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North Carolina Senator Trying to Ban Tesla Sales

What a disconnect in North Caroline between its politicians and such nice people and culture! I have friends in the Research Triangle area who are definitely not onboard with what the NC legislature is doing. They are taking the state backwards.

I am surprised Tesla just doesn't take this to the high courts and end it.

http://www.forbes.com/sites/toddganos/2013/05/15/north-carolinas-threat-...

This is a great set up for a federal case. More free publicity and national spot light as a secondary benefit. All the better to get Tesla where it needs to go with its sales strategy.

jk2014 "This is a great set up for a federal case. More free publicity and national spot light as a secondary benefit. All the better to get Tesla where it needs to go with its sales strategy."

BIG +1

I live in the DC area and would fight for an opportunity to witness this.

Million Model S March

Looks like it may be found unconstitutional:

http://www.forbes.com/sites/toddganos/2013/05/15/north-carolinas-threat-...

You can blow me up now.

CapZap;
Perfectly clear and incontrovertible.

You know, this sounds like it could be applied to any state giving Tesla trouble.

Bone them all Tesla, you rock }BD

If customers of tesla banned states just go out of state to buy their Tesla's, those states banning the sale are the losers on many sources of income through taxes and employment generation. I think those states are in effect, shooting themselves in the foot.

@leykis - you should adjust your title. It isn't a Senator, it's the NC State Senate that voted for this. The measure would still have to pass their assembly and the Governor would then have to sign off on this. But this is a state issue, not a Federal issue at this point. However, if it did pass and become law in NC, then it may be a Federal issue if the US Commerce dept. steps in and delcares that NC cannot regulate interstate trade.

TheOnion - style article!

Auto Dealers Are Just Protecting Consumers Against Tesla:

"Robert Glaser, president of the North Carolina Automobile Dealers' Association...told ABC News ...'We just want them to play by the same set of rules that the other 7,000 dealers in the state do...All Tesla would need to do is to establish a franchise agreement with the dealer and send them cars..."

"It can be in a mall," said Glaser. "I just don't know why they don't do it."

Translation:

"I just don't know why Tesla doesn't fall in line, and pay us money for doing what they're already doing without us, so we can add biased and ignorant EV information, high pressure haggling, middleman costs, sales of high margin extended warranties and duplicate options like extra alarms on cars with alarms and magic paint protection. We just want Tesla to add the same unnecessary and higher-cost consumer experience that the other 7,000 dealers in the state do..."

Glaser then added "I just don't know why ABC News is not paying new-car dealers for these interviews. All ABC would need to do is to establish a interview agreement with us, and send us money."

He then scooped up all the magazines and free mints in ABC's reception area, and took ABC News writer Alexis Shaw hostage, offering to return all for "just $499/mo and your clean used trade-in. That is, if my manager approves your ridiculous, insulting low-ball offer."

Tim Jackson, president of the Colorado Automobile Dealers Association, agrees. "If Tesla were to fail, it would do great damage to the good reputation of all auto dealers," Jackson remarked, while kicking a walk-in customer's puppy in the groin.

"It's really all about protecting consumers," Jackson continued. "We had a silly misunderstanding with a customer that thought her annual interest rate was 2.8%, not 28%. But instead of repossessing, we hired her to keep the showroom clean. She will be able to work off the payments by early 2037. Would Tesla do that?" said Jackson, while stubbing out his cigar on the cleaning woman.

"We even gave a 1-week college scholarship to her oldest child, after her husband committed suicide over the loan losses. Besides, can you imagine Tesla supporting Little Leagues and the YMCA?" Jackson then defended the infinitesimal 0.007% of 2012 dealer association profits spent on the community as "more than child-hating Tesla would spend."

Jackson continued: "Some say $199 for an oil change is gouging. But clearly, small gouges inoculate the consumer against much larger dealer gouging down the road. One customer was upset over our $12,500 bill to replace a fuel pump and catalytic converter. If he had let us mini-gouge him, he would have been prepared, and we wouldn't have had to Taser him. Tesla leaves out these and many other parts, under the engineering doubletalk of "EVs don't need them." Eliminating regular gouging on service means Tesla robs consumers of this protective inoculation."

Pausing to eject an elderly couple from the showroom as "looky loos," Jackson concluded: "As you can see, consumers would be much worse off if Tesla bypassed dealers' hard won consumer dissection, er, protection function."

-----

Based on actual quotes from presidents of state dealer associations:

Tesla's Direct Sales Business Model Targeted By N.C. Bill
http://abcnews.go.com/Business/story?id=19176424#comment-901520011

Auto Dealers' Fight Against Tesla Stores: Elon Musk Weighs In Page 2
http://www.greencarreports.com/news/1080001_auto-dealers-fight-against-t...

Law would stop Tesla electric car sales in NC
http://www.newsobserver.com/2013/05/09/2883125/law-would-stop-tesla-elec...

More to the point, TM will certainly not contribute to the campaign kitty of enough state (and federal) pols to make up for or compete with the dealers'. It is the prospect of losing all that lobbying cash that drove the vote, IMO.

The ABC story says the bill would have had to be submitted to the NC House by the 16th to be considered and passed. Anyone know if that happened? Can't find any info.

Just noticed that the chairman of the NADA is from NC.

I am ashamed as a NC resident, what NC Auto Dealers are doing.

NC Auto dealers can not suppress innovation by legislation.

IF NC PASSES THE BILL IN THE HOUSE, IT WOULD NOT STAND IN THE HIGHER COURT. IT WOULD VIOLATES THE CONSTITUTION (INTERSTATE COMMERCE LAW).

GO TESLA GO.

Thank you Ed Musk for a great inovation. IF you get the price point lower, I will go to Virginia or DC to get the car.

"Brian H | MAY 19, 2013"

Do not worry, even if the NC passes the bill, it would not stand up in court. It violates the "interstate commerce law"

Tesla may have a fight on their hands as the dealers do not want a precedent set that could lead to their demise. Manufacturers would probably launch them tomorrow if they could and the dealers know that.

ps;
He may be El Musk, but he's definitely not Ed Musk.

Fascinating how dealer money goes in, proposed law comes out. I doubt that the proposed law has the support of the local constituents. Unless the lawmaker took a poll that he's not telling about, this is not politics but bribery.

Furthermore, lawmakers have little downside to passing stupid laws because the legal costs to the government and to companies does not come out of the lawmaker's pocket.

I wouldn't worry too much about such attempts at legislation. It's exactly the mortar-and-brick retail location issue. Did you know that Sears Roebuck faced incredible (and similar!) opposition when it started its mail order business? Retailers screamed that they should have to have stores (and store overhead)...that direct sales was unfair competition and bad for the consumer.

Nothing is new under the sun. Just TRY and have North Carolina halt the sale of a "green" automobile because of dealer bribes to the lawmakers....that would be the kiss of death for them.

It no win bill on many levels. But, the single biggest reason Tesla can't use the dealer model is the fundamental difference in service.

ICE car dealers make a majority of their revenue through servicing cars. Tesla's will prove to require a great deal less service. Service is not a profit center. It is not a money maker.

If dealers survive on service, then Tesla dealerships would be a bad business to get into. If it's a bad business to get into, then Tesla's won't find dealers to sell them, thus hurting sales dramatically.

The dealer model was designed around a different motor system, different era with different manufacture/dealer environment, in an internet-less consumer market place.

It won't work on a legal or economic level. Perfect storm for the bill, and national dealership resistance, to resoundingly fail.

Given this inevitable failure, I hope Tesla gets as much inexpensive publicity value from it as possible. Just gives another example of how Elon/Tesla squeeze a dollar out of 15 cents in terms of a&m. Literally, the news cycle has become the marketing division and this whole dealership debate will ensure this continues.

If a NC resident crosses the border and orders a Model S, gets delivery out of state, can he register the car in NC? Just wondering how far NC and TX are will go to ban Tesla from selling to the customer.

In the end it is about demand and supply. Look how much grass and crack is sold, in spite of the ban!

@jk2014 - excellent analysis.

When Elon said he had instructed Service Centers not to try and run at a profit, dealers everywhere must have gotten the vapors.

Racer Leilani Munter posted this link to an article she wrote regarding the NC legislation on her twitter it is definitely worth reading if you have not read it already

http://www.huffingtonpost.com/leilani-munter/tesla-north-carolina_b_3327...

The mentality of some of these states (including my home state of Texas) really reminds me of this clip from one of my favorite movies:
http://youtu.be/E5gwc4UizUc

@ ajamison.- Thanks for the link I definitely enjoyed reading that. Some great comments too. More in support than I expected!


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