Forgot your password?
typodupeerror
The Courts Transportation Businesses News Your Rights Online

Tesla Motors Sued By Car Dealers 510

Posted by Soulskill
from the not-playing-by-industry-rules dept.
An anonymous reader writes "Car dealers in New York and Massachusetts have filed a lawsuit that seeks to block Tesla from selling its pricey electric vehicles in those states. The dealers say they are defending state franchise laws, which require manufacturers to sell cars through dealers they do not own. Robert O'Koniewski of the Massachusetts State Automobile Dealers Association says, 'Those dealers are investing millions of dollars in their franchises to make sure they comply with their franchise agreements with the manufacturers. Tesla is choosing to ignore the law and then is choosing to play outside that system.'"
This discussion has been archived. No new comments can be posted.

Tesla Motors Sued By Car Dealers

Comments Filter:
  • Translation: (Score:5, Insightful)

    by Local ID10T (790134) <ID10T.L.USER@gmail.com> on Saturday November 10, 2012 @12:39PM (#41942933) Homepage

    "Stop them! They are competing unfairly, by selling a product that will one day make ours obsolete!

    We have engineered a law to protect ourselves from competition, and since we choose not to sell their product, we can use this law to keep them from selling their product either!"

  • Re:Translation: (Score:5, Insightful)

    by Ostracus (1354233) on Saturday November 10, 2012 @12:43PM (#41942963) Journal

    Is it? I thought it was," we have to obey these government imposed laws, you should too".

  • Re:Translation: (Score:4, Insightful)

    by MickyTheIdiot (1032226) on Saturday November 10, 2012 @12:45PM (#41942991) Homepage Journal

    wow. Now THAT'S naive.

  • by loganljb (1424009) on Saturday November 10, 2012 @12:46PM (#41942997)
    I'm not a big supporter of complete Laissez-faire capitalism, so don't take this the wrong way... But this story is about exactly the opposite of what you seem to think it is. The problem in this case is the franchise law -- which is government interference in the free market, which is anathema to true capitalism -- not with capitalism. Of course dealerships are going to sue -- they've got a nice racket going on, with government backing.
  • by Nerdfest (867930) on Saturday November 10, 2012 @12:46PM (#41943001)

    Out of curiosity, what was the original intention of the law? It seems a bit pointless.

  • by MickyTheIdiot (1032226) on Saturday November 10, 2012 @12:47PM (#41943007) Homepage Journal

    Again.. these people are *not* free marketers. They are opportunists. They are fine with the free market as long as it benifts them. When they are on the losing end they're absolutely fine with the government intervening in every possible way.

  • by MickyTheIdiot (1032226) on Saturday November 10, 2012 @12:49PM (#41943021) Homepage Journal

    "To Help My Corporate Buddies."

    When there is only one explaination is possible it has to be true.

  • Re:Translation: (Score:5, Insightful)

    by fafaforza (248976) on Saturday November 10, 2012 @12:52PM (#41943051)

    You really think this is a petrol engine versus electric thing?

    You don't think this is a "I want to make money as a middleman, and don't want this 'direct to customer' sales model to take off" thing, instead?

  • Re:Translation: (Score:5, Insightful)

    by ShanghaiBill (739463) on Saturday November 10, 2012 @12:54PM (#41943061)

    Is it? I thought it was," we have to obey these government imposed laws, you should too".

    Except these laws were not "imposed" on the car dealers. The car dealers lobbied and bribed to get these laws passed. They are anti-consumer and anti-free-market. They are a result of sleazy special-interest politics.

  • by fafaforza (248976) on Saturday November 10, 2012 @12:56PM (#41943079)

    Do you know if they have a similar system in Europe? I believe you can order direct from Audi and actually go over to their factory to pick the car up.

    And yea, the dealer only option sucks, as when, for example, you're looking to buy a V8 VW Tuareg, mainly for its compact size and towing capacity, you have to buy one with *all* the options, because that's the only thing that was imported. Very anti-consumer.

  • by timothy (36799) Works for Slashdot on Saturday November 10, 2012 @12:58PM (#41943097) Homepage Journal

    Whatever you do, please don't attribute this to actual "capitalism" or "the free market." When people talk about deregulation as a horror, realize this is the kind of horror that the deregulators seek to undo -- complacent vendors with a cozy layer of protection against new entrants.

    Also, consider how much like these state franchise laws resemble gerrymandering district agreements -- both rely on passing in secret -- or at least in relative obscurity, in a process that regular folks rationally stay away from -- agreements to use the force of law to keep things tidy, stable, and predictable (and profitable, for those who've done the manipulating), rather than dynamic, risky, interesting, innovative, and other nice adjectives.

    The laws that give special privileges to state-sanctioned franchise owners are bad, even if they have some small silver linings, whether the franchise is for transportation, banking, legal services, auto sales, gambling, or Dixie cups. Not that their history in the auto industry isn't interesting -- this podcast is enlightening on that topic: http://www.econtalk.org/archives/2009/06/munger_on_franc.html [econtalk.org]

  • by purpledinoz (573045) on Saturday November 10, 2012 @01:09PM (#41943195)
    America is so focused on blaming republicans/democrats, that they don't realize that they both follow the same principal: Laws are for sale. Stop this blame game and wake up. Your government has been taken over by big business, and it is the American people who are getting screwed to ensure that the wealth trickles to the top 0.1%. It's so ironic that America's ideal is to spread democracy, while its own democracy is a corrupted mess.
  • by Anonymous Coward on Saturday November 10, 2012 @01:14PM (#41943227)

    I'd say cue the right-wing retards that present a bunch of lies in order to support their failing party, but you already did that.

    How about some facts (look 'em up!):
    Bush started with a surplus and left with a trillion dollar deficit.
    The deficit has been decreasing since Obama took office.
    Unemployment has been decreasing since Obama took office.

    Instead of just parroting Fox News lies, why don't you present some facts to back up your fucking insane opinions.

  • by Anonymous Coward on Saturday November 10, 2012 @01:15PM (#41943243)

    Cue all the idiots with their "yeah but republicans do bad stuff too, so there!"

    No, cue all the people who want a sane discussion with their "Shut the everloving fuck up about the goddamned election you LOST already, this discussion is about a statewide car dealership law in New York, now stop trying to change the subject, you prosecution-complex-suffering asshole".

    So, shut the everloving fuck up.

  • by Captain Splendid (673276) <capsplendid.gmail@com> on Saturday November 10, 2012 @01:16PM (#41943249) Homepage Journal
    This is why us dirty liberals refer to Clinton as the best Republican president of the modern age.
  • by Bodero (136806) on Saturday November 10, 2012 @01:22PM (#41943291)

    Under the law, these dealers are absolutely right. Chrysler was forced to sell a company owned Chrysler Dodge Jeep Ram store in LA for this exact reason.

    If Tesla doesn't like it, then lobby to change the laws. You can't just ignore them.

  • Re:Translation: (Score:5, Insightful)

    by Anonymous Coward on Saturday November 10, 2012 @01:24PM (#41943311)

    Except these laws were not "imposed" on the car dealers. The car dealers lobbied and bribed to get these laws passed. They are anti-consumer and anti-free-market. They are a result of sleazy special-interest politics.

    Think it through. You get discounts off MSRP because the franchisee dealers compete with each other. If the manufacturer is also the only dealer, you will see the same price at every dealer; full MSRP. This law is pro-consumer, not anti.

  • by jythie (914043) on Saturday November 10, 2012 @01:26PM (#41943321)
    I really, really hope they loose due to that element. I utterly loath these car dealers, and their 'but we invested money! we should have the law protect us!' argument just doesn't do it for me....

    There are times and places where regulation is useful, but this type of protectionism that forces companies and consumers to go through some cartel of private businesses simply because they got a special law just.. it doesn't do the population any good.
  • by nedlohs (1335013) on Saturday November 10, 2012 @01:36PM (#41943391)

    Picking a heavily restricted special case product that was so special the constitution got changed twice due to entirely to it and applying it to "almost every product" does not a reasonable argument make.

    I can buy pumpkins from a local farmer who grew them. I can buy a computer made by Dell from Dell. I can buy ink for my printer directly from the manufacturer. I can pay a local carpenter to build me a table directly. I can buy a house from the builder.

  • Re:Translation: (Score:5, Insightful)

    by Anonymous Coward on Saturday November 10, 2012 @01:38PM (#41943417)

    Except that consumers actually prefer no-haggle pricing. Many people, including me, find the dealership experience unpleasant. With manufacturers competing with each other vs dealers, it's more likely that each manufacturer will try to give you the best price, or at least appear to do so. With dealers, you just expect to have your wallet pillaged.

  • Re:Translation: (Score:5, Insightful)

    by bmo (77928) on Saturday November 10, 2012 @01:41PM (#41943451)

    Bullshit.

    The manufacturer could sell the car direct to the customer. They could sell it for the same price as the dealer pays them.

    The dealer is just a middle-man skimming off the top. The dealer offers service too, but independent certified garages could too. This is anti-consumer and anti-independent repair.

    --
    BMO

  • by MightyMartian (840721) on Saturday November 10, 2012 @01:42PM (#41943463) Journal

    Raising taxes can most certainly raise revenues. Don't confuse your political ideology with actual economics.

  • Re:Translation: (Score:5, Insightful)

    by Shavano (2541114) on Saturday November 10, 2012 @01:50PM (#41943541)

    Nope. Those laws were made for the protection of the franchise contracts, so the manufacturers couldn't make a franchise agreement with a dealer and then establish another franchise within the franchisee's territory or go into direct competition with their franchisees. In the case of a company store opening in an area where there are no dealers for the brand. It's essentially protecting the value of the franchise contract from being undercut by the manufacturer. But if there is no franchise contract covering the territory... who is hurt? Dealers for OTHER BRANDS? Who the hell cares? Those dealers have no contract with Tesla and no interest to protect.

    It sounds like New York and Massachusetts are trying to apply the law outside its scope.

  • by Lakitu (136170) on Saturday November 10, 2012 @02:18PM (#41943781)

    are you serious? It's the complete opposite.

    If manufacturers could sell through dealerships they owned, they would own every dealership. The franchise law is supposed to enable locals to own local, small business dealerships and still have an "in" with the major manufacturers. Without it, the major manufacturers would all just be the 800-lb gorillas they are, leveraging their giant corporate size for the benefits of more control.

    It'd be nice if you could spend a moment to actually consider why it might be before complaining, since your argument about political quid pro quo with corporations is actually working against itself here.

  • by Pulzar (81031) on Saturday November 10, 2012 @02:23PM (#41943835)

    I haven't found a VW or Audi dealer who won't place a factory order with fewer options than anything on their lot

    I've had a completely different experience with VW. The dealer said that he could order the car with options I wanted, but would not consider anything less than MSRP. That's for a car that they were selling for anywhere between $3000 and $4000 off of MSRP for the ones on the lot.

    In practice, it was equal to a refusal to order it. I ended up getting a Nissan...

  • I suspect this is Tesla Motors trying to keep the entire supply chain under control (and thereby not allowing third parties to add a little margin on top of the sales price).

    No shit. The question is, what's wrong with that? If you buy a car from them, you're free to resell it, as you own it.

    The real problem with EVs from the perspective of the dealers of gasoline vehicles is that they are sold under an entirely different model. A gasoline vehicle is intended to produce a certain amount of service revenue. An EV is intended to minimize service. We had a bailout because people weren't buying American cars because they were shit. By all accounts they are somewhat better now, which has severely impinged on service revenues. Dealers get the service money and massively pad parts prices in most cases, and the automaker also pads the part prices, which is their prerogative (though sleazy) since they signed the contract for Delphi or Hitachi or JECS or Bosch or whoever to make sixty hojillion fuel injectors or whatever. If you make an EV designed to produce service revenue you can only do it in ways that will make the car unsafe (suspension defects) or ways that will make it look like shit and be immediately detectable even on a good test drive (interior flaws.) So basically, the problem with EVs from the standpoint of the major manufacturers is that they cannot intentionally make some of them pieces of shit in order to differentiate their other products which are made as well as they can make them, and which are still crappy compared to the imported competition. All you have to know about that is that the six-figure Ford GT had typical shitty Ford interior.

  • Re:Translation: (Score:5, Insightful)

    by Jeremi (14640) on Saturday November 10, 2012 @02:38PM (#41943953) Homepage

    If the manufacturer is also the only dealer, you will see the same price at every dealer; full MSRP.

    ... and then the manufacturers would have to compete against each other on price, and the MSRPs would drop. I don't see a problem there. It's not like there is currently a lot of benefit to the consumer in having every car labelled with an irrelevant MSRP price that only suckers actually pay. Wouldn't it be nicer if the MSRP was actually a reasonable price, and you could just go in and buy a car at that price without haggling for hours? That's how most consumer purchases work, and it makes buying a lot less stressful.

  • by Anonymous Coward on Saturday November 10, 2012 @02:45PM (#41944009)

    Both sides can pose a clearly untrue straw-man to demonstrate the righteousness of their position. Increasing taxes to 100% will certainly destroy the economy and reduce productivity and overall tax revenue. Likewise, reducing taxes to zero obviously will result in zero government income.

    So the real argument is where between those extremes is government income optimized while maintaining maximum productivity. There are plenty of economist lined up to discuss the subject.

    The second argument is more philosophical. How much "should" the government tax. Should it be the minimum required to do the minimal functions that only the government is able to do, or should it be an optimal amount in order to do everything the government can do, or should it be an above optimum amount in order to redistribute wealth even if that is less efficient overall?

  • by kqs (1038910) on Saturday November 10, 2012 @02:53PM (#41944081)

    Let me translate that for you:

      "During a recession, things suck. During the worst recession since the Great Depression, things suck more than during a regular recession."

    Bush raised the deficit and grew government during growth years. Obama lowered spending each year he was in office and shrank government during a recession. I know you won't actually look this stuff up; Fox News discourages independent research. But you should.

  • by Anonymous Coward on Saturday November 10, 2012 @02:56PM (#41944121)

    I don't see it that way.

    Look at the petroleum industry. There are corporate locations and there are franchise locations. Both exist side by side, and most consumers can't tell the difference.

    GM, Ford, Chrysler etc. sell through dealerships because they move more product. If they wanted to sell it themselves, I am sure they could muster the political clout to get the laws changed in their favor.

    I haven't researched it, but I am guessing these laws are the result of a few politically connected dealers who slid them in. I am sure the politicos didn't just decide to pass a law.

    I hope Tesla wins the lawsuit.

  • by Khyber (864651) <techkitsune@gmail.com> on Saturday November 10, 2012 @03:06PM (#41944191) Homepage Journal

    No, it only applies to MOTOR VEHICLES which meet certain definitions. One of those definitions is that it must BURN or Combust, by the definitions of fuel in that chapter (60? 61?) and pursuant to definitions further found in chapter 90.

    Electric motors are not even counted, even under the "Alternative Fuel Vehicles" section, because, again, electric cars do not meet the definition of a fuel-burning vehicle.

  • by AF_Cheddar_Head (1186601) on Saturday November 10, 2012 @03:20PM (#41944317)

    Do you seriously believe Gore would have invaded Iraq after 9/11?

    A clear cut case where it made a difference who was elected.

  • by matunos (1587263) on Saturday November 10, 2012 @03:20PM (#41944327)

    Except there's still more than one car manufacturer.

  • Re:Translation: (Score:4, Insightful)

    by hjf (703092) on Saturday November 10, 2012 @03:40PM (#41944487) Homepage

    Oversimplify much?
    You think you just sit around and wait for people, to just BUY a car? Just take your share and go on your merry way?
    You have to SELL. Selling is a job. We storeowners are not "middlemen". We wake up every day, go to work, pay taxes, have debts. We WORK.

    And unlike you, we actually have risks. You? You're clearly an employee. you have an assured check at the end of the month. Me? If I don't sell, I have to touch the "rainy day fund". Something you only do when you're fired.

    Following your logic, you have no argument to get mad when the company you work for replaces you for an indian working for a fraction of your salary. Do you?

  • Re:Translation: (Score:2, Insightful)

    by Anonymous Coward on Saturday November 10, 2012 @04:15PM (#41944771)

    Just go into the dealer, ask how much they want and pay it.

    Just because people don't like to haggle, doesn't mean they don't know they're getting ripped off if they pay the dealer's price.

  • by CapOblivious2010 (1731402) on Saturday November 10, 2012 @04:33PM (#41944909)
    Wait, how can adding mandatory middle-men NOT be at the consumer's expense?
  • by iCEBaLM (34905) <(moc.mlabeci) (ta) (mlabeci)> on Saturday November 10, 2012 @04:42PM (#41944941)

    If manufacturers could sell through dealerships they owned, they would own every dealership.

    Would they?

    Apple has their own stores, but they aren't the only place to buy Apple products.

    And who cares if they were? What's wrong with companies selling their own products retail if they want?

  • by Type44Q (1233630) on Saturday November 10, 2012 @05:07PM (#41945115)

    Unemployment has been decreasing since Obama took office.

    Only because people who are no longer eligible to receive assistance aren't counted!

  • by Jane Q. Public (1010737) on Saturday November 10, 2012 @05:12PM (#41945149)

    "Monopolies don't exist in a free market system."

    Even Adam Smith, who pretty much defined the concept of a free-market "system", disagreed with you. Try reading his book.

    Even 230+ years ago, Smith wrote that a free market could lead to monopolies, and so a reasonable body of antitrust laws would be required to keep everybody playing within the rules.

    "Absolutely free" markets, with no antitrust, is not a recent idea but it is a destructive one. Such a market would either fail or become fascism in short order.

  • Re:Translation: (Score:4, Insightful)

    by Attila Dimedici (1036002) on Saturday November 10, 2012 @08:20PM (#41946489)
    Except that currently the way pricing is structured, I don't actually know what the price of two cars from different manufacturers are until I go to a dealer for each one and spend several hours haggling over the price. So manufacturers don't really compete with each other over price. They compete over much more intangible properties, properties that are subjective and thus able to be influenced by effective marketing campaigns. For the most part, the Chevy dealer does not compete with the Ford dealer, by the time most people start to think about what dealer to visit they have already chosen what brand they are going to buy.

The one day you'd sell your soul for something, souls are a glut.

Working...