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"... Being named the Best State for Doing Business eight years running isn't easy, but when you provide an economic climate that stimulates innovation and not a crippling regulatory environment that stifles business, people notice.

Zero state income tax, low overall tax burden, sensible regulations and fair legal system are just the things Texas offers to get your business moving. So come to Texas – where Business Moves.

Welcome to Texas,

Governor Rick Perry"

That is, if, you are not a company called Tesla Motors!

Here is how to get around this hiccup. RENT cars by the Hour. Then, it is not a test drive or a sales pitch, just a "rental" business. And for a nice "in your face Texas Style" middle finger, run it out of the building mentioned below.

Steps from the Texas State Capitol, Space 500, 1108 Lavaca St, Austin, TX, in theTexas Automobile Association Building, may be available (Texas Auto Dealers Association has Suite 800). It comes with 14 parking spaces! Buy a Texas shell corp. to negotiate the lease, use the best Texas real estate law firm to spell out a contract they will learn to hate, complete with clauses requiring non negotiable penalties plus daily interest to ensure free and unobstructed access to the parking 24/7. Run your "rental" business out of the same building!

Too much fun!

Just trying to increase my shareholder value. I am happy to help with any other problems.

Sincerely,

Patrick

Tesla has been selling cars and supporting customers in Texas - and in other states with dealership laws. It just requires creativity to workaround the laws that were set up to protect the dealerships from manufacturers selling directly to customers. This isn't anything new - and Tesla has known this all along, and is set up to provide sales and service support to customers in those states - it's just not as effective since they can't have a direct presence in those states.

While Musk didn't win the Tesla exception law this time around, he was able to get laws passed to provide support for SpaceX building a spaceport in south Texas.

Two years from now, when the legislature meets again - Tesla will have a much stronger argument for getting an exception to the dealership laws. By then, there should be many more customers - who'll be able to testify how the current laws harm Tesla's customers much more than Tesla - since Tesla has been operating without the exception.

Texas protecting its oil fields? Sooo surprising. You are BIGGER than that.

Someone suggested at today's stockholders' meeting that Tesla implement an incentive referral program for owners. I would suggest starting with Texas, North Carolina, and Virginia.

The rental car is a good idea - unless there are "franchise laws" to prevent it. But rent it for one or two weeks only, because that is about the time it takes to not wanting to get back in the old car. As Elon said people will revolt, question is how to foster it.

Why not just put 100 miles or so on the cars and sell them on a "used" case lot with a "new" car warranty?

Case = car (and when will this forum get an edit function - not to mention search - and, yes, I know about Volker)

Original posters have an edit option up top near the logo.

The forum will have search function probably the same time the music storage is available and the map points in the direcdtion of travel.

I just sent an email to Joe Straus, the Texas Speaker of the House, to explain why Texas is stifling new industry for the private interests.

I know the answer, I'm just wondering how he'll explain it, if he answers at all.

Anybody from Texas here? I am just wondering if the ban on dealerships has any effect is stopping them from ordering a Model S. X?

I do not see why it is such a big deal, except for the test drive. Most magazines have done the test drive. The car can be seen in the show rooms in Texas... you can touch and feel. Service is available if needed.

I ordered my Tesla Model S this week and I live in Dallas Texas.

I was not going to let the Dealership law stop me, but it definitely does make everything more complicated. Luckily, I got a test drive from a friendly Tesla owner which reaffirmed my choice in ordering a Tesla.

It was annoying, however, to go visit the Service Center and Galleries because the staff is not allowed to answer some of the technical and financial questions I asked.

Additionally... I am planning on doing Tesla Financing. Unfortunately, to accomplish this, while still having the car delivered to Texas, I will have to fly to Oregon to sign my paperwork (This is a huge hassle).

But Tesla makes such a compelling car, that all of the hassle is worth it for me. Hopefully these stupid laws will change soon!

Super, I am glad you were able to get around the restrictions in Texas.

http://www.forbes.com/sites/pikeresearch/2013/06/05/dealers-fight-tesla-...

http://www.greencarreports.com/news/1084212_north-carolina-wants-to-make...

It is worse in North Carolina. They are in the process of passing a law that bans e-mail, or other electronic communication with Tesla. This has gone too far.

Any lawyers in this board care to comment?

Super,
By getting the car in Oregon, are you going to be able to avoid Texas sales tax? Or does Texas not have sales tax? IMHO, it would serve Texas right to lose the sales tax.

I received my car in Texas in January. I've heard the process has improved some since then.

Most of the problems were on Tesla's side at that time - they weren't very organized in sending the necessary paperwork - which came in multiple FedEx shipments - with no advanced warning - and no tracking information - the envelopes would magically show up at my front door - so there was more angst than necessary in the process, because Tesla didn't keep me informed on the status of the paperwork or when it was being shipped to me.

Overall, I've found the impact of not having a dealership in Texas hasn't been a huge problem:

Can't do test drives (at least so far) from the Tesla stores, though Tesla should be able to offer periodic test drive events to workaround this.

Can't purchase car directly at the Tesla store - not really a big deal, since it's easy to order the car through the website.

Delivery is done to your house - not at the dealership - again, not a big deal, and actually was pretty cool to have the truck roll up to the house - and have the car delivered there - rather than having to go to a dealer.

Registering the car requires a few extra steps. This doesn't slow down the ability to drive the car - just requires one or two trips to the county tax office to pay the sales tax and get the temporary & permanent plates. Again - this really wasn't a big deal - and not much different than what you'd do if you were buying a used car.

Can't contact the service center directly - all calls are routed through Tesla HQ. This is a little annoying, but so far hasn't been a big deal.

Bottom line - it is a little inconvenient not to have a dealership for Tesla - but Tesla can still do quite a bit on their end to minimize the issues. And now that I've had the car for a few months - all of these inconveniences are inconsequential compared to driving the Model S everyday!

By getting the car in Oregon, I can still accomplish the Tesla Financing and still allow the car to be delivered to the service center in Dallas texas without any extra delivery fees.

I am not sure how the tax situation will work, but I will post my process on here.

In the meantime I am going to be fighting and doing anything and everything I can to help Tesla's situation here in Texas. There must be some way to beat these scumbag car dealerships!!

bp;
Tesla has no dealers. Anywhere. There are stores, galleries, and service centers.

Correct - Tesla doesn't have a dealership in Texas - and the lack of having a dealership in the middle hasn't been a major problem in either purchasing or servicing my Model S.

It's all about the TEST DRIVE.

Elon says that 25% of all test drives turn into orders, therefore, not having Test drives in Texas, VA, NC etc WILL reduce orders in those states.

It's not about delivery, ordering etc.

What are the plans for adding a supercharge station between Houston and Austin?

bp;
Tesla doesn't have a STORE there. Stop with the "dealer" terminology. A dealer is an independent businessman selling product. There are no Tesla dealers, anywhere in the world.

+1 On the rental idea.

Also like to see a private test drive club in NC. They seem to be going power crazy there. At some point NC will/have overstep/ed the Constitution.

A good place to start with a law suit is also NC. I mean barring e-communication ? What happened to Freedom of Association ?

How about a, NC Buy A Tesla Vacation Package ? Tour the factory, test drive the car, do purchase and delivery paperwork, see other tourist sites like Disney, humpback whales , Hollywood Studios, Universal/Paramount Park, Venice Beach, etc.

Hold Test Drive Private Teslas and Petition Rally/s at NC state Capitol. Great publicity ! This is what your State Legislature is trying to protect you from , the world's greatest car ! The best buyer's experience and customer service in the industry ! Etc, etc.

Have Elon visit the one of the NC Tesla Test Drive & Petition Rallies at the end of his national, supercharger, cross country, family vacation to greatly increase publicity.

Elon could meet with supporters, and in my opinion, create great world wide publicity ! Elon could talk to locals about how they feel about the NC pending law and if the NC public agrees with it, ask locals what they would like him to do about it. Then try to meet with NC legislators about the issue hold a press conference etc.

I have an idea which I would like to share with you guys.

A number of people who live in the state of Texas already have bought their Tesla Model S. In fact they use it already. What if these local Texans would help Tesla Motors to realise test drives for new customers?

I don't know how many people in the state of Texas do already own a Tesla Model S. But I can imagine that a number of people would not mind doing that. In fact this is already what is happening today (owners let their friends, family, neighbours etc. do a test drive in their Tesla Model S).

The shop/gallery is to educate new customers. And test drives can be realised via existing owners of a Tesla Model S.

And you know what, when a person does decide to actually buy a Tesla Model S, then the existing owner could get $100 from Tesla Motors for having done the test drive. How about that?

There's nothing illegal about that, is there?

The Commerce Clause in the US Constitution could help in this situation.

"In the consolidated cases of Granholm v Heald and Swedenburg v Kelly, involving challenges to Michigan and New York laws respectively, the Supreme Court considered whether the 21st Amendment gave states the power to discriminate against out-of-state liquor distributers in ways that would otherwise clearly violate the Commerce Clause. In its 2005 decision, the Supreme Court, on a 5-4 vote, found that state laws that prohibited out-of-state wineries from selling wine over the Internet directly to consumers violated the Commerce Clause. " http://law2.umkc.edu/faculty/projects/ftrials/conlaw/statecommerce.htm

"North Carolina's Threat To Tesla Likely Unconstitutional"
http://www.forbes.com/sites/toddganos/2013/05/15/north-carolinas-threat-...

Gerald R. Bodisch, Economist, Antitrust Division, U.S. Department of Justice, wrote a paper that advocates eliminating state bans on direct manufacturer sales in order to provide automakers with an opportunity to reduce inventories and distribution costs by better matching production with consumer preferences titled "Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers"
http://www.justice.gov/atr/public/eag/246374.htm

Jason Sorens,Ph.D (Yale), currently teaching at University at Buffalo (SUNY) , writes about this very subject in "Interstate Protectionism and the Dormant Commerce Clause"
http://pileusblog.wordpress.com/2013/05/07/interstate-protectionism-and-...

If Tesla sues in federal court, it should be an interesting show, as they will probably acquire an odd assortment of allies merely on the principle of the matter, that, protectionism has no place in a free market. Unfortunately, car dealers are mostly members of the "1% Club" and combined wield hefty clout wherever they choose to focus their interest. Consequently , it will be an expensive fight.

Therefore, It will be important for those of us, who believe in Tesla as more than a company, but as a cause or symbol of how things should be, to rally alongside and be supportive in whatever way we can. And for those who just think it is a great future investment and who are just out to make a ton of money, they should protect their investment by doing likewise. Further, if one is just a customer you can cover your butt by helping too.

I think Tesla should accept that the dealer associations in these states are going to resist Tesla selling direct. Find people who like us believe in the Tesla model enough to invest for the first time in opening a car dealership. Then they are not hurting their other car lines by selling Tesla they only want to sell Tesla. These would be truly independent dealerships and comply with the laws in these states, right? Having a middleman will either hurt profit margins or increase the cost to the buyers unfortunately but it is better than writing those states off. With a well thought out franchise agreement Tesla dealerships could be partners in these states to help work around the laws while maintaining the Tesla store experience.

Somewhat OT, but relevant:

I seem to remember when McDonald's was mostly represented by franchisees. Although their contracts required use of McDonald's supplied potatoes, etc, there was a lot less control of prices and service. This non-uniformity led to QC problems which McDonald's chose to address by building and running new restaurants themselves, and not renewing franchise agreements. However, some franchisees have very long contracts, or are in small markets, and are still in business. One such restaurant is in my city. They do not honor many (most?) coupons or other nationally advertised sales. $1 coffee, any size? Not going to happen.

IMO, auto dealers aren't really worried very much about Tesla, at least in the short-term. They're worried about the manufacturer(s) they represent. As suggested, most manufacturers would make more money and provide better service if they didn't have a zillion dealers representing their products.

jongable: I think Tesla should accept that the dealer associations in these states are going to resist Tesla selling direct.

I disagree. The dealer associations are wrong. They will be shown to be in the wrong, publicly and embarrisingly, if this goes to the Supreme Court (due to Commerce Clause).

Tesla knows it is in the right. Customers know Tesla is in the right. Dealers are trying to protect a 20th century model. And they will fail.

And the people will rejoice. :)

I agree that the dealer associations are wrong. It's bullsh!t what they are doing, but courts and legislatures move very slowly and can be bought. Tesla wouldn't have these problems if it were not for the lobbyists of these dealer associations. Rather than waste time fighting the system comply with the right partners and move on.

Tesla does have stores in Houston and Austin, where you can purchase Tesla products - you just can't order cars from them - but you can purchase Tesla accessories. The rest of the state doesn't have any stores at all - and that's not preventing people from buying Model S...

Having purchased cars through dealers - and direct from Tesla online - as long as Tesla fixes the problems in the registration process (which I believe they've done since I got my car in January) - the dealer issue really isn't a big problem.

While the legislature didn't pass an exception for Tesla from the dealership laws - the status quo isn't too bad - and won't prevent Tesla from selling many cars in Texas - and the next time the legislature meets in two years, Tesla will have a large group of owners to help them lobby for change.

Bp, why do you want Tesla to fix the problems of the government of Texas?

TI Sailor,

McDonalds is still almost exclusively a franchisee-run store model. More than 85% of McDonalds are franchises, with most of the rest taken back temporarily while McDonalds finds new owners. McDonalds is very tight on its franchise supervision process so everything is standardized. Virtually all national restaurant chains have found that dealing with local health and licensing regulations is best left up to local owners. No significant exceptions.

@P-D

Thanks for the correction. My information was obviously mistaken. Made sense, but wrong.


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