Dealers & Republicans Attempt Anticompetitive, Anti-Free Market Tesla Ban… Again

[kristopher]

Dealers & Republicans Attempt Anticompetitive, Anti-Free Market Tesla Ban… Again

An Ohio state senator, backed by local car dealers has for the second time introduced a measure that would ban the sales of the Tesla Model S. So much for the unfettered free market, eh?

Change can be scary. I get it, I really do, but these anti-Tesla laws are insane, plain and simple. Car dealership owners simply foresee Tesla’s factory-owned dealer model as threatening their livelihood, and they’ll stoop to new lows to prevent Elon Musk’s electric car maker from setting down roots. In Ohio, a measure banning the direct sale of cars by manufacturers was already stricken down, but don’t expect dealers to go quietly into the night.

With paid-for Republican Tom Patton leading the way, the Ohio Automobile Dealers Association has re-entered the same bill for consideration to the state senate, albeit with the provision that Tesla’s two currently operating stores remain open. Tesla is currently fighting similar legislation in at least four other states, with a mixed rate of success so far. Tesla sales are banned in Texas, but other markets have opened their doors to the electric car maker.


Dealership associations are fighting to preserve a model that has prevented major car makers from selling vehicles directly to consumers for decades now. Tesla is able to get around many of these state laws because there are no Tesla franchises to compete with, so dealer associations and their Republican cronies are scrambling to rewrite the laws in order to force Tesla to comply with the franchise model.

It’s absolute insanity, and the fact that a single company can be so blatantly and unfairly targeted should piss off anybody who considers themselves a car enthusiast....

http://cleantechnica.com/2014/02/16/dealers-republicans-attempt-anticompetitive-tesla-ban/

[cprise]

1. I'm ambivalent about this

If Tesla's "direct sales" lead to vehicles becoming serviceable only by the manufacturer itself, then I'm against the direct sales model.

[kristopher]

2. I don't understand.

What does "becoming serviceable only by the manufacturer itself" mean?

[cprise]

3. It means Tesla allow only a direct relationship them

for everything, except maybe charging.

You can't hire a Tesla-certified mechanic to service the car under warranty. You have to get an actual Tesla employee to do so, during working hours at Tesla facility.

It mirrors a trend in consumer electronics where the devices are essentially sealed black-boxes; Independent servicing (or re-purposing) is called 'tampering' and where copy-protection mechanisms are in-place its even lead to people being arrested. E.g. you don't really "own" the device you bought, you just have a revocable license of indeterminate period.

Mercedes has been in the press in years past for fielding similar plans to make their brand's "under the hood" vitals off-limits to owners and non-Mercedes personnel.

[kristopher]

4. I still don't see your point

What's the difference between a "Tesla-certified mechanic" and a mechanic that is "an actual Tesla employee" from the point of view of the car owner other than the fact that you remove the incentive for local dealerships to engage in price gouging?

Every car maker on the market considers the applicable portion of the warranty void if you hire independent service agents to "repurpose" anything in your car - so again, I don't get the point.

It also isn't clear about what you mean by not owning the device. There is probably proprietary software involved but I can't see how that constitutes an infringement on my property rights regarding the automobile.

The local dealer franchises are an anachronism and serve no vital function in todays world of information. They are, imo, far too often geared towards unethical practices in all facets of their operation.

Good riddance in my view.

[cprise]

5. 'Tesla Model S Service Contract: $600/Year, Or Warranty Voided'

http://www.greencarreports.com/news/1079637_tesla-model-s-service-contract-600-year-or-warranty-voided

An independent mechanic isn't even allowed to rotate the tires. And dealers are the usual locus for independent mechanics who can perform repairs under warranty. They at least give people some choice in who they are dealing with.

[kristopher]

6. How would that be any different if it were done at a franchised outlet?

I still have no idea what you mean by drawing a distinction between an "independent" mechanic and a mechanic that would be employed by Tesla - they are both going to be manufacturer authorized mechanics. An independent mechanic is one that operates outside the network of dealer mechanics.

The mandatory service contract issue is one I hadn't heard of, but it has nothing to do with the totally separate matter of franchising.

I still say the franchise dealer model screws the customer - especially as ownership expands out of the high end end market into the segment of consumers that are less financially savvy. I've had to step in three times in the past couple of years to show friends and family how they had been overcharged about $3500 each by having financial products they didn't understand included in their contracts.

[cprise]

10. Are you serious?

On one hand you're implying that the manufacturer controls the dealer mechanics. On the other you're saying these dealers are, as a rule, swindling the customer because they're free to do so.

Why would it be better to have the customer deal directly with a mega-corporation? Because they're more honest??

You're arguing for a trend in corporate centralization.

[caraher]

7. I'm not sure this truly requires statutory intervention

At least not for consumer protection; dealer protection is another story!

Though it does seem like an overpriced service contract, this is one instance where it makes sense to see what informed consumer choice produces. As your article notes,

In a poll of owners-to-be on the Tesla Motors Club forum, 12 percent agreed that Tesla had “screwed the pooch” and said they would cancel their orders. Another 48 percent thought the price was too high--but said they would pay it, reluctantly, because they had no other choice.

Only 9 percent thought it was a great deal, and were happy to fork over the $600 each year.

As long as Tesla isn't defrauding consumers, the buying decisions they make should pretty much answer the question of whether the dealer model is superior. If the contract is taking a big bite out of their business, it shouldn't be hard for them to allow things like tire rotation and wiper blade changes to happen without voiding the warranty. And I can see some good reasons to keep any serious repair work out of the hands of non-Tesla shops, even though I agree that the contract is overpriced and prohibits routine work that should not void a warranty.

[caraher]

8. And as it turns out, the market correction has already occurred

[link:The $600 service contract is no longer mandatory|http://www.digitaltrends.com/cars/tesla-claims-its-revamped-warranty-and-service-program-is-the-worlds-best-even-if-you-brick-your-car/]:

Tesla is making maintenance cheaper and more convenient. The $600 annual service contract required to preserve warranty coverage is no longer mandatory. Even Tesla CEO Elon Musk had to admit that it was a bit excessive for a car that doesn’t need oil changes.

“We made a slight mistake,” Musk said in a recent press conference, ”in making the service fee mandatory.”

[cprise]

11. They sound like Comcast or Apple, 15 years ago. n/t

[hunter]

9. I can say with some certainty I will never own a Tesla.

Probably because it will always be beyond my means, but even if I ran into a couple of stray million dollars tomorrow I wouldn't buy any kind of car.

I feel about the same as I do about cable and satellite television. I've excluded certain "industries" from my personal universe.