Following his big battery swap reveal in California Thursday night, Tesla CEO Elon Musk is turning his eye to New York. That's where a new tactic by the local auto dealers could put a damper on Tesla's electric-vehicle success story.

"Just heard that NY auto dealers are sneaking through a bill to shut down Tesla in NY" - Elon Musk

Specifically, Green Car Reports says, there are two nearly identical bills being stealthily moved through the New York state legislature (Assembly bill A07844 and State bill S05725) that would prohibit the state from registering any vehicles that had not been sold through an independent third party (i.e., a dealer). The move prompted Musk to Tweet, "Just heard that NY auto dealers are sneaking through a bill to shut down Tesla in NY. Please call your state senator!" He later sent out, "NY Assembly passing bill to shut down Tesla, but Senate holding the line. Appreciate senators resisting influence of auto dealer lobby."

It's the latest round in a fight that started when the state dealers filed a suit against Tesla's dealer-free sales method in late 2012. The New York Supreme Court ruled earlier this year that the dealers could not use the Franchised Dealer Act as a reason to sue competitors. The New York State Automobile Dealers Association has a letter (PDF) claiming the support of out-of-state groups like the Alliance of Automotive Manufacturers and the Global Alliance of Manufacturers. Tesla currently has three stores in New York, in Roosevelt Field, New York City and Westchester and two service centers there, in Queens and White Plains, and one more planned (in Long Island).

That outside support makes sense, since Tesla is embroiled in a struggle with dealers in other states (Massachusetts and Texas come to mind). Nationwide, dealers are putting up quite a fight against Tesla, which makes sense when you realize the automaker is the first to give them this much of a challenge before, at least in recent memory. Since Musk has talked about taking the dealer fight national, we don't think this is the last we'll hear of this story.


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  • 417 Comments
      Zapbrannigan
      • 1 Year Ago
      Disgusting, the spotlight needs to be shone on these dealer groups who are doing everything they can to maintain the status quo of their artificial market.
      Andy Smith
      • 1 Year Ago
      Oh dear, of all the things to possibly put a dent in Tesla, it was the least expected...the dealers
      ammca66564
      • 1 Year Ago
      Crony capitalism at its very finest. "You want to buy a car? Yeah, you're going to have to buy it from us or you won't like the consequences. See, we bought the law and you've got no choice."
      Pinhead
      • 1 Year Ago
      I'm sure dealers just have the best interest of their customers at heart. Right?
      express2day
      • 1 Year Ago
      I'm not a fan of one entity (Tesla in this case) controlling all of the retail or service outlets in a region or state. It creates a regional monopolistic environment and eliminates or reduces competition among retailers which is not good for consumers. A Tesla run sales operation is not necessarily going to be better than what a traditional dealership set-up would be especially when there is no alternative to try a different retail location as they would all be under the same monopolistic umbrella.
        Nick Kordich
        • 1 Year Ago
        @express2day
        @express2day - I do not disagree that vertical integration can lead to abuse, but this level of restriction is unique to automakers. Tesla's proposed a compromise that, if you're not going to allow direct sales in the general case, an exception should be made for companies that control a very small part of the market, so that any concern over vertical integration dominating the industry resolves itself as the company grows out of this phase.
        Pookie64
        • 1 Year Ago
        @express2day
        Perhaps, but I'll take my chances... This is a scum bag move and certainly not designed to help me but to keep the dealers protected franchise. In the end, there should be no difference than other direct to consumer sales (such as Apple, where I can *IF I CHOOSE* purchase via Best Buy or Frys Electronics).
        Grendal
        • 1 Year Ago
        @express2day
        As the consumer, you can always choose not to buy something based on that companies reputation. Especially nowadays when you have access to vast amounts of information. If Tesla ends up not taking care of their customers I'm sure you will hear about it. Right now they are exceptional and all indications are that will continue to happen for many years to come.
          express2day
          • 1 Year Ago
          @Grendal
          Tesla is too small right now to know what the future will be for them as EVs start to become more common down the road. It's way way way too early to assume anything about what Tesla can or will be able to do going forward as the EV market heats up more. As the EV market becomes much more competitive, there's no reason to think Tesla can't or won't become victim to many of the same issues other manufacturers, dealerships, etc. face. Given their current market position, they haven't even really been tested yet.
        Air Freshh23
        • 1 Year Ago
        @express2day
        this guy is seriously a dealer. Auto dealers are THIEVES. Thou shall not STEAL.
        Eta Carinae
        • 1 Year Ago
        @express2day
        on the opposite side of that arguement....dealers operated by the car maker would decrease the price of cars....offer quicker updates since they are start from them..........and heck who cares if it creates a monopoly effect on the other car makers...the food industry has done it (mcdonalds) and i still see burger and wendy's, etc. doing fine......driving down price while offering better sercive should be applauded not shuned because it leaves the middle man out.........industries evolve and tesla is the business that is driving that evolution.....people thinking about dollars signs are the ones that will halt progession only for their own benefit........these article about states fighting this is just sad
          express2day
          • 1 Year Ago
          @Eta Carinae
          Reducing competition does not mean lower prices. The opposite often happens. How are fast food restaurants a good example of Tesla's retail plan? McDonalds, Wendy's, etc. are franchises typically owned by local business people similar to how Chevrolet, Buick, Ford, Chrysler, Toyota, etc. are franchises typically owned by local business people.
          Jesse Gurr
          • 1 Year Ago
          @Eta Carinae
          Some fast food places have both franchises and corporate owned stores. I used to work for Carl's Jr(Hardees on the east coast). I worked at a corporate owned place. Where I went to college, there was a Carl's Jr in the food court, that was a franchise owned operation. There can be multiple stores in a city and you don't know which are corporate or franchise because both are held to the same standards. Theoretically, automakers could own dealers and franchise the rest out. Why not? Well it could be harder in smaller, more rural areas.
          Nick Kordich
          • 1 Year Ago
          @Eta Carinae
          @Lance Burley - as express2day points out, McDonald's is an example of operating through a franchise system, however, no cartel held a gun to the heads of Ray Kroc and the McDonald brothers saying "Sell through us or you don't sell in New York." Had they chosen to expand more slowly, limited by their available capital, they could have remained a family owned restaurant in multiple states. However, they were free to choose whether to use the franchise approach or not. Had they been publicly owned and had half a billion dollars from a short squeeze conversion before they started franchising, maybe they'd have retained central ownership. There's no law that would have prevented them from doing so. White Castle is an example of a fast food chain that has chosen not to franchise in spite of it being the dominant trend in the industry.
      Alan Ko
      • 1 Year Ago
      Every single lawmaker who votes for this bill is corrupt, plain and simple.
      KAG
      • 1 Year Ago
      NY, you laws make no sense at all.
        Pj Taintz
        • 1 Year Ago
        @KAG
        Which is exactly why I am leaving, and many others from NY are also leaving for better states. Texas, North carolina, pretty much anywhere but cali, although at this rate NY is poised to take over the worst state in the nation
          IBx27
          • 1 Year Ago
          @Pj Taintz
          Right here, moving from Westchester, NY to Austin, TX or Savannah, GA after I finish grad school in TX.
          Skicat
          • 1 Year Ago
          @Pj Taintz
          Only hicks call it "cali."
      car-a-holic
      • 1 Year Ago
      Hey musk; why not really $&ck with the lobbyists and dealers directly involved by suing them individually? Say... As reparation in proportion directly to the potential brand damage and possibility of turning customers away at each instance the lobbyists attempt to interfere with your right to do business??? Just an unfinished thought....
      Scooter
      • 1 Year Ago
      This is clearly insane. Its Tesla's mission "not to seek profits from service". It has been a dealerships mission for a long time "to seek profits from service". Often silly, and unnecessary services. I recently went with my friend to get his 2008 Mitsubishi Lancer serviced since it was struggling to accelerate and the engine sounded like it was having a hard time. These men in spiffy color trimmed uniforms came out with clip boards and checklists talking about $150 for this, $300 for that...etc. At the end of it all, they didn't really check anything, but rather told him, we simply "reccommend" this list of services be done according to mileage. I asked him, "So you didn't really check these things" (air filter, cabin filter, tire alignment, other fluids) he said "no, we just go according to schedule." Almost two hours later my friend was charged $400 for a transmission flush, and basically got the run-around, with no solution to his actual problem. During that same time an older woman was also getting charged an appointment and service fee to get anti-freeze poured in her car. These places are down right evil. During the time we waited for his car to be serviced, we went next door to a Ford lot to check out the Focus ST and Explorer. A salesman immediately began harassing us. We made it clear we were only browsing, and he still refused to leave us alone. In fact he began questioning my friends financial situation and kept insisting he could offer him a deal on a new Ford. This salesman persisted for about 15 solid minutes. He only stopped when my friend mentioned he had some credit issues. Another example of slimy dealers. My cigarette lighter socket went dead and wouldn't work. So I called the dealership. Nobody would tell me anything. The serviceman I spoke to refused to give me any clues or ideas on what it could be, and was only offering me to set up a $90 appointment. These guys are slime balls. What they are doing is wrong. I urge people to write their law makers over this. I know I plan to. (Texas)
        express2day
        • 1 Year Ago
        @Scooter
        It's naive to think that Tesla is definitely going to ultimately be any better than other manufacturers once they get out of their "honeymoon" phase of very minimal competition in the EV market. Sure, they can talk about not wanting to "seek profits from service" but they will definitely be seeking profits and if not from service they will simply have to make it up in other ways at the consumers' expense. There's no such thing as a "free lunch" and the bottom line will be just as important to them as it is to other corporations. Tesla owned and run dealerships could end up being just as bad or even worse than today's average dealerships. Tesla hasn't come close to being tested yet (i.e. with REAL competition) to know how good or bad they can be.
      E
      • 1 Year Ago
      A true car fan like myself who doesn't have the cash to buy one of these can spend ALL day at one of their locations without a dealer getting on my balls. TESLA ROCKS!
      Dave D
      • 1 Year Ago
      Disgusting animals, these dealers, their associations and their lobbies. The state senators who sponsored these sneak attacks on their constituents need to be highlighted in every way possible. They need to know that taking lobby money that damages the public will be exposed.
      fvbrendag
      • 1 Year Ago
      It's bad here is California but NY is even worse. Where do they get off?
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