The Car Industry is Afraid of Tesla. It Should Be.

[GoLeft TV]

From Ring of Fire:

Tesla Motors has been making headlines for the past several days because of the legislative actions that are being taken against it in states like New Jersey. The incumbent automotive industry is shaking and scrambling to fight Tesla in every way that it can, save for straightforward innovation. Why? Because Tesla is going after the automotive industry on all fronts: production, distribution, and maintenance.

Last week, the New Jersey legislature enacted measures to prevent Tesla from opening its retail centers in the state. Administrators are taking the position that the law in New Jersey requires Tesla to use the dealership model for distribution. Tesla does not use dealerships. Tesla uses a system that allows the buyer to order directly from the factory. The model is old, outdated and results in higher prices for buyers.

Elon Musk, founder and CEO of Tesla, penned a blog post that expressed his reservations about New Jersey’s actions but also addressed inherent conflicts of interest that the current structure creates for introducing new and successful car companies. His first point is that franchise dealerships have a structural disincentive from selling electric cars because customers are more likely to stick with technology they know. But then Musk goes on to target another conflict of interest that deserves more attention; service.

You can read the full article here at Ring of Fire.

[rurallib]

1. but. but. but . free markets. liberties. freedoms

[awoke_in_2003]

6. Yep....

Free markets, until some upstart threatens the status quo.

[lostincalifornia]

2. Car industry is a misnomer. Dealships is more appropriate. However, there is an advantage to

dealerships if nothing else to provide a convenient outlet for service and recalls.

9 out of 10 Tesla owners in North America live within 100 miles of a Tesla service center. That could be quite an inconvenience depending where you live.

Another disadvantage is there is no negotiations on a Tesla.

I do NOT believe in laws that require dealerships in a state, however, I do not think dealerships are going out of business soon because of this. In reality, the Tesla today is a rich person's car. Only a certain income levels can afford it.

[cprise]

8. And you have nowhere elso to go for warranty repairs

Since all the mechanics work for exactly the same entity, and you can't even rotate the tires without Tesla, Inc. With other cars (a Nissan Leaf, say) you can switch to a different dealership under different ownership if the service is bad.

Tesla ought to make a deal with states with a sunset clause on their anti-dealer exclusivity. That way, Tesla gets to have a controlled environment while they continue refining their technology, but the consumer isn't shut out of serving choices in the long term.

[Blue_Tires]

9. The NADA is a *very* powerful lobby...

They just don't flex their muscle in public as others do...

[lostincalifornia]

13. I agree, too powerful

[MindMover]

15. Service is every 12 months whether you need it or not ...

mostly done by software upgrades ... thru remote ...

no need for dealers ...

[jmowreader]

19. Software replaces brake pads?

[MindMover]

20. I don't have my brakes done at a dealer ... nt

[jmowreader]

21. If you couldn't get the parts, you would

Tesla parts come from Tesla and are installed by Tesla.

[liberal N proud]

3. What is being done to Tesla is an example of the way big business controls the "free market"

If big business sees your business model as a threat to the status quo, they will block your every move. Tesla would destroy the way manufactures insulate themselves from the consumer. When you buy a Ford, you are not a Ford customer, but a customer to the dealer. The dealers are the customers to Ford. They limit their customer base and thus customer relations.

This model is the same if you are buying anything from toothpaste to televisions.

[Kber]

4. Wait - so if I'm in NJ, how do I buy a Tesla?

Seriously, am i not allowed to purchase one?

Can I purchase a Tesla and have it delivered to PA or another neighboring state?

Or am I banned from purchasing an otherwise legal product because of my home address?

[awoke_in_2003]

7. Aren't free markets great? nt

[upaloopa]

5. Suppose you don't want a Telsa?

Not everyone wants one. I doubt other dealers are worried. This is just hype.

[Doctor_J]

10. I wonder what all of those "freedom-loving" teabaggers think about FB passing a law

revoking their right to own a Tesla.

Wait, I know what they think - whatever Fox "News" and Pigboy tell them to think

[MicaelS]

11. Tesla is a real danger to jobs.

If Tesla was making a $25,000 car with a range of 500-1000 miles that would be different. Tesla's cars are a rich person's toy. They START at $63,000 for a base Model S. A fully maxed out Model S is $120,000. That is for a car that has a range of about 250 miles. That requires you to have a home where you can plug the thing up.

What does someone like me, who lives in an apartment, has no place at all to plug up an electric car, that can't afford a $60,000 car supposed to do? How is Tesla meeting my needs? They answer is they are not.

And make no mistake, car dealers employ a LOT of people. They pay lots of taxes. Where do all these people fit in Musk's worldview? Is Musk going to replace the taxes and wage lost by killing all the car dealerships? No he won't. He'll fall back on the old Libertarian bullshit of letting the market rule. The people at car dealerships are completely disposable.

I wish Progressive / Liberal people would get over this love affair with Tesla, and hatred of car dealerships, and realize that Tesla is a real danger to people, jobs and communities. Musk doesn't give a fuck about anyone except those that can afford his toys.

[Doctor_J]

12. If the Tesla is inaccessible to so many people, how will it cause all of those dealerships to

close?

If you can't afford a $60,000 car you can buy a malibu.

I don't get the problem. This is sort of like making people buy health insurance so that the people who work at the insurance companies stay employed.

[MindMover]

14. They are ramping up to make a 30-35,000 all electric vehicle ...

which will essentially blow out GM, Ford, etc .....

[Doctor_J]

16. not at a base price of $60,000 it won't

[MindMover]

17. You could be one of those DUers that only reads what he wants to read ...

and then formulates opinion based on those readings ....

Here is a link that will undercut your 60 grand by half ... to 30 grand, which makes it affordable to me ... and thanks for your input ..

"The previously announced entry-level sedan, to be a 2015 model, is targeted for a price before incentives of about $30,000."

http://www.greencarreports.com/news/1079186_tesla-will-sell-5-models-in-2016-small-suv-and-sports-car-added

[Mother Muckraker]

18. This is about Elon Musk's greed. He wants to eliminate jobs.

Auto dealers fire back at Tesla CEO:
'This Musk guy, he wants all the profits for himself'
http://www.theverge.com/2014/3/19/5525544/new-jersey-auto-dealers-respond-to-teslas-elon-musk