A surprise pair of bills in the New York State Assembly that would have narrowly targeted Tesla Motors and its direct-to-customer sales model has been put in neutral. The State Assembly ended the 2013 legislative session Friday without taking action on the bill and, since the lawmakers will not reconvene until January, it is effectively dormant for now.

Tesla said that had the bill passed, it would have had to close its stores and stop operations in New York, which is why Tesla CEO Elon Musk took a personal interest in the situation when it hit the headlines late last week. Once the bill was stopped, Musk tweeted, "The kill Tesla bill in NY was stopped in the 11th hour due to public outcry. Am super grateful to everyone who helped."

Behind the scenes, Automotive News reports that there were attempts at dealmaking that Tesla turned down. The Greater New York Automobile Dealers Association said it would allow Tesla's existing New York stores (all three of them) to keep operating but would not allow new stores to open. Tesla turned down the deal. A Republican sponsor of the bill also offered to put in a Tesla exception, so as not to "adversely impact any business operating in the state of New York," Senator Lee Zeldin told AN.

The president of the Greater New York Automobile Dealers Association, Mark Schienberg, told AN that Tesla should just set up dealers like other automakers (something Musk has explained is a bad idea) and that Musk has "just chosen that he'd rather not follow any of the rules and regulations and standards that each state has, and that's why there's a pushback right now."

The "pushback" here was started when the New York dealers association filed a suit against Tesla in late 2012. The NY State Supreme Court ruled this year that they did not have a claim to file suit. With this case and more pushback in Texas and Massachusetts and other states, we wouldn't be at all surprised if this issue goes national at some point.


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  • 104 Comments
      KaptnKauto
      • 1 Year Ago
      Congratulations Tesla!! A small victory in a larger war I'm sure. Mr. Musk, you sir are a hero for standing up to what you believe in and for not taking the deals they were offering you and selling out. Hey dealers, are you afraid of real competition? Why not just treat your customers nicer and compete the honest way? You don't have take Elon's lunch just because he has a better sandwich. Why are there dealers anyway!? I want to buy factory direct like I do with everything else in the world. I want to go to the GM plant that's 1 hour from me and buy directly form them, what's the big deal? what's that you say, you will lose your mark up? Oh well that's too bad cause I've lost my job about 3 times since the recession and no one is crying for me. I want Elon to make a T-shirt so that I can actually where a brand that's made of something substantial. He started Tesla from thin air, fought for it like a child when the bullies wanted to bury it and now his baby is growing up and he's still protecting it. That's a man who cares, not about the bottom line, but about something real, honour. Dealers are supposed to be about the customer, but 99.999% they are about their own bottom line, look at all the studies, once you buy the car, they don't give a flying monkey turd about you. You're just a paying customer to them. If the dealers are sincere about their issues, let's have them get a rep and face Musk one on one in a forum.. They can't cause they in fight so much they can't get together on anything. Sorry to tell you dealers, it's 2013.... the 60's and 70's are over.... get over it. Elon (Tony Stark) Rules!!!!!
      graphikzking
      • 1 Year Ago
      I really fail to see the advantage of traditional dealer with an electric car. Most dealers make a lot of their money with maintenace, and I can see dealers saying that they need to see the car every 3 months for something other than tire rotations. My Toyota dealer used to swear by every 3 months. As soon as Toyota gave free service with the cars, it changed to 6 months. Hmm.. same car...same miles driven... wonder why. And Toyota isn't the only dealership like that. BMW, Mini, Infiniti dealer are also the same here in the Philadelpha metro market. (We talked about it at lunch that everyone with included maintenance, now the dealers don't want to see us as much)
        knightrider_6
        • 1 Year Ago
        @graphikzking
        I got a quote of $950 for 60K miles service from the dealership I bought the car from. Another one gave a quote of $600. I took it to Carmax (it's very close to my house) and asked them to do only the service mentioned in the manual. I paid less than $100.
      Dan
      • 1 Year Ago
      My dealership just tried to sell me on a Fuel injection Service for only $150 and told me it requires it every 15,000 miles, even though Ford doesn't require it. In fact, the dealer lied to me and said my car doesn't have a fuel filter and needs to have injection service due to this "fact." However, my car, a 2012 Fiesta, does have a fuel filter and it's permanent with a minimum life of 100,000. Ford warns against using any solvents in the fuel injection system as well. Now, ask yourself, why does Elon have an issue with the franchised dealer system?
        Brodz
        • 1 Year Ago
        @Dan
        Unfortunately, yes, there are bad dealerships out there. But that's something that car manufacturers need to deal with through their own means.
      purrpullberra
      • 1 Year Ago
      Dealerships are in the wrong in these attempts and each time this comes up Tesla have 80% or more of the population agreeing that they should be allowed to sell their cars. These attempts to buy laws that will exclude Tesla in any way are guided by the worst intentions because these are some of the worst humans on the planet. Dealerships steal from old-people, they fake problems and overcharge and all the lies and pressure tactics from all the money grubbing saleslosers have left the taste of vomit in the mouth of everyone who has ever set foot in an auto dealership. In short, Dealerships are the worst institutions in the country. Worse than drug cartels and biker gangs. They are worse than the CIA and the NSA. They think they are in charge of state legislatures because they buy the favors of the worst people in the country, uneducated, overly-religious state legislators who are permanently desperate for the ill-gotten money dealerships bribe them with, Americans hard-earned and STOLEN cash. So let's see: Movie theaters, schools, marathon finish-lines but no dealerships. How is that possible? I honestly can't believe it. But I still have faith that someone in this country is going to finally be fed up with dealerships and this perpetual bribery they use to keep power they don't deserve. If dealerships were so good for people than they could compete without any laws to help them. I would gladly give up my "right" to have my brave, BRAVE dealership fight(!) for me when I have a problem with my car to just have the option to buy a car without dealing with the smarmiest, low-life's alive, US car dealership workers. It's a phantom 'benefit' anyway, there is no proof that dealerships make anything better for consumers and a TON of evidence and experience that shows clearly how awful it is to 'deal' with them. I'm glad for this fight because this should spell the end for dealerships on the whole around the country. No one wants to support people who lie and cheat and then try to prevent folks from buying an AWESOME US-made car. At the grass-roots level only stooges and those awful enough to work at these 'dens of inequity' think they are acting responsibly. The rest of us see dealerships as the agents against consumers they have constantly proven themselves to be. Try to waste as much time as you can at all of your 'favorite' local dealerships, play with them. Have fun. Be as honest with them as they have been with you! :) And when they don't get the hint go ahead and tell them that you won't buy from any dealership until the NADA stops this effort. Eff 'em!
        Feurig
        • 1 Year Ago
        @purrpullberra
        Wow, what a long rant about something you know nothing about. Maybe you should try selling cars for a few months to get a different perspective. In a car-buying scenario, both parties are always out to get the most for themselves. Among salesmen, there's a saying "buyers are liars." While it's true dealerships can lie to keep the customer happy and hopefully make more money, it's really the nature of business similar to any business. Not to be confused, I support Tesla in this endeavor, but working for an auto group myself, I always wince at some of the ignorance people have about the car business in general.
          otwpalm
          • 1 Year Ago
          @Feurig
          And after 50 years of buying cars I am stilll amazed at the ignorance car salesmen demonstrate on the products they are trying to sell.
      • 1 Year Ago
      Leave Tesla alone! It all about control and the almighty dollar, forget about the consumer. The Tesla Company is doing a great job of marketing and selling there cars. We don't need any middle men. Period!
      • 1 Year Ago
      WHO'S TRYING TO STOP THE ELECTRIC CAR NOW!! TRY COMPETING INSTEAD OF COMPLAINING !
      • 1 Year Ago
      What ever happened to good old Capitalism? Tesla is a good company that had a great idea and a great product. Does anyone really feel they are a threat to big oil, the large auto manufactures, or the Automobile Dealers Association? Leave them alone and let the product flourish!
      nomad1963
      • 1 Year Ago
      So, a company that operates and sales vehicles is wrong because they will not pay for large show rooms and sales people that sit around. New York is home to Mayor Doomberg and his nanny ideas of telling everyine what to eat and drink and I thought he was all for the global warming, err climate change, or what ever they call it now, and Tesla would be more acceptable then other vehicles. Funny, it looks to be a money issue.
      Wetstuff
      • 1 Year Ago
      Greater New York Automobile Dealers Association sounds like other shakedown crews in NY and NJ. "Hey - we want 'Our' piece of your business." Jim
      Jeff Gilleran
      • 1 Year Ago
      The fact is that the typical auto dealer is used to having it their way with customers. Since Tesla is working to work a new sales model, the dealerships are complaining it as "unfair". Competition is everywhere. I hope Tesla succeeds in his efforts to allow customers to have what THEY want.
      leong
      • 1 Year Ago
      come on guys... dealers are definitely not the worst... Realtor rips 5% off your house, each and every time.
        Vlad
        • 1 Year Ago
        @leong
        Shall we also not prosecute anybody but mass murderers, since they are clearly not the worst? The field of real estate is also hugely outdated and ripe for disruption, btw. Redfin is just the first small step.
        jeff
        • 1 Year Ago
        @leong
        You can buy a house without a Realtor. No law says you have to use them.... BIG DIFFERENCE...
        ctsmith1066
        • 1 Year Ago
        @leong
        In defense of real estate agents, 5% is not a huge price to pay for the service they provide. Car dealers are straight up unnecessary middle-men.
        MTN RANGER
        • 1 Year Ago
        @leong
        At least realtors are optional. I sold/bought my last two houses by myself. It isn't rocket science.
      Dreez28
      • 1 Year Ago
      Musk is the man! Hey, if your business fails because it can't compete against an emerging market and you didn't maintain enough assets to reinvest to remain competitive, too bad so sad. Employees can transition from one enterprise to another to another. The economic state of NY will be all the better for it.
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