
Georgia dealers want Tesla store shuttered for selling too many Teslas - hboon
https://sg.news.yahoo.com/blogs/motoramic/georgia-dealers-want-tesla-store-shuttered-for-selling-too-many-teslas-192235038.html
======
Systemic33
I have no words for how absurd this is.

What happened to free market economy? How are americans totally fine with a
company being denied its ability to sell its product to its end users?

And it's probably the exact same people later chanting that Europe is
communist...

~~~
atlantic
It would be interesting to build economic models of markets that take into
account the capacity of large agents to make changes to the rules that govern
the functioning of the market itself (via their influence on the legislative
process through lobbying).

I suspect that if such models were studied seriously, economists would have a
much less rosy view of the wonders of the free-market economy. And the same
goes for the benefits of a democratic system versus other forms of government.

Because lobbying is not the exception - it's absolutely standard.

~~~
TorKlingberg
What form of government would be less sensitive to lobbying by commercial
special interests?

~~~
Zigurd
Demarchy, with short terms of office.

~~~
nitrogen
Wouldn't the offices of the demarchy accrete long-held staff positions and/or
outside consultants to compensate for the office holders' inexperience? And
wouldn't those staff members and consultants be vulnerable to lobbying?

Even if we went straight to direct democracy (which I like in theory, as well
as I like the idea of demarchy), the special interest with the biggest
advertising budget would win.

I wonder, could an elected technocracy (by which I mean different governments
and representatives for different spheres of influence) solve this by limiting
both the tyranny of the masses and the influence of any one corrupt official?
Or would whatever process controls the final budget still have enough power to
corrupt the system?

------
Shivetya
Well I will give my state this, we are one of the more friendly states towards
electric cars. You can spot a Nissan Leaf about anywhere you go and seeing a
Tesla, or even one of two Fiskers still about isn't a surprise.

The simple matter here is, Tesla needed to sell cars before the law could
accommodate a manufacturer direct sales model. Hence an exemption was carved
out, likely at the behest of someone influential, so they could.

Georgia automobile dealerships have way too much power in our state. They were
able to shove through without opposition in the legislature a rewrite of
taxation on automobile sales. They wanted all used car sales business to
themselves and they nearly got it. Now even private party sales of used
vehicles are subject to a tax of close to seven percent. Hence, you buy a car
from your friend and go to get a tag, you pay that tax based on the assessed
value of your car, not what you bought it for. This value is usually lower
than trade in value to a dealer, but figure the shock when you buy a 20k car
and you need to fork out 1400 for tags.

I am very sure this situation will get fixed quickly. The state wants to
appear friendly to tech and manufacturing. Auto dealers, liquor, and
cigarettes, are probably the most protected in Georgia but politicians bow to
pressure in election cycles to the populace here.

note, the real fear is not Tesla, its that other manufacturers will get to
setup stores too.

~~~
alphydan
> 20k car and you need to fork out 1400 for tags.

If that shocks you, you've never been to Denmark where you pay $36k in tax on
top of the $20k for the car [0].

[0] [http://www.copenhagenize.com/2012/10/danish-180-tax-on-
cars-...](http://www.copenhagenize.com/2012/10/danish-180-tax-on-cars-is-
rather.html)

~~~
GFischer
You think that's a lot of taxes? You haven't been to Uruguay, we have more
than 200% taxes.

Example:

Citroen DS4 in Denmark, 274.000 kr (U$ 39.000)

Citroen DS4 in Uruguay, U$ 49.000

Supposedly Malasya is the 2nd most expensive country to buy cars in the world,
and the Citroen DS4 is priced at RM 149,888 - U$ 47.000 (still less than in
Uruguay)

and in Norway, the most expensive in Europe, it costs kr 283,900 (U$ 45900).

I think the only place more expensive than Uruguay is Singapore.

Sources:

[http://autobuzz.my/2014/06/citroen-ds4-1-6-turbo-a-
dashing-f...](http://autobuzz.my/2014/06/citroen-ds4-1-6-turbo-a-dashing-
french-crossover-with-a-different-spirit-video/)

[http://www.citroen.no/Resources/Content/NO/PRISLISTER/Prisli...](http://www.citroen.no/Resources/Content/NO/PRISLISTER/Prisliste_DS4.pdf)

------
waterfowl
I just wish you could option out a car online and click and pay by card(or
bank transfer for financing etc) like you do with a computer. Ideally deliver
it to your house, but picking it up at a port or a freight rail place or
something is also a palatable option.

The notion that if I want car x, in color y, with trim z, I have to shop
around and "find one that exists in those options" is not something that
should be on me as a consumer.

I'm sure dealerships will custom order a car for you, but that sounds like a
pain in the ass and I'm sure they charge you more for the privilege of buying
the 20-50k product you actually want.

~~~
zippergz
I have custom ordered a car through a dealership (not a Tesla). I'm pretty
sure any dealership will do it. It's pretty standard. And they didn't charge
me any more than I would have paid for something off the lot (I was able to
negotiate the price the same way). However, it is definitely a pain. I had to
wait months and months for the car to show up. I'm not sure if there's a good
way around that, but ever since then, I've been much more inclined to just buy
whatever is available that's closest to what I want, even if it's not exactly
right. I do wish there were a better solution for this.

~~~
sliverstorm
_However, it is definitely a pain. I had to wait months and months for the car
to show up. I 'm not sure if there's a good way around that_

What, are you saying I won't be able to upgrade to one-day shipping for $2.99?

~~~
toomuchtodo
You okay getting a Versa?

[http://www.amazon.com/gp/feature.html?docId=1001359341](http://www.amazon.com/gp/feature.html?docId=1001359341)

[http://autoweek.com/article/car-news/buy-nissan-versa-
note-t...](http://autoweek.com/article/car-news/buy-nissan-versa-note-through-
amazon-sort)

~~~
sliverstorm
Doesn't appear to be eligible for Prime :(

------
captainmuon
I wonder if Tesla could somehow circumvent these laws.

Open a fake mailbox company in another state. Sell them the cars at production
cost, and let that company "import" them.

Actually open a dealership (using another company). This probably won't work,
as there might be a lot of red tape involved. Possibly there is a limited
number of concessions, or some other hurdle, otherwise they would have done
that.

Using middlemen, put Teslas on eBay, Craigslist, etc.. Make it somebody else's
problem to deal with.

My favorite: Don't sell cars at first. Just do car shows, Tesla parades,
Nikola Tesla tribute parties, and so on. Visit schools and communities and
tell people how good electric cars can be for the environment. Partner with
schools and driving instructors to get kids to learn driving in Teslas. Get as
many people as possible to test-drive one. That's the most important thing.
Then just happen to have a iPad around so people can order one :-).

There might be a law preventing them from even selling them over the internet
into many states - I don't know if the laws only apply to physical stores or
not - but in this case they could fall back to relying on the black market. At
least for a while, while they get the legislation sorted out.

Last but not least (and only half seriously) try to frame the current laws as
"communist". I picture an ad with thin, sad people in fur hats, waiting in a
long line for their car, with hammer-and-sickle ration coupons in their hands.
Contrast it with happy free people riding around in their Teslas under the
Californian sun. Unfortunately, that might even work.

~~~
MichaelGG
Tesla already does such things. In many places, they don't "sell" cars. They
talk about them, then let you go buy them yourself, perhaps on a computer they
happen to have setup right there in the "store".

In Denver's Park Meadows mall, on Sunday they have a big sign saying the State
of Colorado prohibits them from "selling", so come on in and sell it to
yourself.

~~~
johnward
I wasn't even sure you could actually buy through a Tesla store. I think they
just direct you to the website. I took a test drive of a Model S P85 this
weekend and they didn't even discuss the sale just wanted to know what I
though overall. Then today someone contacted me about purchasing. I can't
afford a Model S anyway but I am not very interested in used Model S lease
returns or the Model 3.

------
ams6110
I don't agree with enforcing these laws on Tesla. Tesla has never had a dealer
network which might need or want protection from a manufacturer undercutting
them in a market they worked hard to develop (this is why these laws exist).

Yet at the moment I don't think this really hurts them. If anything its giving
them a ton of free advertising and building consumer goodwill. Tesla is a
high-line brand. A status symbol. They are not impulse purchases in the way
that mainline Fords, Chevys, Toyotas are (i.e. people buying because they need
a car, any car, and they liked the color, etc). If you want a Tesla, you know
that going in. You aren't going to buy a Leaf or a Volt instead because you
think it looks pretty. You don't really even need to see one in a dealer
showroom, and for what they cost, traveling a few hours to buy one is not a
huge hurdle. Where I live, if I want to buy a new Porsche, a Ferrari, a
Maserati, etc. I would have to travel several hours to the nearest city with a
dealer.

~~~
Fuzzwah
Your point is valid for the current Tesla model line up. When they finally get
down to their "affordable" model then these problems will have a clear effect.

------
adamnemecek
Seems like Tesla has a different opinion
[http://www.bloomberg.com/news/2014-09-03/tesla-denies-
georgi...](http://www.bloomberg.com/news/2014-09-03/tesla-denies-georgia-
dealers-claims-that-it-broke-rules.html)

~~~
300bps
_Tesla said the sales restrictions under its license agreement are applicable
on a calendar year basis. GADA, which represents 500 dealerships, said in its
Aug. 29 petition that Tesla sold 173 sedans in the period from October to
June._

So in essence, the law perhaps ambiguously states that you can not sell more
than 150 cars in a year. The dealerships are interpreting this as "more than
150 cars in any 12 month span" whereas Tesla is interpreting this as "more
than 150 cars in a calendar year". On its face, Tesla has the stronger
argument.

~~~
smackfu
They still seem pretty close to the line there. I wonder if they were planning
to stop sales at 150.

~~~
randyrand
Not as close as you think.

If it's not calendar months, then it is almost impossible to make actual sense
of. If you wanted to limit yourself to 150 cars per year regardless of the
start and end months, then you have to limit yourself to 12.5 cars a month
which makes a whole lot less sense. Even still, at the day level you then have
to restrict yourself to 0.411 cars a day. Then the hourly level...

Things are made simpler if you aren't close to the limit, but what is the
purpose of expressing a limit if you aren't intended to get close to that
limit?

for example, let's say you have this sequence (assuming the law is 150/year
regardless of calendar months:

12.5, 12.5, 12.5, 10.5, 14.5 , 12.5, 12.5, .....

Boom, you're over if you continue to sell at 12.5 a month. You can compensate
for the 14.5 by having another month of 10.5 within 12 months of the 14.5
month, but then you are under the limit within a different 12 month period and
can/should have another 14.5 month to make up for it. The pattern repeats
itself...

The overall point is that this would be a very stupid way to express a limit
and it is far from logical to interpret it that way.

------
rdudek
Here is one thing I just don't understand about these laws. I know they're
setup to protect dealerships, but can't Elon Musk spin off a side company that
is basically a car dealership company only?

~~~
tedunangst
Usually the law requires two things. Separate ownership: musk couldn't own
both. Open access: anyone must be allowed to open a tesla dealership.

~~~
ceejayoz
They could presumably enforce on a franchise level salaries instead of
commission and fixed pricing, though. That'd address most of the problems in
dealerships.

~~~
Crito
Apparently one of Tesla's concerns is that they do not want their cars to be
sold by anybody who also sells other cars. They don't think that electric cars
will be treated fairly by sales staff that also have the opportunity to sell
ICE cars.

Maybe they could put terms into their hypothetical franchise setup to forbid
franchises from also being dealers for other companies, or sharing sales
staff/floor space with another dealership. I'm not sure about that though.

------
krschultz
Keep in mind that for the dealers, this is a life or death existential fight.
If Tesla wins, the other car manufacturers aren't far behind.

For Tesla, it's not significantly more important to their success than
overcoming general disinterest in electric cars, figuring out how to
manufacture batteries for less money, or any of its other business challenges.

~~~
psaintla
Exactly, which is why I never understood why people demonize these car
dealerships, yes they are an unnecessary middle man, yes they are annoying to
deal with but they are only doing what is logical.

~~~
Zikes
Payday lenders' circumvention and bending of laws to continue their own
existence are equally logical.

~~~
psaintla
Yes, and you shouldn't be angry at them. You should be angry at the people who
allow laws to be passed in their favor.

~~~
ceejayoz
It's entirely possible and legitimate to be angry at both.

~~~
psaintla
I don't see the point, you only have control over one of those groups.

~~~
ceejayoz
I'd suspect most people get angry at things they can't control fairly
frequently.

~~~
psaintla
That doesn't mean it makes sense, for instance someone down voted every one of
my comments. Being mad about it would be just as illogical.

------
beedogs
1914 headline: Georgia stagecoach dealers want Ford factory shuttered for
selling too many automobiles

------
sliverstorm
Does anyone know _why_ this 150 vehicle limit exists?

~~~
lupin_sansei
It's a law to protect dealers being undercut by the manufacturers selling
direct to the public. [http://truthonthemarket.com/2013/06/24/tesla-and-the-
auto-de...](http://truthonthemarket.com/2013/06/24/tesla-and-the-auto-dealers-
lobby/)

~~~
rhubarbcustard
Does that law make any sense other than to protect the jobs of the dealers?

~~~
rweir
it was initially to stop manufacturers vertically integrating all the way from
building cars to running stores.

~~~
logicallee
Which would suck why again?

e.g. why on Earth would anyone hate the existence of physical Apple stores,
for example? (which fits the description of "a manufacturer vertically
integrating all the way from building [PC's] to running stores.")

~~~
psykovsky
And yet you can still buy Apple stuff at any major retailer or high street
store. The retail lobby doesn't seem to mind much.

~~~
kevin_thibedeau
There was a time when Apple only sold through franchisees and were unable to
sell direct.

------
netcan
I have a feeling the US auto retailing comples will become a canonical example
of various concepts for Econ textbooks for a long time. Austrian creative
destruction, regulatory capture. I also think there might be room for new
concepts such as regulatory accumulation and you could find some good examples
of this here too.

For anyone who knows the ins and outs of the system.. What prevents a
dealership from setting up a base in an unregulated state and selling new cars
directly to consumers everywhere in The States using fixed pricing. No
showroom, test drive or salesman costs. Just a website with a price and trucks
that deliver the cars.

Is there no usage loophole created by interstate commerce? Aren't all these
laws local?

~~~
mendort
You can buy cars online in the US. And Tesla does sell its cars that way. This
is about whether Tesla is allowed to run Brick and Mortar stores in various
places in the US.

------
sylvinus
> How many of you would be willing to travel four hours each way just to look
> at one car?

When Tesla faces a ban in a state, they convert their stores to showrooms so
people would still be able to see the cars.

------
pizu
How about delivering Tesla cars straight to customer's doors? Amazon-shipping
style.

~~~
nnnnni
Imagine the size of _that_ drone! =-)

~~~
dm2
Drones are just helicopters or planes without pilots. There is nothing
requiring them to have multiple rotors or look like a quadrocopter.

Here is the existing unmanned heavy-lifter.

[http://en.wikipedia.org/wiki/Kaman_K-
MAX#Unmanned_remote_con...](http://en.wikipedia.org/wiki/Kaman_K-
MAX#Unmanned_remote_control_version)

Can carry 6,000 lbs and the cost of $1,000 per flight hour total isn't a
terrible price, it's far more expensive than just putting the vehicle on a
truck for delivery of course.

[http://www.lockheedmartin.com/us/products/kmax.html](http://www.lockheedmartin.com/us/products/kmax.html)

[https://www.youtube.com/watch?v=ukogay1TwAA](https://www.youtube.com/watch?v=ukogay1TwAA)

[https://www.youtube.com/watch?v=5qqUdfSRFXw](https://www.youtube.com/watch?v=5qqUdfSRFXw)

The way those rotors cross are insane.

The BlackHawk unmanned system has been in testing for several years also.

~~~
nnnnni
Oh, I didn't say/mean that it had to be a quadrocopter/multi-rotor vehicle...
I was just saying that it'd be a pretty large vehicle. While it's a cool idea,
I suspect that a lot of people would be very wary of something of that size
flying around their house/building without a human pilot onboard. It's
basically the "not in my backyard" syndrome.

------
tzaman
[https://www.youtube.com/watch?v=86pcTLJTvUw](https://www.youtube.com/watch?v=86pcTLJTvUw)
I think the comments below the video are pretty expressive how the consumers
feel about the topic. Never seen a video that has this much downvotes
(compared to upvotes) on YT.

------
possibilistic
Electric vehicles are huge here in Georgia. We have state tax breaks on the
purchase of EVs that make the vehicles effectively free [1] for many
commuters. Anecdotally, one of my coworkers just bought a leaf because of the
tax credit.

Guess who wants to stop the state EV tax credit bill? Shouldn't come as a
surprise that it's the same dealer lobby [2] mentioned in the Tesla article.

1\. [http://cleantechnica.com/2014/02/13/1-nissan-leaf-market-
atl...](http://cleantechnica.com/2014/02/13/1-nissan-leaf-market-atlanta-city-
risk-losing-secret-sauce/)

2\.
[http://m.bizjournals.com/atlanta/blog/atlantech/2014/02/bill...](http://m.bizjournals.com/atlanta/blog/atlantech/2014/02/bill-
threatens-to-unplug-gas-5k.html?page=all&r=full)

~~~
ctdonath
I'm one of those anecdotes. Between tax credit and gas savings it's free for a
2 year lease (tech is changing enough you don't want to keep one longer than
that; expect a glut of used LEAFs in a couple years). You need some cash flow
to make it happen, but net cost is $0.

------
cyanbane
Car dealerships and the three tier alcohol system seem so archaic and anti-
consumer, both amaze me in their longevity and the amount of money that must
be getting put into them to retain the hold.

------
Yardlink
Nobody seems to care about these laws until some high-profile company starts
breaking them. 10 years ago where was the outrage that GM wasn't allowed to
sell SUVs directly to customers? Where was the outrage that ordinary people
(ie creeps) weren't allowed to put a "taxi" sign on their car and start
picking up strangers at night for money?

~~~
cpwright
GM, Ford, Chrysler, Toyota, Honda, Nissan, et. al. have already accepted an
up-front fee in exchange for franchise agreements; so the franchise laws in
that case protect the initial investment of a franchisee.

There actually was some debate over selectively cancelling franchise contracts
during the GM and Chrysler bankruptcies.

------
programminggeek
The irony of a "free market economy" is that businesses are free to lobby the
government to get favorable rules and in large part they win. So, a successful
business will eventually create enough red tape that they rig the game so that
only they or other companies with enough money can compete.

------
slashnull
That's bizarre, why would they fill a _petition_ instead of litigating?

~~~
EliRivers
Filing a petition is the first step in a civil lawsuit. It _is_ litigation.

~~~
slashnull
Oh, whoops

------
pessimizer
They should just sell through an app, Uber-style. Then no local laws would
apply to them because internet. Rename the store the "showroom" and the
dealers into "comfort consultants."

------
rtpg
couldn't they just open another dealership right next to the old one?

~~~
malka
no, but they can open a show room. Where there would be computers that people
could use to order Tesla's online. Also, that would probably mean less money
for the state of Georgia, since the taxes would be paid in another state.

~~~
seanflyon
This depends upon how the court defines a car sale.

------
sidcool
Free market capitalism is only good as long as it serves your interests.

------
51Cards
What about setting up show-rooms everywhere so people can see the product, but
only sell online? Would that get around all these local dealership laws?

------
shrnky
<trolling>How is this any different than unions or other stupid government
regulations?</trolling>

------
chrismcb
What is the actual law that tesla is supposedly violating?

------
mariuolo
I thought it was the land of capitalism...

------
tsbardella2
rich people fightin about rich people stupid stuff

------
andmarios
Beware though kids, the reason you don't have start-ups in your country is
because you ask uber to follow your laws.

------
thathonkey
Oops accidentally clicked into the comments of an HN post regarding economics.
Nothing of value here.

