Tesla's fight with America's car dealers

&#62; <i>Until then, said O'Connell, Tesla will sell its cars the way it wants. If some states don't allow that, then Tesla will simply sell them elsewhere.</i><p>I think this last line of the article is very important. This has the power to get the consumer on Tesla's side of this fight. If enough of the right people in Texas (and other problem states) want this car and think the laws are stupid... they'll need to find a way to make that happen. Laws can be changed. If not then they'll just get them out of state.

This is a straight-up technological disruption of an existing sales channel. The third-party dealerships are an artifact of primitive 20th century supply chain management - they're basically a caching mechanism to handle latency in the network, to put it in computerese terms. With the power of computers and online ordering, Tesla has no need for these dinosaurs. They can "cut out the middleman and pass the savings on to you", terms every consumer can understand.<p>The fear for the dealers is not that Tesla will go around them, but that other manufacturers will follow. The big car makers already have experience setting up alternative brands to play with techniques that are too radical for their mainstream business (remember Saturn?), so it would be easy enough for something like GM spinning the Volt off as a new car company, not just a Chevy, and running Tesla-style sales.<p>If that happens, dealers are doomed.

I love how Texas, of all places, puts up the most regulatory hurdles against a new technology and business model.

Money can't buy press like this. Suddenly Elon Musk is the underdog fighting the vested interests that be and Tesla is the little engine that could.

The article brought up the point that Tesla owns all of the service centers. I don't care if Tesla owns all the dealers, but having a monopoly on Tesla repair would be bad for consumers. If the process for becoming a "Tesla mechanic" allowed competition with the Tesla service centers, that would be OK.

The American automotive industry is where sleaze bags get trained. It is home of the biggest scum of the Earth. I currently contract with a startup that caters to it, and am impressed daily with how vile these people are. Its is downright evil.

&#62; The traditional dealer franchise system is best for car buyers, Wolters insists, because it preserves competition between dealerships selling the same products.<p>I'm not sure I understand this argument. If I follow this argument to completion, what they are basically saying is that when you have lots of middlemen selling the same product, that "preserves" competition between them, limiting the amount of additional cost they add. Wouldn't removing the middleman also remove that additional cost?

Wow. In "The Land of the Free" a company cannot sell its own products as it pleases and is potentially forced to go through middlemen that provide no added value other then forcing folks to haggle?<p>This is not medicine we're talking about (where I can see pharmacists as an important part of the system).<p>How can it even be suggested to be illegal to open up a store and sell your own product? Should Apple be barred from selling their own products in Apple stores and go through Walmart instead?

there's a reason they call them stealerships.

Isn't this <i>exactly</i> what happened to Preston Tucker?

In a sane system, America's car dealers would be viewed as an illegal cartel that interrupts trade and would be abolished. Indeed, a trade-interrupting cartel is exactly what they had in mind as they pursued a legislative agenda for decades to make it nearly impossible to sell new cars in the US without going through their system.

Will Elon Musk fold under the pressure and cooperate with the dealer network when they offer to sell at low to no markup to bring him into the extortion racket of Car Dealers?<p>I loathe buying cars so much because of the snakes that run those Dealerships. They want the car buying process to be so excruciatingly painful so people will leave money on the table to "Just take my money and make the pain go away".<p>How far are Dealers willing to go to make it illegal for Tesla to sell cars anywhere? Would they go so far as to outlaw the production of Tesla vehicles in America because it goes against the Dealer protection racket?