It's one thing to try to cozy up to the federal government. It's another to mess with Texas. Tesla Motors chief Elon Musk is pondering the former after attempting to do the latter in an attempt to overturn the age-old laws banning automakers from operating their own car dealerships, Automotive News reports.

Musk has long argued that conventional, independent dealers do a substandard job selling unconventional vehicles like the Tesla Model S battery-electric luxury sedan. Musk and Tesla have taken on states such as Minnesota, Virginia and North Carolina over the issue. New York and Massachusetts have attempted to shut down Tesla retail stores, but it's Texas where the most formidable challenge lies because state laws banning automaker-owned dealerships there are the most ironclad.

Musk may be in the process of trying to gain favor with Washington, D.C. legislators and could lobby Congress or file a federal claim alleging that the state laws banning carmaker-owned dealerships are unconstitutional. Tesla loyalists have also joined the fight, with one petition sent to the White House gaining over 100,000 signatures supporting the company in the dealer issue.

Dealer advocates have long argued that the separation of automaker and dealer ensures better customer pricing while protecting the consumer in case an automaker goes under. Such advocates have also argued that letting Tesla operate its own dealerships could set a dangerous precedent both in the US and in overseas markets such as China.


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  • 50 Comments
      Jim1961
      • 1 Year Ago
      This fight between Tesla and NADA results in more free publicity for Tesla. Keep it up NADA!
      purrpullberra
      • 1 Year Ago
      As to what power does the president have: he can make the FTC, the federal trade commission, start an aggressive investigation and putting all sorts of legal hurdles in the way of the dealerships reps and the politicians who are doing their bidding. Lawsuits, threats, fines, inquiries, bringing them before public panels to be excoriated on TV, publicize the worst dealerships, lobby states and courts to intervene. Bring in the IRS to investigate whether these people are doing anything illegal. The feds can be a nasty intrusion and makes ones life hell. That should happen to the NADA people and at the state level too. The people only people that wouldn't like it are already lost causes that can't be counted on to understand even minimally complex issues such as interstate commerce vs. commerce that occurs inside a state. Like some of the unbelievably stupid fools who come on here with that argument. But those folks that are sick of the BS involved in buying a car would line up behind Tesla and the administration that did what I recommend. There is virtually no risk in this turning out badly for Tesla or the President/FTC/IRS. Not that those are perfect entities but this fight is one where they can be seen as good and helpful.
        Marco Polo
        • 1 Year Ago
        @purrpullberra
        @ purrpullberra You're getting kinda crazy......Are you really suggesting that the abuse of federal power, intimidation of legislators, abandoning democratic process, just to get your own way can ever be justified ? The last President who thought that was a great idea, was forced to resign. The democratic process is always frustrating to those who can't get their own way. But the answer isn't an abuse of power.
          DrSandman
          • 1 Year Ago
          @Marco Polo
          So.... you're suggesting that POTUS treat the remaining dealerships like Tea Party Americans and Conservatives. Got it. Remember, this president joked about turning the IRS onto his "enemies" in 2009. Furthermore -- for Chrysler and GM dealers anyway -- the only dealerships that are left are the ones that already contributed to the OFA compaign. More than 80% of the dealerships that contributed to Republican (May the GOP RIP. Soon.) candidates were mysteriously selected for shuttering in the Great Recession. Who would he strong arm? Ford dealerships? Imports?
      Grendal
      • 1 Year Ago
      I will repeat that the Dealerships Associations could write amendments to allow Tesla to skirt their rules. Instead they have chosen to advertise to the public what they do and, as evidenced from most comments, the public doesn't like them and what they do. This is going to cause a lot of problems for them and it is in their best interest to give Tesla a waiver in whatever BS legal-ease they need to before this fight blows up in their face. The public will win. If Tesla sold just another product then NADA might get away with it. Tesla sells a product that lots of consumers want and are demanding. Consumers will burn the building to ground if they don't get the stuff they want. That's America.
        Marco Polo
        • 1 Year Ago
        @Grendal
        @ Grendal It's estimated that the dealers employ, or directly affect the economic, social or community. lives of over 2 million Americans. Now, I'm a Tesla fan, (I've got my name down for a UK RHD model S ), but there just aren't 2 million people queuing up to buy a model S ! Few citizens will change their federal vote based solely on this issue. In contrast, local state politicians rely on grass roots community organizations to get elected. This is where the dealer is strongest. He's a member of the local community, he supports ( and probably serves as chairman) of the very organizations the local state legislator needs to get re-elected. Now, that's realpolitik in America !
          Marco Polo
          • 1 Year Ago
          @Marco Polo
          @ Grendal I agree a compromise is obviously best for all concerned. However, I think you are not seeing the total picture in the PR war. On the Internet, and national arena what you say may be true, but the laws are primarily state laws where the consumer matters much less than the influence of local communities. The NADA pollsters, advise that the greatest support for Elon Musk's position comes from voters in concentrated pockets and are unlikely to actually vote ! NADA polling shows that the average regional dealer can muster an average of 5-10,000 votes in an electoral district. The local influence is very strong and any campaign by local dealers, would muster an army of volunteers, and campaign material would speak to local issues. Since very few in America's suburban heartland have ever heard of Tesla, let alone buy one, on a local level Tesla would appear as a super-rich Californian, trying to put the local guy out of business. Elon may be a hero on national TV, but less so on local suburban TV ! Elon is also hampered by his followers, whom as you can see, get a bit extreme ! Could you imagine how "purrpullberra's " treatise on how Obama should use Presidential power, would be received in East Jesusville, Texas? It's no use fighting battles you can't win. Both sides need to approach a respected national figure to broker a compromise.
          Grendal
          • 1 Year Ago
          @Marco Polo
          That's the point I'm trying to make. A compromise by the dealers to allow "the difference" of Tesla while shoring up their own position seems like the best case scenario for them. Consumers don't like jumping through hoops to get what they want. If the dealers, already not liked by the consumers, put up obstacles in the way of the buyers then they are just making themselves look even worse in those peoples eyes. Legislators don't like getting caught protecting a interest group when their constituents are clearly aligned against that interest group. This whole debacle is really shining a bright light into places that would much rather be working under the radar. In many ways, I'm trying to protect the dealers by saying that they are fighting a losing battle. They are already losing in the PR war. They certainly don't need to lose the legislative war. Exceptions and compromise is the easy way to solve their problem.
      SteveG
      • 1 Year Ago
      They don't just do a bad job selling unconventional cars. Most salesmen can't do more than read off the brochure. Just ask a technical question about the car, none of them can ever answer those. Dealers are middlemen that need to stop existing. Let me test drive a sample model and then order the car I want.
        • 1 Year Ago
        @SteveG
        I completely agree it's a sad thing when you know more about the car than the salesman.
          SteveG
          • 1 Year Ago
          I own a 2012 insight and my spouse was looking at a used civic. The salesman tried to claim it would get comparable mileage, I called him on it and he still insisted. I finally turned on my car and showed him the display showing my lifetime mileage of 49.5mpg. He said nothing. Then he tried to claim in the civic the seat folded down unlike my car, which is false the insight seat folds down fine. The next thing he tried to claim when I asked about climate control was that no honda has that only acura. My car has it. He literally was attempting to argue with an owner of a car about that cars features. He also claimed the car had been cleaned and smelled like nothing when she stated this car smelled like a wet dog. I bought my car from the same dealership and he still wanted to diss it while knowing nothing about it.
        brotherkenny4
        • 1 Year Ago
        @SteveG
        But in reality they sell to the masses. The occasional exceptional individual is not even on their radar. Sure salesmen are dumb and greedy and have no skill, but they sell to people who are mostly less than that.
          Dave D
          • 1 Year Ago
          @brotherkenny4
          Sad, but true.
          purrpullberra
          • 1 Year Ago
          @brotherkenny4
          No one is less than a stupid, lying car salesman. Maybe war criminals.
      Weapon
      • 1 Year Ago
      While there are things congress can do, I don't think congress can label laws as "unconstitutional", that is up to the judicial branch.
        Dave D
        • 1 Year Ago
        @Weapon
        I'm not aware of anything Congress can do other than line the pockets of their buddies in exchange for votes.
      Vlad
      • 1 Year Ago
      @Marko Polo: You are looking at urban-rural divide in a strange way. Most Tesla buyers are suburban. Rural dealers may have "roots in the community", but it is absolutely not true in suburbia - dealer here is the same faceless corporate entity as Walmart. If a car buyer is buying a car "year after year", he is not a typical car buyer. Even in the best of times Americans bought cars every 3-4 years (not all of them new), this is closer to 6-7 years now - salespeople rarely hold on to same jobs for that long. Success ratio of salespeople does not indicate that this model is better - there is no competition between franchised dealers and direct sales on Volts and Leafs. And the way dealers fight for laws that protect them from the competition shows what they think of their chances without these laws.
      jeff
      • 1 Year Ago
      So basically, for the privilege of paying a dealer thousands of dollars extra I get to: 1) deal with a sales person who rarely knows more about he cars than I do. They almost always smell of cigerette smoke and are very annoying... 2) spend a few hours playing the "guess how much the car cost game" 3) then I get to play the "guess that fee game" the one where the dealer tries to add the ADM Fee, paperwork Fee, the rust proofing fee, the floor Mat fee, the window etch fee, the scotch guarding fee, etc.... This blows another hour of you time telling the dealer I A. NOT GOING TO PAU THAT FEE... 4) then you get the primal age of playing the "financing shell game". I find this little annoyance odd in that I always pay cash for my cars... Then their is the final plea to give them a 100% customer satisfacition rating on e manufacture's survey because anything else is a failure....... Yea right..... OR I could go to a tesla store, and talk to a knowledgable sales person, get a test drive. Go home and in the comfort of my one home go on line and order the car exactly the way I want it and have it delvered to my door with a few mouse clicks..... Guess which one MOST people would prefer.... IMHO, dealers can't go away fast enough.....
      bluepongo1
      • 1 Year Ago
      Zombie business model keeps staggering on.... "dangerous precedent" (last paragraph) is when people realize dealers are just added overhead due to the internet. :-P
        mikeybyte1
        • 1 Year Ago
        @bluepongo1
        That line jumped out at me as well. Can't wait to hear the detailed horror stories of the "dangerous precedent". Screams of desperation.
      Jim1961
      • 1 Year Ago
      There is one simple thing auto dealers could do that would make the car buying experience a million times better for customers. They could use non-commissioned sales people. There are laws that require manufacturers to sell their products through independent dealerships but there are no laws banning the practice of a non-commissioned sales. I wonder what percentage of car dealerships choose to pay their sales people a straight salary without commission. I don't have to do any research to know that number is pretty damn close to zero. Why is this so? I have a hunch it's because franchise owners believe obscenely enormous profits are more important than customer satisfaction. I hope the success of Tesla gives franchise owners a clue of how enormously dissatisfied we all are.
        Marco Polo
        • 1 Year Ago
        @Jim1961
        @ Jim1961 You seem to have a very odd understanding of the profit ratio's in new motor vehicles. The dealer makes only a very small margin on new Motor vehicles. The days of huge profits, disappeared with tail fins ! Sales commissions, bonuses etc, are common throughout all sales and customer service positions. This is party to reward success, but mostly to compensate Auto-sales people for the long hours and weekends spent working. Anyone who is old enough to have spent time in a socialist economy, quickly appreciates the principle of improving service by paying incentives. All business is really just "working on commission". Even merchants like ice-cream vendors, are commission sales people. The trader buys something from a manufacturer, and sells it at a profit. That profit is his ''commission". Good salespeople work very hard building and maintaining relationships with customers. Good dealers do exactly the same. Like all businesses, car dealers have their fair share of unethical, or inept, sales people. However, car dealers also encounter some pretty unrealistic, and dishonest customers.
          ReflexVE
          • 1 Year Ago
          @Marco Polo
          I just looked it up. There are no Jeep dealers in the greater Seattle area that are not part of a regional or national chain now. I looked up where I grew up, Eugene Oregon. A smaller community. Also all Jeep dealers are part of regional or national chains. Where is this hypothetical local dealer with deep ties to the community? I think this was the case maybe 20-30 years ago, but it has not been the case in most areas for a very long time. And it is likely a good part of why the new car experience is at this point not any better than a used car experience. Worse in many cases.
      Marco Polo
      • 1 Year Ago
      @ ReflexVE Yes, there's a lot of merit in what you say. Like every large industry, there will be great dealers, and those who need to improve. I'm a director, and majority shareholder, in a business making, renting leasing specialist EV's. Over the last 16 years I've been astonished by the difference in performance and customer service, even small changes of personnel can make to the customer's experience. I'm not an advocate for either Tesla's direct sell model, or the franchised dealer business model. I can see advantages and disadvantages in both systems. But It's not hard to work out the politics of this dispute and conclude that the conflict will be long and exhausting. In such circumstances I think it's best for all parties to compromise.
      Jim1961
      • 1 Year Ago
      Some people believe the best reason to buy a Tesla is to help save the planet. I couldn't disagree more. Who wants to live on a planet where traditional car dealerships are allowed to exist?
      Koenigsegg
      • 1 Year Ago
      bomb all dealerships and gas stations
        EZEE
        • 1 Year Ago
        @Koenigsegg
        You are leaving out the dealers families. Maybe we should set up camps to house them.
          bluepongo1
          • 1 Year Ago
          @EZEE
          Just for the sake of clarity Tesla Fan doesn't own a Tesla vehicle, let alone speak for anyone working for Tesla Motors & EZEE was his usuall funny ( and sarcastic ) self.
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