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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.'"
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Tesla Motors Sued By Car Dealers

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  • by LeAzzholeChef (2576267) on Saturday November 10, 2012 @12:38PM (#41942925) Journal
    They cant sue under the franchise laws. Because the law is under combustible motors. It never included electric driven vehicles. Therefore this case should be thrown out of court on grounds of greed and control.
  • The actual law (Score:1, Interesting)

    by Anonymous Coward on Saturday November 10, 2012 @12:45PM (#41942985)

    Thanks for linking to the actual law in question

    On reading it, it appears that the law says that the manufacturer will not make business decisions based on ownership of dealers. ie it seems to indicate that dealers and factory stores be treated equally. I don't know if it says that factory stores are illegal.

  • by phantomfive (622387) on Saturday November 10, 2012 @01:17PM (#41943261) Journal
    Regulatory capture, crony capitalism, etc is one of the biggest problems in America today.

    It is easily something that both the left and right in America can agree on. It is unfortunate that politicians tend to agree with each other, in opposition to the public.
  • by shellster_dude (1261444) on Saturday November 10, 2012 @01:22PM (#41943293)
    I think you missed the point of the OP. That was precisely what he was saying.

    This is a government backed monopoly (in my opinion, the only true use of the word "monopoly"). It needs to be shut down. The same way utility providers currently get to exercise monopolies, enforced by government. Tesla ought to succeed or fail on their own merit (and I think they will fail, but they deserve the chance).
  • New car dealerships (Score:4, Interesting)

    by EmperorOfCanada (1332175) on Saturday November 10, 2012 @01:48PM (#41943525)
    What tesla should do is to give out non exclusive franchises for $0.01 online. Anyone can get one: corner stores, private people, my cat, just saturate the market. Then when you want to buy a car you would buy it online through some "local" dealership. Technically bob down the street would sell it to you but Tesla would handle the transaction for Bob and then pass bob his $0.02 commission.

    There are few organizations that I detest more than car dealerships.

    A better end run of the law would be to go federal and try to slip in an online sales rule that overrides any local laws. That would be a 21st century way to go. I don't care where Amazon's HQ is and I certainly don't want a stupid local law getting between me and Amazon.
  • by WaywardGeek (1480513) on Saturday November 10, 2012 @05:20PM (#41945197) Journal

    Since down below there's a bunch of PO-ed Romney supporters bashing Obama rather than talking about Tesla being sued, I find replying to Combustible Motors more on-topic!

    Getting back to TFA, Tesla does not have stores selling Telsa's in those states. Instead, you buy them over the Internet. All Tesla has is showrooms where they can explain their story to people, but they can't sell cars. Tesla believes, and I agree, that this avoids running afoul of dealer franchise laws. Frankly, I don't see how these dealers can explain why it is illegal for people in New York to buy a car over the Internet, or why it is illegal for Tesla to have showrooms in malls. Laws to protect car dealers could only have been sold to state legislatures by used car salesmen. I hope these lawsuits crash and burn.

  • by Tanktalus (794810) on Saturday November 10, 2012 @05:33PM (#41945297) Journal

    I'm not so sure. I recall that at the time that Dubya was trying (and more or less failing from what I could tell) to make a public case for the invasion of Iraq, Clinton actually commented that he was in favour of it.

    The reason I remember this so clearly is because it made an impression on me. Here is the current and previous presidents (and one of them being the son of the previous president to this lineup) who, among them, seem to have 12 years or so of knowledge of something (I'm assuming that Dubya had some insight to the matter from his father, and that Clinton, upon taking office, would have had access to the same intelligence as his predecessor, so that's where I come up with 12 years from). What that something is, I don't know, but it was leading both Dubya and Clinton to the same conclusion. Even more odd was that both men, of different parties, were suggesting a conclusion that was not considered popular.

    My conclusion from that was that there was some extra top-secret intelligence or something that, as President, both men would have been privvy to, but the rest of us peons were not which would seem to otherwise intelligent men (and, yes, Dubya was intelligent, whether you agreed with him or not) to justify this unpopular position. Maybe they both saw the physical receipts the US had for the sale of chemical weapons to Saddam. We all know he had them, the US did the selling in the first place, and we all know Chemical Ali used some of them on the Kurds, we just may not know how much he had left (and only after invasion of Syria will we find out).

    So then you bring up Gore. Well, I hate to break it to you, but Gore would have had the same information, and, because he was the Vice President under Clinton, he would have known that information even during the election. (Dubya might have as well, depending on how much his father shared with him, but we don't know if that sharing happened before or after election. Gore absolutely knew prior to the election, as it was part of his job.) If Clinton was in favour of such an unpopular position, I would have to imagine that this information was compelling, and Gore would likely have been forced to the same conclusion as well.

    The only difference might have been the timing. But if the CIA was sending up the same intelligence reports, I remain utterly unconvinced that there would have been significant difference here.

    Of course, we're all playing what-ifs on a global world stage with very insufficient information. It'll take 50-75 years for this stuff to be declassified, if ever, and only our great grandchildren will have the ability to tell what's going on. And, by that time, Dubya will be remembered as a President, and Gore, as a former VP, will likely be largely ignored. Whether rightly or wrongly, VPs just don't make it in the history books, which may mean the entire question of whether Gore would or wouldn't have done the same as Dubya would be uninteresting. It'll merely be a question of whether Dubya was justified or not, with a lot less vitriol than is spewed at him today (the vitriol, of course, being reserved for the candidates of their day, not ours).

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

    by radish (98371) on Saturday November 10, 2012 @05:34PM (#41945313) Homepage

    I'm a consumer. I buy things not because of salespeople but despite them. Buying a car is one of the least pleasant things I ever have to do, and that's entirely because of the salespeople and the dealer model. I would almost certainly buy more new cars (thus boosting the economy and helping to employ more people who actually, you know, make things) if I didn't have to go to a dealer to do it. Just let me browse & compare online, with accurate prices, and pick what I want for delivery. You know, like I do for EVERY OTHER DAMN PRODUCT I BUY. The dealer adds precisely zero value, in fact the dealer removes value, and does so at a high cost to me. Shut em all down.

  • by Anonymous Coward on Sunday November 11, 2012 @10:38AM (#41949267)

    In Mass. it looks like Part I Title XV Chapter 93B might apply here.

    It appears to be about protecting fair dealing between car manufatcurers, dealers, and customers.
    Part of this fairness is manufacturers honoring their franschise agreements with dealers.

    Interesting sections:
      Section 1 defines a dealer as someone seling cars under a franchise agreement.
      Section 4 (c) 10 Manuf can't own dealerships.
      Section 11 Whole chapter relates to franchise agreements
      Section 14 Any dealer, can ask AG to enforce the law.

    If Telsa has no dealers and no franchise agreements, I'm not sure how they can be unfairly dealing with their dealers.
        Maybe someone can claim that they are being unfairly prevented from their entitlement to be a Tesla dealer?
        Maybe a dealer for another car company can claim unfair competition?

    If there are not franchise agreements, maybe section 11 is a get out of jail free card for Tesla?

    Even without standing does section 14 allow any dealer for any car company to ask the AG to go after Tesla?

    Seems like there is a wording bug in the law.
        Section 4(c)10 should be limited to manufacturers that have franchised dealers in the state.
            I suspect Section 11 says as much, but it looks like it needs to be clearer one way to the other.

    If it's the other, then it's just a good ole' boys law for the established dealer system.
          Which is a bit embarasing for the state.

    Looks like the lawyers will have a great time sorting it out.
        (Nothing above should be construed as legal advice, a random reading of one statue is no substitute for a lawyer.)

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