How Car Dealers and Their Lobbyists Crushed Tesla's Plan for Texas

TeslaModelS.jpg
Tesla
This past legislative session, billionaire Elon Musk's push for a new law allowing electric-car maker Tesla Motors to bypass car dealers and sell directly to consumers crashed and burned.

Which wasn't a surprise. The state's car dealers have a long, proud history of plying legislators with campaign cash and gifts. So when Texas Auto Dealers Association President Bill Wolters complained that the Tesla bill would open the door for huge corporate car-makers to "compete with our family-owned businesses," lawmakers listened.

Still, it's instructive to take a detailed look at the battle, which nonprofit watchdog Texans for Public Justice provides this morning.

See also: Tesla's Attempt to Revolutionize the Auto Industry May Have Hit a Road Block in Texas

Musk spread a bit of money around, giving $7,500 in campaign contributions and spending somewhere between $255,000 and $565,000 on lobbyists.

In return, TPJ writes, "[l]awmakers happily gave Musk what he wanted -- so long as he didn't challenge powerful, entrenched interests." Sweeping bills supporting SpaceX, Musk's private rocket-launching venture, sailed through while the more modest Tesla-friendly measure stalled.

Musk's expenditures were dwarfed by dealership interests, which poured more than $2.5 million into the 2012 election and spent $750,000 on lobbying. Here's TPJ's list of top contributors:

TexansPublicJusticeTesla.jpg

Not that Dallas needed a reminder of entrenched transportation interests using government officials to crush an innovative, forward-looking startup.

See also: Dallas Swears It's Not Trying to Crush Uber, Just Regulate it into an Unrecognizable Form


My Voice Nation Help
72 comments
Cameron
Cameron

Its great how two years down the line tesla now pose a credible threat to those few in the car industry that scorned them. In 10 years tesla will be dominating the motor industry. There batteries charge now in 90 seconds, just as quick as filling up at the pumps. Im interested to see the shift. The cars will be a simila price but the fuel is cheaper, the car insurance is cheaper and they are so much better from the green perspective which evryone is going for. Big thing happening! 

kduble
kduble

The lobbyists get the last laugh. Tesla couldn't have posed a threat worth $3.25 million.

JohnSmallBerries
JohnSmallBerries

So car dealers have their own state protected unions? Am I reading that right? 

rufuslevin
rufuslevin

 OH WELL, LIKE LAWMAKERS HAVE MADE DEALERS LIFE SO GREAT...WHO REMEMBERS HOW OBAMA AND CASH FOR CLUNKERS FORCED THOUSANDS OF AUTO DEALERS OUT OF THEIR FRANCHISE OPERATIONS, AND HOW THE PROGRAM DESTROYED AN ENTIRE MARKETPLACE OF USED CARS THAT LOW INCOME WORKERS NEEDED TO BE ABLE TO AFFORD TO GET TO WORK BY AUTO.....DO NOT MOAN ABOUT THE ELECTRIC CAR YET....WHERE IS THE ENERGY GOING TO BE GENERATED?  THE TEXAS ELECTRIC GENERATION CAPACITY IS UNDER TOTAL ATTACK BY THE OBAMA EPA CORRUPT ORGANIZATION....AND THAT MAKES ELECTRICITY GENERATION DEPENDENT UPON MORE EXPENSE, UNRELIABLE, AND NON SERVED ELECTRIC GRID GENERATORS.


ELECTRIC CARS ARE NOT YET READY FOR PRIME TIME. 

holmantx
holmantx topcommenter

Tesla's business model relies solely on the lifetime guarantee of the battery to subsequent owners.  Currently, the battery costs $70,000 to replace.  If the company becomes insolvent, there goes the resale value.  

I liked the Delorean too, but I suspect we're back to the future and the curse of the gull-winged door.

dmtrousd
dmtrousd

Car dealerships derive most of their REVENUE from car sales, but their PROFITS from service. The reason why Musk wants to bypass the car dealership franchise is because Tesla is designed to be a low maintenance vehicle. No oil changes, transmission service, battery checks, etc.

So far, most of the "service" has been software updates that can be done by the owner at home. If you buy a Tesla, you can expect at most to change the tires periodically like any vehicle, and that doesn't have to be done at a dealership.

Dealers will have little interest in selling a vehicle that directly competes with their profit-generating business model. Some commenters have suggested that dealers add "value," but if you're referring to test drives and showrooms, Tesla can do that just fine. What little additional value dealers offer only adds to the cost.

So why not let the consumer decide? One additional aspect to consider in all of this is that dealers are less concerned about Tesla (it's a tiny player for now), but instead do not want the big guys to offer direct sales. Some of the commenters here are confused as to how monopolies work, but even direct sales by big auto companies should not be expected to increase prices, as there are so many competing auto makers to choose from.

Know how I know? Look at GM do Brasil. They have a system whereby a buyer can not only order competely and directiy online, but in doing so can totally customize their car down to every last detail and option, purchase it, then track the vehicle all through production and pick it up at one of several distribution centers.

And all without the guiding hand of a car dealer. No hours spent discussing LoJack, dealer financing, rustproofing, or all the BS (sorry, "value") that dealers tack on. The result? It has the other carmakers in Brazil scrambling to offer a competing product, not bellyaching for gov't protection.

Tipster1908
Tipster1908

I don't have a particular problem with middle men in general. In many industries, there is an economic rationale to their existence, even if they add an extra layer of cost. However, I have a huge problem with legislatively protected distribution laws. Cars and alcohol are the most obvious ones that come to mind and both exact huge rents from the consumer and use that profit to line the pockets of politicians in both parties.

Although for what it's worth, car dealerships don't really make much money on new car sales. The margin is something like 3-5%. It's pretty ridiculous. The real money is in used car sales and service. Service margins are almost 50% at dealerships and used cars are probably in the 30% territory, give or take.

bifftannen
bifftannen

I'll be sure to remember that list of money given by car dealerships. The next time I hear a car salesman cry that the price of a car is too low and he has to run a business and can't give cars away.

Kimi Steinbaugh Hagans
Kimi Steinbaugh Hagans

Not that we can afford it anyway...but it would have been awesome not haggling with a salesman and inflated msrp's. When I was shopping for my truck, each dealership had its own Msrp for the exact same features.

Michael Schaefer
Michael Schaefer

Hey Texas, how about you let the free market decide? Or does that only apply when your cronies benefit?

Dallas_dude
Dallas_dude

Who the hell would defend car dealerships?  They are the text book definition of middle men.  IF I can go buy my house direct from another person then why can't I buy a car directly from a manufacterer?  TVs, Computers, Phones, HOUSES, ....nothing else gets this kind of crazy legal protection.

Roland Rangel
Roland Rangel

It does say how scared the fossil fuel running car dealers are.

Eugene Plyako
Eugene Plyako

Anyone thought of the after sale issues ? Who would you call? Tesla in Cali? They need dealers network.

David Burrows
David Burrows

How dare he try and sell his exquisite electric car in the oil buckle!

Nancy Moore
Nancy Moore

I saw this story the other night on TV somewhere, and thought how out-fracking-rageous it is for those hypocritical "business" people who are always screaming, "Let the market decide; we don't need NO regulatin' of our businesses." Tesla wanted to sell directly to the public without a dealer middle man. Texas said, "No!" How dare a business try to do business here!

Steve Nabors
Steve Nabors

I still think it should be illegal for politicians to receive contributions from anyone. Seems most of our laws in this country are "bought"

Colin Cottingham
Colin Cottingham

I test drove this marvel in arkansas. Car dealers be afraid be Very afraid

mavdog
mavdog topcommenter

Musk and Tesla can do what every other car company does, enter into a new car franchise agreement with a dealer and let them sell and service the vehicles for buyers.

Why does tesla feel a need for a change in the status quo to sell their cars?

dmtrousd
dmtrousd

The battery does not cost $70,000 to replace. From Tesla's website:

"A Battery Replacement Option will be available for purchase soon. The option allows you to pre-purchase a new battery to be installed after eight years for a fixed price: $10,000 for 60 kWh batteries and $12,000 for 85 kWh batteries."

If you believe that in the unlikely event of total battery failure on a new Tesla S that Tesla will tell people to just buy a new car, then you haven't been following Tesla and Musk's commitment to quality and customer satisfaction.

Tesla is already light years ahead of where Delorean was--in terms of production volume, available cash, distribution network, etc. etc. Every hurdle--range anxiety, reliability, build quality, etc. has been addressed, and continues to be.

This isn't a Nissan Leaf. It's not a niche vehicle, as Musk's approach is to produce a car that competes head to head with its competitors. For the SUV they decided the X has to have a 3rd row, so that it competes with any high end SUV on the market.

Tipster1908
Tipster1908

@dmtrousd agreed completely. service and used car sales are where the money is for dealers. and readers here are confusing monopoly with monopolistic competition. the example thrown out was Apple, but that's not actually a great example if you're talking iPhones because the mobile OS space doesn't have enough competitors to be considered monopolistically competitive. the better example is McDonalds. only McD's can sell fast food under its own brand name, but it has so many competitors in the same industry that it can't gouge the customer and is thereby effectively a true market. for the record, most national fast food chains have some mix of company owned and franchised stores. there is no reason that company-owned locations would put franchised locations out of business unless the franchise was offering weaker service (especially in fast food where menu pricing is standardized regionally). 

markzero
markzero

@Steve Nabors It costs money to run a campaign, from buying posters to renting venues for speeches. If candidates have to self-fund, then pretty much only wealthy people can afford to run for office.

nDjinn
nDjinn

@mavdog Does it matter how a company wants to broker the sale a legal product? The  ignorance of your comment is astounding.

Dallas_dude
Dallas_dude

ARE YOU SERIOUSLY DEFENDING DEALERS??

They are the textbook definition of middle men!  I can buy Microsoft Windows from Microsoft online or I can go to best buy, walmart, target etc.  I can order a TV directly from Sony, or I can walts in to bestbuy walmart, or target.  The same goes for thousands and millions of products.  Why do dealers get special protection?  I don't have to buy a house from a real estate agent do I?

lakewoodhobo
lakewoodhobo

@mavdog Perhaps the status quo is dated and unfair to consumers, much like the taxi cab industry and how it reacted when Uber came along.

TheCredibleHulk
TheCredibleHulk topcommenter

@dmtrousd 

Wha- aht? This is not a niche vehicle?

This is the very definition of a "niche" vehicle.

holmantx
holmantx topcommenter

@dmtrousd

Tesla wants you to give them cash money NOW. Then, EIGHT YEARS FROM NOW, you can go to a designated Tesla-authorized service and repair facility to get a fresh new battery.  Tesla may not be around in 8 years.  The Palo Alto, Calif., company posted a $30.5 million loss, or 26 cents a share, compared with a year-earlier loss of $105.6 million, or $1 a share.

It's a gimmick.  The battery today costs $70 grand.

Their only hope is to get the car into mass production.  

And what's its drive radius?

mavdog
mavdog topcommenter

@Dallas_dude 

yeah, as you point out competition for the sale is a good thing for the consumer....

why should tesla get special protection? good question.

mavdog
mavdog topcommenter

@lakewoodhobo 

how so? what advantage would there be to a manufacturer selling the cars instead of a dealer?

having independent vendors competing with each other is better for the consumer, if there is only 1 source of distribution the buyer is in a weaker position.

the analogy with taxis and uber seems a reach to be honest.

dmtrousd
dmtrousd

Yes, many readers are familiar with that stat (it's regularly cited by GM and Nissan in press releases),

which is why a 70 mile range would be 'inadequate' and an 80 mile round trip commute would be 'impossible' without a charging source at work. Thanks for the clarification.

TheCredibleHulk
TheCredibleHulk topcommenter

@dmtrousd 

When electrics hit 15-20% of the market, I'll be ready to call that mainstream.

dmtrousd
dmtrousd

I think we're just arguing semantics then. The Model T was a niche vehicle until everybody had one. My broader point is that the S, and especially the X and the E can appeal broadly to most drivers. Admittedly, the R was a niche vehicle, as there were other high-performance roadsters of suitable quality for a better price. People bought the R to stand out as an early adopter, but not because the car was practical. The subsequent models are quite practical.

My last car I purchased and sold I kept all the receipts--purchase, gasoline, maintenance--and it was surprising how much my Accord cost me after only 5 years.

The Tesla represents a truly revolutionary approach to personal transportation. One predictions that in the near future the chargers will be so ubiquitous that for a visit of any moderate length (grocery shopping, work at office) people will simply plugin and charge as they go. This may take awhile, but we're already seeing that in Dallas, and forget about SF, Austin and similar cities.

TheCredibleHulk
TheCredibleHulk topcommenter

@dmtrousd 

The fact that it is fairly practical doesn't disqualify it as a "niche" vehicle. I would consider the Leaf a "niche" vehicle as well by virtue of the fact that all electric vehicles still fit that category.

Meaning that they are statistically insignificant portion of the auto market at this point in time. 

dmtrousd
dmtrousd

A friend of mine drives a Leaf. She lives near work, doing scheduled shifts. So the 70 mile range is fine for her. But for an average 40 mile commute, most drivers a 70 mile range is inadequate. Doesn't leave much room for soccer practice or groceries. But for her situation it works, so it is a "niche" vehicle.

Her husband, on the other hand, drives like me: up to 150 miles a day, erratic schedule, and so forth. He drives the S and takes it EVERYWHERE. Even at the miles I drive I would do fine charging it once each night. It would be an everyday car, unlike the Leaf. And very soon Tesla owners will be able to take weekend trips just about anywhere, because of the charging network.

Forget for a moment that the Tesla S is electric. How does it do as a car? It's a high performance, four door sedan with rear hatch. It competes with the Audi A7, Porsche Panamera, and perhaps the Maserati Quattroporte (although the Mas is not a hatch). It is equal or better in terms of price, performance, looks, and comfort. In my opinion it's a bargain--at that class--because of the comparative savings in fuel and maintenance. If you think that the high price makes it a "niche" product, then so are all the other luxury performance cars the S competes with.

The Leaf is an electric Versa with little by way of creature comforts, and is pretty expensive for what you get. It's maybe for people who want to make a statement at a premium price. The Tesla S, on the other hand, is a great car in its own right. It says, "I like to drive really fast, and still haul my family and luggage."

dmtrousd
dmtrousd

It's turning radius is about 37 feet, but it's driving range is 140/200/265 miles for its respective battery options. Even the base model at 140 mile range easily beats the Leaf. For my family we could drive from Dallas to Austin, stopping midway to charge while having lunch/dinner (which we do anyway), and do the same on the way back.

The Tesla is not a gimmick. It isn't made of magic, and it isn't for everyone, but no car is made for everyone, that's why there's such a range of models out there.

When you say: "Tesla wants you to give them cash money NOW" and "Their only hope is to get the car into mass production," well, that's every car makers plan. I'll admit Tesla still isn't out of the woods yet, getting the X into mass production is the next big hurdle.

But here's why I think Tesla will appeal to more and more buyers:

1) Safety: at around 4000 pounds mostly concentrated at the low end of the chassis, the S is damn difficult to rollover. In fact, the usual rollover test machine was altered to counter the Tesla's exceptional low end mass. This exceeds any other car on the market. Also, those two spaces in your car that contain a heavy engine and gas tank? Those are airspaces, aka crumple zones, in the S. Not to mention all the pieces (starter, alternator, etc.) that become projectiles in high speed collisions. Not to mention all that volatile fuel sloshing around.

2) Convenience: other than tire changes and software updates, a Tesla doesn't need to be taken in for oil changes, tuneups, and all the many other service items involved with an ICE. That saves quite a lot of money.

3) Cost: electricity is much cheaper than gasoline by the mile. If you say, "well, what if electric rates go up," I say, "well, what if gasoline goes up?"

4) Infrastructure: critics point out the lack of infrastructure. That concern is rapidly disappearing. You mean, electrical outlets? Not only is a vast supercharging network being built as I write, but in just the last year my office building, the restaurant down the street, and the bookstore by my house have installed charging stations. Oh, and I could always just charge at home while I sleep. Do you have a gas depot in your garage?

I don't work for Tesla, I'm just a guy who hates filling up a gas tank in Texas heat every two weeks. You really should visit the Tesla showroom in either Austin or Houston next time you're there, and then see how you feel.

dmtrousd
dmtrousd

It's turning radius is about 37 feet, but it's driving range is 140/200/265 miles for its respective battery options. Even the base model at 140 mile range easily beats the Leaf. For my family we could drive from Dallas to Austin, stopping midway to charge while having lunch/dinner (which we do anyway), and do the same on the way back.

The Tesla is not a gimmick. It isn't made of magic, and it isn't for everyone, but no car is made for everyone, that's why there's such a range of models out there.

When you say: "Tesla wants you to give them cash money NOW" and "Their only hope is to get the car into mass production," well, that's every car maker's plan. I'll admit Tesla still isn't out of the woods yet, getting the X into mass production is the next big hurdle.

But here's why I think Tesla will appeal to more and more buyers:

1) Safety: at around 4000 pounds mostly concentrated at the low end of the chassis, the S is damn difficult to rollover. In fact, the standard rollover test machine was altered to counter the Tesla's exceptional low end mass. This exceeds any other car on the market. Also, those two spaces in your car that contain a heavy engine and gas tank? Those are airspaces, aka crumple zones, in the S. Not to mention all the pieces (starter, alternator, etc.) that become projectiles in high speed collisions. Not to mention all that volatile fuel sloshing around.

2) Convenience: other than tire changes and software updates, a Tesla doesn't need to be taken in for oil changes, tuneups, and all the many other service items involved with an ICE. That saves quite a lot of money.

3) Cost: electricity is much cheaper than gasoline by the mile. If you say, "well, what if electric rates go up," I say, "well, what if gasoline goes up?"

4) Infrastructure: critics point out the lack of infrastructure. That concern is rapidly disappearing. You mean... electrical outlets? Not only is a vast supercharging network being built as I write, but in just the last year my office building, the restaurant down the street, and the bookstore by my house have installed charging stations. Oh, and I could always just charge at home while I sleep. Do you have a gas depot in your garage?

I don't work for Tesla, I'm just a guy who hates filling up a gas tank in Texas heat every two weeks. You really should visit the Tesla showroom in either Austin or Houston next time you're there, and then see how you feel.

markzero
markzero

@mavdog @Dallas_dude the most competition would occur when both manufacturers and dealers can operate in a market, would it not? You're in favor of continued artificial barriers to entry.

RTGolden1
RTGolden1 topcommenter

@mavdog@dingoBut Tesla isn't the entire automobile market.  The Tesla isn't competing against itself, it's competing against the automobile market.  there would still be Ford, Chevy, Toyota, Nissan, etc 'in the market'.  Your analogy of a single vendor for a market is completely off the mark.  Even your own examples point this out:

"when only 1 airline to buy that ticket from history tells us the price of that ticket is substantialy higher than when  there are multiple airlines competing."

Multiple  AIRLINES.  Not 'multiple travel agencies'. You are, in this rebuttal, pointing out the error in your own defense of the dealership model.  We aren't forced to buy airline tickets from agencies because there is effective competition from multiple airlines in the market.  Tell me again why the automobile industry is any different.


Guesty
Guesty

@mavdog @dingo Mavedog, you don't seem to understand that it doesn't matter if there is a middle man, Tesla will still be the only source for Tesla cars.  It will decide how much to charge the dealers, and the dealers will have no choice but to mark up from there.  In other words, Tesla can set a floor regardless of how many dealers there are out there.  

mirkovich
mirkovich

@mavdog @P1Gunter Your just being stupid Mavdog. Ford can make an electric car, so could GM, or Toyota, etc.  Competition between middlemen is not nearly as good for consumers as competition between manufacturers.   Its always been my purchasing experience that buying direct ALWAYS saves money over buying from middlemen.  Always. 

dsmithy3211
dsmithy3211

@ScottsMerkin @mavdog @P1Gunter Exactly this. Tesla can't open its own dealership. This is just dealerships wanting to get in on the Tesla gravy train. 

Or, perhaps less cynically, it's dealerships hoping that the likes of Ford, GM, and Toyota don't get any smart ideas and try to implement the Tesla business model themselves. 

dsmithy3211
dsmithy3211

@mavdog @P1Gunter There's nothing inherent in your assertion at all. Tesla cars are not sold in an economic vacuum, and Tesla does not have a monopoly. Tesla cars compete with the likes of BMW, Audi, Lexus and the like and are priced accordingly. The price of a Tesla car is whatever the market is willing to bear.

But let me counter your assertion with my own: the inclusion of middlemen inherently raises price. It's Supply Chain Management 101.

By cutting out the middleman, Tesla is bringing a portion of the profit that would otherwise go to dealers in-house, while passing the remaining portion onto consumers. It's a win-win for both Tesla and consumers. The only party that loses in that scenario is the non-existent middleman. 

ScottsMerkin
ScottsMerkin topcommenter

@mavdog @P1Gunter so why cant Tesla open a dealer in Texas, oh yeah, the dealership groups wont let them.  Why do you want to force Tesla into making other dealers sell their cars?

mavdog
mavdog topcommenter

@P1Gunter 

are you under the belief that Tesla wouldn't need a building for the cars, which they would rent or buy, pay the bills for the building, pay their salespeople, their sales managers, and may or may not have a receptionist? sure they will.

I am of the opinion that multiple channels of distribution provides a competitive market for a product, and the beneficiary is the consumer.

A single source of distribution inherently produces a higher price for the item. That is exactly what Tesla is trying to establish.

P1Gunter
P1Gunter

@mavdog That seems pretty obvious. A dealership has to pay for the building, pay rent or buy the land, pay the bills for said building, pay salesmen, pay managers, and pay a receptionist. You don't think that is going into the price of your car? Buying direct in theory removes those costs and passes the savings on to the consumer.

I liken it to the first time I went to Vegas and my Dad made sure to remind me before I flew out that there's a reason those giant opulent casinos exist, and it's not because the gamblers usually win.

dingo
dingo

@mavdog @dingo I'm smart enough to know that if Tesla doesn't provide competitive value then I will be probably buying from one of the 16 competing major automobile manufacturers.

If the dealership brings value, I would buy from a dealership. I as a consumer will decide what is best for me. Instead of  some law maker getting his bread buttered down in Austin.


Since that is not possible at this point in time because of crony capitalism, I have other choices. I can boycott the listed contributing dealerships, I can write my state rep, I can denounce the representatives that are acting on behalf of the powerful few over the interest of the state as a whole.

I can go buy a jack, jack stands, and an oil filter wrench at Harbor Freight for less than $100.00 and purchase full synthetic oil at Walmart for $25.00 and be set on oil changes for 10,000 miles or one year after 15 minutes of work because cars need less service nowadays. There is less of a need for dealer service.

ScottsMerkin
ScottsMerkin topcommenter

@mavdog thats today, and they were all priced the same, no haggle no nothing.  

mavdog
mavdog topcommenter

@ScottsMerkin 

Apple isn't a very good analogy. They used a distribution channel of multiple vendors, and there was price variability for their product.

The consumer for an Apple product can go to the Apple store, or go to Best Buy, or Fry's, or Micro center, or go online to a variety of sites to purchase the very same item. there's competition.

ScottsMerkin
ScottsMerkin topcommenter

@mavdog and what is wrong with that?   Apple operated that way for years.  If you wanted their product, you paid their price.  If not you bought a less expensive samnsung or HTC

mavdog
mavdog topcommenter

@ScottsMerkin tesla would have a monopoly on tesla cars under the way they want to operate. if you want a tesla you have only 1 place to purchase one.

mavdog
mavdog topcommenter

@ScottsMerkin

I bet that schmuck who has $1000 more in his pocket feels it is "really advantageous".....

mavdog
mavdog topcommenter

@radicalbender

so you're position is a monopoly is more efficient and better for the consumer than an oligopoly?

that is contrary to basic economic theory.

ScottsMerkin
ScottsMerkin topcommenter

@mavdog @dingo but then I could buy a Tesla without haggling with some intermediary over the price and know I paid the same for my car as the guy next to me driving the same car.  Is it really advantageous to the consumer to make me drive or internet shop all across DFW to get the best deal and then realize the shmuck in his Honda paid $1000 less than me because he got to the right dealer on the right day?

mavdog
mavdog topcommenter

@dingo

uhh...if Tesla was the only vendor offering a new Tesla vehicle, it would be the only place for a consumer to purchase a new tesla vehicle.

but you are smart enough to know that, right?

radicalbender
radicalbender

@mavdog @lakewoodhobo This is a false equivalency. A more accurate comparison would be to compare Orbitz, Travelocity and Expedia, not the airlines themselves.

In this metaphor, it would be more apt to compare Tesla to Southwest, which cuts out all the middlemen entirely to save money.

Basic economics does not imply that competing middlemen ensure better prices for the end consumer, only that the additional costs of maintaining an extra layer of administration are passed on to the consumer.

The point is that the dealers make a lot of money on their oligopoly and they would very much like that to continue, no matter how inefficient it is.

dingo
dingo

@mavdog @lakewoodhobo Uhh...., Tesla is not the only source for cars, nor is it the only source for car service. 

But you knew that. Right?


MikeWestEast
MikeWestEast

@lakewoodhobo If I paid $75K plus tax for an airline ticket, I might use one.  I personally do not see the need for bypassing a dealer.  Just create one in the state.  Is it really that big a deal?  Just have the truck stop by on their way to the customer, "verify car is ready", and deliver it. 

mavdog
mavdog topcommenter

@lakewoodhobo 

when only 1 airline to buy that ticket from history tells us the price of that ticket is substantialy higher than when  there are multiple airlines competing.

if tesla itself is the only source for the car, they have no one to compete against. basic economics tells us the consumer will pay more when the seller doesn't have to compete against other sellers.

the issue of service is also important. if there is only 1 place to service the car, there is no competition and the vendor can charge whatever they want, the owner of the car has nowhere else to go. doubt there are any shops who have training in tesla yet, and it will be awhile until there will be.

again, what advantage can you point out to dismantling the current framework?

lakewoodhobo
lakewoodhobo

@mavdog @lakewoodhobo We can shop online now and don't need a middleman for every single purchase. Do you want to force us to use travel agents when we buy an airline ticket too?

Now Trending

Around The Web

From the Vault

 

General

Loading...