[HN Gopher] Tesla opens a center on Native American land, sellin...
___________________________________________________________________
Tesla opens a center on Native American land, selling cars straight
to consumers
Author : nixass
Score : 118 points
Date : 2021-09-13 19:24 UTC (3 hours ago)
(HTM) web link (www.businessinsider.com)
(TXT) w3m dump (www.businessinsider.com)
| ilamont wrote:
| If Tesla can activate their own showrooms in more reservations
| across the U.S. and drive a stake through the heart of third-
| party dealerships, that's a positive development.
|
| I hope that Tesla (and other auto manufacturers) can go one step
| further and provide lasting, meaningful employment and other
| opportunities to local residents in the reservations. Casinos
| often fail or extract exploitative concessions and demands on
| local tribes.
| protomyth wrote:
| The one problem is many reservations are nowhere near cities.
| The federal government tended to want to put Native Americans
| on land away from the settlers.
|
| The other problem is how the tribe implemented its TERO (Tribal
| Employment Rights Ordinance or Office) rules. They can often be
| particularly odious to business ventures on the reservation.
| MomoXenosaga wrote:
| Yes but thanks to Andrew Jackson most reservations are in the
| flyover states in the middle of nowhere far away from the big
| metro areas. So I'm not sure if it will matter much.
|
| I hazard a guess that Tesla's are sold on the East and West
| coast.
| stumpedonalog wrote:
| Hmm... the Salt River reservation is nearly downtown Phoenix.
| It covers like a fourth of the metro area.
| perl4ever wrote:
| https://en.wikipedia.org/wiki/Shinnecock_Reservation
|
| I think there are multiple reservations in San Diego County.
| e.g. https://en.wikipedia.org/wiki/Pala_Indian_Reservation, h
| ttps://en.wikipedia.org/wiki/Rincon_Band_of_Luise%C3%B1o_In..
| .
|
| There are also reservations in Riverside Country - isn't that
| close to LA? e.g. https://en.wikipedia.org/wiki/Agua_Caliente
| _Band_of_Cahuilla...
| pengaru wrote:
| There's a small res casino practically inside Joshua Tree
| National Park at 29 Palms.
| JaggedJax wrote:
| With a Tesla Supercharger at it!
| ethagknight wrote:
| This is wrong, reservations or tribals lands are sometimes
| within the greater MSA of some cities or otherwise adjacent
| to populous areas, (Tulsa is the most prominent example,
| Kansas City, south Florida Miami area, Mobile AL, Charlotte
| NC to list a few). In the context of the dealership laws,
| these are significant exceptions.
|
| Of the 10 states with outright bans on manufacturer sales,
| all but Texas and West Virginia have tribal lands that
| theoretically could be used as a helpful loophole to this
| protectionism. Maybe not always Tesla's the first choice of
| location, but a 50 mi drive beats a 300 mile drive, and
| sufficient to break the teeth of these laws.
|
| Please dont be dismissive of "flyover states." The lack of
| dealerships and service centers certainly impairs the sales
| process, and then California's extremely generous (and
| unnecessary?) EV incentive gives many people from other
| states an incentive jump through some hoops and papering to
| purchase and title their vehicle there.
| rootusrootus wrote:
| > drive a stake through the heart of third-party dealerships,
| that's a positive development.
|
| For Tesla to kill third-party dealers, they'd have to do
| everything third-party dealers do, and then they'd be
| indistinguishable from third-party dealers.
|
| It's fashionable to think Tesla has the Better Way and that
| auto dealers are universally bad, but consumers largely don't
| agree.
| devnulll wrote:
| I'm probably in the Minority here, but I prefer the
| franchised dealer model over Tesla's for 2 reasons:
|
| 1. When I've a Tesla problem, they simply don't respond. They
| don't answer emails. They don't answer the phone. They don't
| return calls. It's literally impossible to remedy a problem.
| It took 6 months of unbelievable frustration to resolve an
| obviously incorrect lease issue ("You owe X.", "No, I already
| paid. Here are the receipts."). This same issue with a BMW,
| Porsche, or Lexus is resolved in 2 minutes in a normal model.
|
| 2. The franchise model - at a maco level - keeps more money
| locally. I like money staying local, seeing kids sports teams
| sponsored by Bob's Ford, and generally support anything that
| promotes a broader distribution of wealth. The extraction of
| wealth out of a community and simply concentrated up to the
| already mega-wealthy disturbing. This is Standard Oil putting
| local gas stations out of business by price dumping, only to
| later swoop in unchallenged.
| yupper32 wrote:
| > It's fashionable to think Tesla has the Better Way and that
| auto dealers are universally bad, but consumers largely don't
| agree.
|
| There wouldn't need to be laws restricting Tesla from selling
| direct to consumer if that was the case.
|
| Let the consumer decide what they want.
| Splendor wrote:
| > There wouldn't need to be laws restricting Tesla from
| selling direct to consumer if that was the case.
|
| That's just not true. Consumers wouldn't have a choice if
| an automaker was allowed to make their new vehicles only
| available from a direct showroom.
| oh_sigh wrote:
| They would have a choice of buying one of the numerous
| other car brands out there.
|
| I don't have a choice when it comes to buying a tesla -
| am I losing out as a consumer?
| yupper32 wrote:
| Sorry what value does a third party showroom provide that
| a direct showroom wouldn't?
|
| And currently car companies compete with each other. If
| one saw third party showrooms as something the consumer
| wants, then they would continue doing it to compete.
| URSpider94 wrote:
| They don't have to do this in most states. Only a few states
| have laws against selling cars factory-direct.
| lotsofpulp wrote:
| https://finance.yahoo.com/news/cant-buy-tesla-
| states-1613182...
|
| As of Oct 2018.
|
| >Where Tesla is banned
|
| >Here are those states: Alabama, Arkansas, Connecticut, Iowa,
| Kansas, Kentucky, Louisiana, Michigan, Montana, Nebraska, New
| Mexico, North Dakota, Oklahoma, South Carolina, South Dakota,
| and Texas.
|
| >Then there are nine states that limit the number of
| dealerships Tesla can open: Colorado (limit: one), North
| Carolina (one), Virginia (two), Georgia (five), Maryland
| (four), New Jersey (four), New York (five), Ohio (three),
| Pennsylvania (five).
| KingMachiavelli wrote:
| In Colorado there is no limit as of 2020 for Tesla. Any EV-
| only manufacture is allowed to direct sell in CO.
| delecti wrote:
| If my count is correct, that's a full half of states in
| total. And the states in the second group are all large
| enough that it's a meaningful limit to be only allowed a
| handful. For comparison, there are 7 Toyota dealerships
| just between the Denver and Boulder Colorado areas (using
| their "find a dealer" tool makes it hard to be more
| thorough than that).
| jillesvangurp wrote:
| I'm guessing the Texas situation might change given how
| much Tesla and SpaceX are investing in Texas right now.
| alasdair_ wrote:
| New laws and loopholes and being created for car dealerships even
| today. For example, WA state has a new Capital Gains tax of 7%
| that applies to almost every gain in the state except for
| personal homes and... car dealership sales.
| ur-whale wrote:
| This is really nice.
|
| And more generally speaking, having much smaller states where you
| could drive 10mn to the state next door to do things your own is
| too dumb or too corrupt to let happen is a fantastic idea.
|
| Competition FTW !
| awolnikowski wrote:
| That's basically New England; in college we would make the
| short drive from Connecticut to Massachusetts for legal weed
| all the time!
| wellthisisgreat wrote:
| What is the charitable excuse for the law that enforces the use
| of third-party car dealerships?
|
| Something about avoiding monopolies?
| RC_ITR wrote:
| I mean this is very Anti-HN zeitgeist, but it's a way to
| preserve easily accessible middle class jobs and prevent local
| profit pools from accruing to corporations headquartered
| elsewhere.
|
| From a consumer perspective it reduces welfare (like most
| worker protections do), but similar to real estate agents, car
| dealerships are very active in lobbying local governments (in
| part b/c the amount of jobs they 'create').
| mensetmanusman wrote:
| For every $500k we spend subsidizing dealers (according to
| economic studies), we waste resources that could be used to
| grow the middle class.
| KoftaBob wrote:
| > a way to preserve easily accessible middle class jobs
|
| Wouldn't direct sales locations/showrooms operated by the
| manufacturers still need to hire salespeople, as well as
| automotive technicians to do the maintenance?
|
| It seems that the jobs wouldn't necessarily be affected, the
| owners of the dealerships are the ones who would lose out on
| revenue.
| coredog64 wrote:
| Not just jobs, but also sales tax revenue. Cities have their
| own sales taxes and/or get a cut of the overall take. Better
| to have that come from a local business to maximize your
| take.
| janderson215 wrote:
| It's an outdated law (IMO) meant to protect car dealerships
| from manufacturers opening up dealerships down the road and
| undercutting them.
|
| I think it's similar to the law preventing movie studios from
| opening theaters.
| belltaco wrote:
| That plus heavy lobbying and donations by car dealerships
| making a lot of money. Electric cars are also bad for their
| fat profit margins on service for ICE cars.
| lotsofpulp wrote:
| https://en.wikipedia.org/wiki/United_States_v._Paramount_Pic.
| ...
|
| The "Paramount Decree" is lifted as of Aug 7, 2020 with a 2
| year sunset period, so as of Aug 7, 2022, there is no law
| preventing studios from owning theaters.
| PaulDavisThe1st wrote:
| In what sense is it outdated? What has changed that means
| that it used to be relevant, and now no longer is?
| trey-jones wrote:
| Maybe only perspective. In my view, car manufacturers
| should be competing with other car manufacturers, rather
| than independently operated dealerships. If a dealership
| provides a value to consumers then it should survive. If
| not, then the consumers are better off without them.
|
| At the very least, I would like the _option_ to buy
| directly, since I probably don 't use the services provided
| by the dealership anyway.
| jsight wrote:
| If I wanted the status quo, I'd argue that dealers have
| gained enough power to accomplish the same thing without
| state laws. Look at what happened when US manufacturers
| tried to decrease the number of dealerships for an example.
| They fought it out with a barrage of lawsuits and the
| efforts were only really minimally successful.
|
| Its really unlikely that existing brands would be able to
| change at this point, at least the US brands.
| janderson215 wrote:
| Emphasizing that it is my opinion, I think it's easier to
| reach consumers directly. I haven't researched the history
| of car dealerships, but I'm guessing (dangerous) that they
| came into existence because the locals knew the local
| market better. Now that they exist, they need to be
| protected to prevent too much unemployment too fast in
| local job markets. Anecdotal, but I haven't heard people
| talking about the wonderful experience they recently had at
| their car dealership. I think some of that comes from legal
| protections and getting comfy.
| rkk3 wrote:
| and selling the exact same product to consumers for
| widely different amounts.
| reacharavindh wrote:
| Suddenly Movie studios:theaters::Apple:AppStore comes to
| mind.
| mschuster91 wrote:
| The most interesting part re/ movie studios is Disney. I
| seriously wonder when someone finally brings down the
| hammer on them... they own the production companies, the
| studios, the after-market entetainment (Disney World) and
| _so many_ franchises that they can outright extort cinema
| owners to licensing terms that are _extremely_ favorable
| towards Disney.
|
| MCU, Star Wars, Avatar... get blocked from showing them as
| a cinema owner and you can close shop. Especially with how
| many new films the MCU alone will bring up over the next
| years.
| lotsofpulp wrote:
| >I seriously wonder when someone finally brings down the
| hammer on them
|
| Probably not anytime soon, since in less than a year,
| they will be able to own the cinemas.
| throwaway894345 wrote:
| I don't know why this is downvoted. I'm similarly confused. I'm
| guessing it's less about avoiding monopolies and more about
| making sure more of the money stays in the state, but I'm just
| speculating.
| djrogers wrote:
| There's very little (if any) income at a dealership that
| couldn't be captured by a state with the right tax structure,
| and that would apply to a manufacturer owned dealership just
| as much as a private one.
|
| It seems like the only person really losing in that scenario
| would be the dealership owner, which explains why they lobby
| so heavily to keep those laws in place.
| lotsofpulp wrote:
| > it's less about avoiding monopolies and more about making
| sure more of the money stays in the state, but I'm just
| speculating.
|
| If that was the goal, then the state government should have
| opened their own dealerships and distributed the profits
| amongst the state's residents. Or better yet, simply operated
| the dealership at break even.
| colinmhayes wrote:
| Americans generally don't like the government running
| things that aren't natural monopolies.
| URSpider94 wrote:
| Car manufacturers contracted with car dealers back when the car
| business was uncertain - they needed a local dealer network to
| sell and service their cars. Once dealers were established,
| they lobbied to get laws in place to prevent them from being
| disintermediated by the manufacturers, who could have easily
| just put them out of business and replaced them with
| manufacturer-owned stores.
|
| Not a great reason ...
| fnord77 wrote:
| > He told The New Mexican that the state's auto dealers had
| "absolutely opposed" the legislation. The bill ultimately fell
| through.
| ethagknight wrote:
| Like Ford did in Mexico with the Transit Connect import tariff
| circumvention, makes me wonder if Tesla built a "factory" on
| tribal lands to circumvent the 200,000 EV federal tax credit
| limit as a separate manufacturer that licensed the technology and
| bought the parts from Tesla, Inc, and did some "final assembly"
| nonsense like put the rear seats in.
|
| https://en.wikipedia.org/wiki/Ford_Transit_Connect#Tariff_ci...
| adolph wrote:
| Do you mean to refer to the Turkish Transits imported as
| passenger vehicles and converted to cargo use? The move to
| Mexico would bring them in alignment with tariffs to directly
| import cargo vehicles.
|
| _The next-generation Transit Connect, due for the 2022 model
| year, will be fully assembled for North America in Mexico at
| Hermosillo Stamping and Assembly. Like all future Ford products
| built in Mexico, it will comply with the 75% US /Canada/Mexico
| content rule of the new USMCA trade deal set to take effect in
| 2020._
| Ichthypresbyter wrote:
| The chicken tax (the tariff in question) is also why the Subaru
| BRAT had those ridiculous seats in the bed.
|
| https://en.wikipedia.org/wiki/Subaru_BRAT#Jumpseats
| mrfusion wrote:
| Anyone know why this isn't a loophole for all kinds of laws?
| They're basically their own countries right?
| babypuncher wrote:
| It is a loophole for lots of laws. Casinos are huge on
| reservations in states where gambling isn't illegal. There have
| also been many notable cases of shady payday loan companies
| moving onto reservations to escape regulations on interest
| rates and other fair practices around lending.
| gamblor956 wrote:
| Cars purchased on a reservation generally don't qualify for
| state EV incentives. Reservations are sovereign to a degree but
| are not their own countries; they are still subject to federal
| laws so they are essentially equal to states (see
| https://www.bia.gov/frequently-asked-questions). If
| reservations were were their own countries buyers would have to
| pay import duties if they took items purchased on reservation
| land off reservation lands.
|
| As for the eligibility guidelines, see CA's guidelines:
| https://cleanvehiclerebate.org/eng/eligibility-guidelines
| PaulDavisThe1st wrote:
| > Cars purchased on a reservation generally don't qualify for
| state EV incentives.
|
| Citation? Are you also claiming that if i live in NM but buy
| my Tesla from CA, there's also no state EV incentive?
| gamblor956 wrote:
| Yes, because state EV incentives are limited to state
| residents.
|
| See, for example, from CA's EV incentives page:
| https://cleanvehiclerebate.org/eng/requirements/919, or the
| more readable version:
| https://cleanvehiclerebate.org/eng/eligibility-guidelines
| jvanderbot wrote:
| So, selling to non-state residents won't provide an
| incentive to the buyer, but buying from non-state
| residents would?
|
| I can buy my car from a foreign person and still receive
| incentives because I live in a state that offers them?
| This has little to do with selling cars on tribal lands
| if so.
| vmception wrote:
| There are 500+ Of these distinct microstates in the US which
| aren't even on any map.
|
| They all have their own separate case law, legal structure,
| processes.
|
| There is no chronicling or comparison of any of this.
|
| Current Indigenous people recognition suffers from
| overinclusivity, grouping many distinct cultures as one - which
| has been necessary for representation but is counterproductive
| in many ways. (For example, do _all_ headdress wearing tribes
| care about who wears a headdress, how do you know _one_ didnt
| create a licensing system specifically sanctioning random
| people wearing it for whatever reason, if they did sanction it
| are they the proper authority to sanction it, should a century
| long squabble between _two_ tribes over this issue matter to
| us? These are the kind of nuanced questions that aren't being
| asked)
|
| The infrastructure is very low in practically all.
|
| It doesn't have to be.
|
| Each one has to be approached distinctively.
|
| There is much that has never been challenged.
|
| There is no specific reason. Although there is a shared general
| distrust of those who look like the people in the majority.
| theandrewbailey wrote:
| > There are 500+ Of these distinct microstates in the US
| which aren't even on any map.
|
| There are approximately 326 Indian land areas in the U.S.
| administered as federal Indian reservations [0]
|
| https://biamaps.doi.gov/indianlands/
|
| https://www.bia.gov/sites/bia.gov/files/assets/public/webtea.
| ..
|
| [0] https://www.bia.gov/frequently-asked-questions
| vmception wrote:
| Thanks yes that would more accurately convey the semi-
| sovereignty available
|
| There are more tribes still seeking this
| IncRnd wrote:
| They are sovereign nations, but often use a state compact. This
| "loophole" exists because of what was done to Native Americans.
| dougmwne wrote:
| It's highly complex. Tribal governments function sort of like
| limited U.S. states. Generally, federal law applies, but not
| the hosting U.S. state.
| fnord77 wrote:
| tax free tobacco, fireworks and gambling are what I have seen
| dragonwriter wrote:
| > They're basically their own countries right?
|
| No. While they have their own laws subject to US federal law,
| that law has limited authority over non-Indians, especially on
| non-Indian owned property, on Indian reservations.
| protomyth wrote:
| No, sometimes, and yes. Its really a complicated relationship.
| To give a specific example, look at all the things in a police
| stop according to the latest SCOTUS ruling
| https://www.scotusblog.com/2021/06/affirmation-of-inherent-t...
|
| The reservations answer to the Feds and have compacts with the
| states. Tribal sovereignty is complicated.
| HideousKojima wrote:
| It already is for gambling laws, obviously.
| protomyth wrote:
| Well, not exactly. They are absolutely ruled by the Feds, and
| each tribe has a compact with the state that determines what
| kind of gambling can be done. As an example see
| https://500nations.com/Montana_Casinos.asp
| klyrs wrote:
| Year-round fireworks stands are another common one
| jandrese wrote:
| It is, but in order to exploit the situation you have to get
| the tribal council on your side. So you can't set up a brothel
| on tribal lands because the tribe won't allow it.
| stevehawk wrote:
| ... because it isn't profitable enough?
| cco wrote:
| I can only speak to weed, but the tribal reservation that I
| was on would not allow weed production for a couple
| reasons, one is that they receive quite a lot of federal
| funds and assistance, importantly they let the DEA run drug
| enforcement/stings, and the tribe doesn't want to rock the
| boat unless there is a very clear and well supported
| upside.
|
| Not everyone in the tribe would be supportive, i.e. it
| would be a political risk. You would probably generate some
| tax revenue, but especially in the early days (in Oregon),
| it wasn't clear how much you'd make, whether banks would
| support you, whether the DEA would get angry about
| "interstate" commerce, regardless of their actual
| jurisdiction etc.
|
| So their answer was, at the time no, you cannot grow weed
| commercially even though there wasn't really anything
| stopping them at that point. However they, and many other
| tribes, operate casinos(against the law in their state) and
| sell fireworks, potentially against state law or city
| ordinance; the latter because the ATF doesn't care, and the
| former because it represents over 80% of the tax revenue of
| the tribe and there is a history already built there
| between regulators and the tribe.
| pugets wrote:
| I think I understand the motivation for having a law prohibiting
| auto makers from selling straight to consumers. I'm sure it has
| more to do with money than ethics.
|
| My question: Why autos, but not other consumer goods? Should I be
| restricted from buying an iPhone from an Apple store, rather than
| Greg's Phone Emporium?
| Zigurd wrote:
| Regulations on various types of alcohol distribution are pretty
| interesting, too. https://en.wikipedia.org/wiki/Three-
| tier_system_(alcohol_dis...
| xGrill wrote:
| The biggest reason has to with cost. The average consumer does
| not need to take out a loan to buy a phone, but most do for
| cars. Cars are seen as a large investment that needs added
| protection, and instead of doing it at the auto manufacturer
| level, they added dealerships to serve as middlemen to bargain
| with auto makers on your behalf.
| KingMachiavelli wrote:
| Back in the day, a vehicle was a pretty big purchase so you
| wanted to know that you could get service & maintenance
| throughout the life of the vehicle. If the dealership is
| nothing more than a front for the manufacturer then they might
| move the store if business is slow, etc. Forcing the use of
| franchised stores meant that the dealerships are owned
| (always?) by local people so they can't just move away.
|
| Now days other laws pretty much make this a non-issue although
| you could argue that the repair/service process for Tesla's is
| exactly what these laws were intended to prevent; who would
| want to own a Tesla dealership if you can't get the parts to
| fix your customers's cars? e.g. Your son's basketball coach is
| going to keep calling until you get his car fixed.
|
| In your example, you would be restricted to buying from Greg's
| Phone Emporium because Greg is thought to care more about
| repairing your phone than Apple.
|
| Edit: The biggest issue with the current dealership system is
| that it, of course, just evolved into rent seeking and over-
| complicated purchase process. The auto companies have systems
| to make sure dealers sell cars no matter what and the
| dealerships have ways of extracting extra profit from their
| customers.
| fred_is_fred wrote:
| It's very clear - because Greg's Phone Emporium does not hold
| local political power like car dealers do. They excel at it.
| injb wrote:
| How weird it is that " _Company Finds Legal Loophole That Allows
| Them to Sell Things To People_ " is news!
| ethagknight wrote:
| Its an interesting and creative strategy to a law from a bygone
| era currently abused to keep Tesla out of the market. Not only
| that, its investing in an economy that doesn't typically
| receive investment outside of gambling.
| llampx wrote:
| It's Tesla so it's a Good Thing.
| spiderice wrote:
| It's a good thing because it's a stupid law. People would
| praise any company that took advantage of this loophole.
| Though yes, other companies wouldn't get the headlines that
| Tesla gets for doing it.
| PaulDavisThe1st wrote:
| How stupid is it to try to stop e.g. Ford from undercutting
| existing Ford dealerships, and repatriating income and
| profit from e.g. NM back to e.g. MI ?
| babypuncher wrote:
| Are you suggesting that direct to consumer sales should
| be banned across the board? Everything anyone buys should
| have to go through a middleman?
| PaulDavisThe1st wrote:
| Not at all. I'm just saying that if a manufacturer relied
| in the past on non-company owned businesses to establish
| markets, it's not clearly wrong to prevent the
| manufacturer from undercutting those businesses by
| opening company owned stores in the same locations.
|
| I think that Tesla should be allowed to open a store
| wherever they want (subject to other rules &
| regulations), since they have never used dealers.
| jsight wrote:
| Why should the laws protect their outdated business model
| in that scenario? What is this principle called?
| Too...old to fail?
| MomoXenosaga wrote:
| Horse buggy salesmen were not protected from cars...
| kelnos wrote:
| It's interesting to me that these are laws and not
| contract provisions between the dealers and the
| manufacturers.
|
| Then again, way back when, dealers may have been the
| weaker party in contract negotiations, so the law was
| intended to protect them. That almost certainly isn't the
| case today, though, given the proliferation and (local)
| political power car dealerships tend to have.
| breakingcups wrote:
| Do you believe we should still have attendants everywhere
| to pump gas? That Netflix should still be distributing
| DVD's? That elevators should still be hand-operated?
|
| It doesn't seem right to force an inefficient, outdated
| situation to continue to exist purely because it benefits
| a group that would otherwise be outcompeted.
| xboxnolifes wrote:
| Stupid? I don't know. But it's legislation that forces
| the existence of a third-party middle man for sales and
| completely prevents the option of having it optimized
| away.
| PaulDavisThe1st wrote:
| I believe that its intent was not to force the existence
| of 3rd party middlemen, but rather to acknowledge their
| existence (and the role they had played for manufacturers
| by assuming a large part of the risk), and prevent them
| from being swept away by direct sales after doing that.
|
| I don't believe that this should apply to Tesla, because
| they do not use dealers anywhere.
| injb wrote:
| I agree. That was my point - I meant that it shouldn't be
| news because we should be able to take it for granted that
| you can buy and sell stuff without being forced to use a
| middleman.
| bpodgursky wrote:
| Actually the galling part to me is the people who consider
| "Tribal Sovereignty" a clever loophole.
|
| That's the point... the tribes have the right to decide what
| happens on their land. It's like calling "free speech" a
| loophole when someone notices the first amendement.
| jcun4128 wrote:
| Random comment: I get how manufacturing works (batch) but
| whenever I see rows and rows of brand new cars just sit on seller
| lots like that's crazy.
| psyc wrote:
| They say sometimes the cahs what come outta theya, well sometimes
| them cahs drive 'emselves.
| 99_00 wrote:
| Getting the law changed would be hard. Sounds like a win for
| Tesla and the Native band.
| PaulDavisThe1st wrote:
| This is a great example of the problems with the precise wording
| of laws.
|
| The intent of the NM law that prevented Tesla from doing this
| e.g. in downtown Santa Fe was to prevent manufacturers from
| undercutting dealers who had done the work of proving a market by
| opening their own stores in direct competition. There are
| arguments for and against this, but it's not clearly a completely
| stupid idea on its face.
|
| But of course, the law wasn't written to deal with a scenario
| where there's a new(ish) manufacturer that has no dealers
| anywhere, least of all in NM, and has no plans to ever have
| dealers. It only sells its cars in company-owned stores, and
| opening a new store is not undercutting any existing dealers.
|
| Would the legislators who voted for the legislation have
| understood the difference if the idea had been presented to them
| back when this was passed? Would they have worded it differently?
| [deleted]
| WillPostForFood wrote:
| _it 's not clearly a completely stupid idea on its face_
|
| It wasn't a stupid idea to provide some protection to
| dealerships from the manufacturers they represent, but it is
| stupid to use it to block manufacturers that have no dealers.
| andjd wrote:
| But now that these laws are on the books, the existing owners
| of dealerships actively lobby the state legislators to keep
| this as the status quo and reduce competition. The dealers, and
| lawmakers, hope that Tesla will give in and start selling
| through existing dealerships.
| Mountain_Skies wrote:
| Reminds me of how the alcohol distribution system in some
| states causes ridiculous situations such as requiring Trader
| Joe's to sell their inhouse wine to a distributor and then
| requiring them to buy it back in order to sell it in their
| stores. Obviously the distributor loves this as they get to
| rent seek while adding no value at all. That gives them
| plenty of money to lobby with to keep them in the loop.
| HelixEndeavor wrote:
| In general the idea of laws essentially banning competition in
| the dealership market is a crap idea, manufacturer or
| otherwise.
| jsight wrote:
| Exactly... I hear people say that it was a good idea at some
| point in time, and I still don't understand it. Why did they
| need the law to protect them from competition back then?
|
| Undoubtedly being protected from competitors is good for
| someone, but it is rarely the consumer that benefits. Its
| hard to see how car dealers could be the exception.
| JumpCrisscross wrote:
| > _Why did they need the law to protect them from
| competition back then?_
|
| It kept more profits in the states with dealerships versus
| car manufacturers.
| spywaregorilla wrote:
| How?
| telotortium wrote:
| Car dealership owners are among the richest people in
| many rural and blue-collar towns in the USA. While you
| can conceivably tax the profits of company-owned stores
| on the state level, dealership owners may spend their
| profits in their local area (building their houses,
| purchasing local entertainments, visiting local stores,
| etc.), rather than having the profits go to Detroit and
| being spent there.
| adolph wrote:
| That reasoning doesn't make sense to me. Am I missing
| something?
|
| Let's say non-manufacturer revenue over a car's TCO is X.
| The largest portion of X will be spent on non-local goods
| and local labor regardless of who takes the profit, which
| has to be low enough to prevent stronger 3rd party
| service. It isn't like all cars would be shipped back to
| the factory for service.
| HWR_14 wrote:
| The car manufacturer can undercut a dealership, because
| they have fewer costs. At the time these laws were written,
| having a dealership was vital to get timely repairs. In
| Tesla's case, timely repairs might still be an issue - you
| cannot get a general mechanic to work on them. Therefore,
| it was designed to ensure sales were locked into a repair
| system.
| chrisseaton wrote:
| > it's not clearly a completely stupid idea on its face
|
| A law to protect a useless middleman? Seems completely stupid
| to me.
| allmiwe wrote:
| Only because you apparently failed to read any of the
| paragraph that ended in the quoted sentence fragment, but
| decided that it would be worth everyone's time to add your
| Smug Noise to the conversation.
| chrisseaton wrote:
| Which bit do you think's relevant? To protect the middlemen
| because they've 'done the work of proving a market'? I
| don't think 'proving a market' is work that should be
| protected by the state. Undercutting is efficiency and pro-
| consumer. Dealers provide no value anywhere - why do we
| want them?
| varelse wrote:
| Somehow I think their understanding would jump exponentially
| for ICE autos, but not for Tesla or any other EV builder. That
| seems to be the bespoke irrationality for this market segment.
| rmason wrote:
| Here's hoping Musk tries the same thing in Michigan to get around
| the hold that the auto dealers have on the state legislature. I
| know there are tribes in Battle Creek and Mt. Pleasant who would
| probably welcome a Tesla dealership, especially if it drew
| traffic to their casinos.
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