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Governor Cuomo Announces Agreement with Automobile Dealers and Tesla Motors

GOVERNOR CUOMO ANNOUNCES AGREEMENT WITH AUTOMOBILE DEALERS AND TESLA MOTORS

(Update: Shoutout to Jtodman!)

Agreement encourages innovation and strengthens auto dealer franchises

Governor Andrew M. Cuomo today announced an agreement between Tesla Motors, the New York State Automobile Dealers Association and the Greater New York Automobile Dealers Association to resolve a dispute concerning how auto manufacturers can sell their products to consumers. Under the agreement, Tesla Motors will maintain their five currently licensed retail locations in New York State. Additional Tesla retail locations will be established under a strengthened dealer franchise law. Legislation to implement the agreement will be introduced with the support of leadership in the Senate and Assembly.

“Today’s agreement reaffirms New York's long-standing commitment to the dealer franchise system, while making sure New York remains a leader in spurring innovative businesses and encouraging zero emissions vehicle sales” said Governor Cuomo. “The agreement is a win-win for consumers, for the franchised auto dealers and manufacturers who play such a vital role in New York's economy, and for cutting edge companies like Tesla. I want to thank Lou Roberti of the New York State Automobile Dealers Association, Neale Kuperman of the Greater New York Automobile Dealers Association, and Elon Musk of Tesla for their willingness to work together to reach this agreement."

Lou Roberti, Chairman of the New York State Automobile Dealers Association said, "I am delighted that we have been able to come to this agreement. I want to thank Governor Cuomo for the leadership that he provided that brought this agreement together, as well as the leaders of the Senate and Assembly for their commitment to passing the necessary legislation. This agreement will serve as a model for other states as they consider how to accommodate Tesla and a distribution system that has served the public well. Franchised dealers provide price competition, a ready source of trained technicians and parts for repairs and recalls, and create a market for trade-ins. Franchised dealers also provide thousands of good paying jobs in communities throughout the State. I know I speak for NYSADA’s more than 1,000 franchise dealers and their hard working employees when I say that this is great achievement for all involved."

Neale Kuperman, Chairman of the Greater New York Automobile Dealers Association said, “On behalf of the more than 400 dealers and our roughly 33,000 employees, the Greater New York Automobile Dealership Association and I want to thank Governor Cuomo, Speaker Silver, Majority Leaders Skelos and Klein, and our sponsors, Senator Libous and Assemblyman Gantt for their commitment to a strong franchised dealer system. This reaffirms the State’s long standing goal that cars sold through the dealer-franchise system serve the consumer and their best interests. This legislation will assist the Greater New York Automobile Dealers Association and our commitment to providing strong customer service while we continue to grow the market for environmentally friendly zero emission vehicles.”

Diarmuid O'Connell, Vice President, Corporate Development, Tesla Motors, said, “We'd like to thank Governor Cuomo for his leadership in architecting an agreement whereby Tesla will be able to continue to sell vehicles in its five retail stores in New York State. Under the Governor's leadership, Tesla, the New York franchise dealers and other interested parties were able to engage in a productive dialogue which resulted in a compromise that protects franchise dealers’ existing business while allowing Tesla to continue to pursue its mission of catalyzing the market for sustainable transportation. We also appreciate that many members of the Legislature were open to our message and supported a constructive solution. In particular, we are grateful for the support of Assemblyman David Buchwald, who represents a district in which three Tesla facilities are located. Tesla looks forward to a future in which it can continue to create jobs and invest in New York’s economy while accelerating the transition to sustainable transportation.”

"The country and New York need more clean energy solutions for transportation," said Richard Schrader, the political and legislative director for NRDC NY. "It's good for New York's economy, consumers and environment that this legislation is keeping an electric car innovator in the state."

Senator Tom Libous said, “It’s important that we protect auto dealers and their thousands of employees across New York but also welcome Tesla into the business community. I’m glad we could come to an agreement that works for Tesla, the New York State Automobile Dealers Association and the Greater New York State Automobile Dealers Association. As the Senate sponsor of this legislation, I appreciate their willingness to compromise and come to a resolution.”

Senator Joe Robach said, “I am happy to see that all involved parties were able to come to an agreement. The important thing, as with any major purchase, is that policies are in place to protect the consumers while allowing access to products. I applaud Governor Cuomo, Tesla Motors, the New York State Automobile Dealers Association and the Greater New York Automobile Dealers Association for reaching an agreement that will benefit all parties, including the people of New York.”

Assemblyman David Gantt said, "This agreement is a great step forward not only for Tesla and the State’s auto dealers, but for the State’s consumers as well. Thanks to the collaborative effort of the Assembly, Governor Cuomo, Tesla, the New York State Automobile Dealers Association and the Greater New York Automobile Dealers Association an agreement has been reached which benefits all New Yorkers. I will continue working with my colleagues to ensure the successful passage of this legislation."

Confirms the auto dealer model needs to purchase government protection in order to survive.

Sounds like a win for Tesla and a complete stab in the back for future consumers.

"Under the agreement, Tesla Motors will maintain their five currently licensed retail locations in New York State. Additional Tesla retail locations will be established under a strengthened dealer franchise law."

Can anybody find a good explanation of what this means?

Sounds like Tesla gets to keep their existing stores, but might be required to go through franchises for additional stores?

Sounds like they closed some loopholes.

Restating the question from EQC in a different way, suppose Tesla would like to add more stores. Does that mean that those will have to "be established under a strengthened dealer franchise law" such that they will be (shudder) Tesla Dealers?

As in -- Hicksville Chevy / Ford / Subaru / Tesla? (I made that up.)

It's good that Tesla gets to keep what it has.

I would like to know what it means beyond that.

This is a huge win for Tesla. Live to fight another day tomorrow.

Yeah, "strengthened dealer franchise law" this is the scary part.

And this "Today’s agreement reaffirms New York's long-standing commitment to the dealer franchise system".

So, until we see the actual language, I'm cautiously optimistic for Tesla, but sad for the future consumers of NY. No paradigm shift for future consumers, just the dealer model getting even more entrenched. We need just one state, or the Federal government to put an end to this horrible, crony-capitalistic, consumer hurting model.

:-/

The 5 locations they have are all "downstate" - within 50 miles of NYC.

“Today’s agreement reaffirms New York's long-standing commitment to the dealer franchise system, while making sure New York remains a leader in spurring innovative businesses and encouraging zero emissions vehicle sales” said Governor Cuomo.

Is it just me or does the first half of this sentence contradict the second half? :) I am also curious what the newly strengthened franchise laws entail.

O, there are so many ways that is contradictory/wrong.

dealer != innovative
franchise system != business (they are robbers)

Newly strengthened probably means, here Tesla, we'll throw you a bone...meanwhile we'll make sure nobody else (new car companies or old) will threaten the existing dealers.

Stay tuned.

Probably some cut out for manufacturers who do not have franchises.

The franchise laws are to protect franchises from manufacturers whose product they hold a franchise to sell. Strengthen them all you want NY just do not apply them to a company that does not have any franchised dealers.

I think Tesla could care less if NY strengthen the laws as long as they still apply to franchises and THEIR manufacturers.

I would need to know the content before commenting.

I looks, on the surface, like Tesla would rather negotiate than fight in court. So this looks bad for the future would-be-direct-sellers after the fashion of Washington.

Love this quote:

Senator Tom Libous said, “It’s important that we protect auto dealers and their thousands of employees across New York..."

Why? What happens if you don't protect them? Won't they be forced to work harder, provide a better service, be more competitive? Isn't that the American way and in the best interest of the consumer.

The reality is they want to protect the jobs of the existing establishment whose dollars fill their coffers. They don't care about the jobs that the innovative upstart who provides a better product and service will create because that upstart does not pay them.

Tesla has had a run of great news today!!!

The dealers know that all they can do is slow down the transition away from their very unpopular protectionist laws...

Every sell that Tesla makes direct is a chip away from the dealer's foundation...

I think that the dealers are learning that when they win a battle the backlash in public opinion put them one step close to losing the war....

Great win for Tesla. With 1000's of Model S driving the electrified highway this summer and in future, the job of selling a car will just get easier. Marketing through Social media is powerful and working for Tesla. Plus, Model S draws the crowd towards itself, no need to put out helium balloons in the parking lot, at-least not for Tesla.

Way to go TSLA & Elon.

More great news today and just think. Tesla has not spent a dime on advertising. All the free PR and sales have yet to begin in China. When more superchargers are installed in Europe that market will explode since the cost of gas is 2X that in the US.

Sounds like Tesla keeps the monopoly of direct internet sales while blocking other auto manufacturers from doing the same. Win for TM.

Maybe Tesla should open up a store in West Stockbridge, MA to cover Albany, NY (good jobs for Massachusetts) and another in Erie, PA to cover Buffalo (good jobs for Pennsylvania), if New York doesn't want those jobs in New York.

Perhaps TM needs no more "stores" in the state. As long as it can sell anywhere, and establish SCs to do deliveries, ...

Tesla is between a rock (New Jersey) and a hard place (Connecticut). They had to take anything they could get in New York.

What the moronic dealers and state legislators are going to learn is when a consumer wants to buy a Tesla their stupid laws can't do a thing from preventing a consumer from buying the car they want with their hard earned money.

Ugh. Good that Tesla keeps its stores, but I bet you they open ZERO MORE, and just open up a few galleries, maybe. It's a limited win for the dealers and a limited not-quite-loss for Tesla, IMHO.

They can "protect" dealers without forcing Tesla to use them...insane, that would be like requiring Apple to not open Apple stores and instead forcing them to only sell through Microcenter.

I wrote this to my AZ. legislators today. As many here already know Arizona currently prohibits the direct sales model employed by Tesla as well. To them, I wrote the following;

---------------------------------------------------------

""The existing franchise “laws at their core” were first proposed and lobbied for by the dealers themselves as a means to ensure that the manufacturer could not be in competition with them. They were trying to protect their own interests. Additionally at the time of these proposals there were no laws requiring manufacturers to utilize a franchise system.

The manufacturers essentially created their own monster in enlisting the “then” help of and utilizing franchises to increase their footprint without using their own funds.

Subsequently the franchises took on a life of their own and when they came under pressure from manufacturers who had realized that they had essentially lost the handle on controlling their brand image those same franchises banded together against manufacturer control and became too big to fail.

Flash Forward… Along comes Tesla (note I could find no reference to “any” law requiring a “NEW” manufacturer to utilize the franchise system)

As has been said elsewhere, Tesla HAS NO franchises which would come under the protections of existing law “as current dealers do” Tesla cannot compete against it’s own dealers because it has none!! ALSO dealer or franchise protections were not intended to protect any dealer against an un franchised competitor

You can still purchase a Tesla anywhere in the United States and they will deliver the car to you. They have Service rangers to accomodate repair requirements etc.

GM etc. have no grounds to cry foul as they were the ones who created the monster known as their dealer network to gain fast $$ and market footprint years ago.

For these reasons the argument being raised by established manufacturers that somehow Tesla is getting a pass by selling direct is flawed. The laws with regard to automotive start ups is at it’s core the same today as it was 100 years ago.

In closing . What are the Dealers / Manufacturers so afraid of? If their franchise model is as great as they would have us believe then surely a small start up such as Tesla cannot possibly compete.

I submit that they DO think Tesla can compete and they are seeing the handwriting on the wall that trading total control of their brands to a franchise system years ago for profit is now coming back to bite them on the backside due to being handcuffed by laws they themselves brought about

Do you REALLY want to be told how you have to purchase your vehicles? My guess is that 100% of Americans would answer no to that question. Well folks here is a newsflash GM Ford Chrysler etc. etc. know that too.""

I live in the Rochester area and have an S 85.
There are no galleries or service centers within 240 miles. Even Toronto which can't service US cars.
I wonder why Robach and Gantt have anything to contribute at all?


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