model 3s to Europe, we will have them.

Nelson

” I wondered why Connecticut would want to hand over all the sales tax I just paid to a rival state,”

Not just sales tax but income tax of Tesla Store workers. Connecticut Legislators, not so smart if you ask me.

NPNS! SBF!
Volt#671 + BoltEV + Model 3

Ranss12

What does NPNS! and SBF! mean. The best I could find for NPNS is ‘Normal Purchase Normal Sale” and for SBF “Single Black Female”

Nelson

NPNS! = No Plug, No Sale!
SBF! = Stop Burning Fuel! = Use sustainable energy like solar instead.

Robert Weekley

“NPNS” = “No Plug, No Sale”, on this conversation, I am pretty shure!

“SBF” = ??? (That one I don’t know!)

Pluto

Here’s a full, up to date map of where cars can be sold/serviced directly by manufacturers (the Yahoo! article referenced this): https://teslamotorsclub.com/tmc/media/us-direct-sales-map.118772/full

Quiviran

That’s very helpful. Thanks.

rog

Let‘s wait until VW is going for direct sales…

Chris O

In many cases you can’t switch to direct sales since the dealer you already have are protected. Tesla got as far as it did because it did not have any dealers. Many states changed their dealer mandates from language to protect existing dealers to language for the random mandatory use of dealers after successful dealer lobbying, money changing hands, the usual stuff, or Tesla would have gotten further than it has so far.

Hauer

The Land Of The Free.

🤣

Chris O

With the best laws money can buy.

Mark.ca

There you go!

james

There is ZERO reason for Texas to change. We still have to pay the sales tax if transferred to Texas within 6 months of purchase AND the legislators still get all the sweet, sweet TADA (Texas dealers assoc.) lobby money. If I had bought in CA, I’d have to have paid the higher taxes and then TX gets none, but it wasn’t worth it to me to do so…

Lou Grinzo

It’s worth pointing out that in some of the blue states in this map, like NY, Tesla is severely limited in the number of stores it can have. I believe in NY they’re only allowed 5 for the whole state. I live in the Rochester area, which means my nearest store is not at all “near”. Tesla put in a bank of superchargers at a local, high-end mall, which fueled speculation things would change, but that seems to once again have been too optimistic.

Even with that restriction, I do see some Teslas locally and in the Finger Lakes. The dealers and their ICEv addiction will hang on as long as they can, but eventually they will be assimilated…

Windbourne

I hope that Elon will announce soon that they will be setting up new GFs in America and EUrope, but it will only be open states/nations where allowed to sell without discrimination.
IOW, reward those states/nations that are allowing competition.