
How Tesla's Fight With Car Dealers Could Help Decide the Next President - xmpir
http://www.wired.com/business/2014/03/teslas-fight-car-dealers-help-decide-next-president/
======
hnnewguy
Not much.

First, don't underestimate the power of the auto companies along with their
associated labour. There are many votes there.

Second, most of the country has no clue who or what Tesla is, and as an
"issue" it's the least of their concern. They want jobs, a good economy,
sometimes to know whether the president believes in god, and other things.
Whether rich people can buy their expensive cars in New Jersey isn't a
priority, and that's how this story can be sold.

These laws will fall, eventually, because they're stupid.

> _Few capitalists today embody the Ayn Randian entrepreneur-as-hero persona
> quite as convincingly as Tesla CEO Elon Musk_

I don't think John Galt would have taken government subsidies.

 _Edit: replaced "No it won't" with "Not much", since I'm sure there will be
some sort of effect._

~~~
rayiner
Also, Space X not only stands on the shoulders of giants at NASA, who were all
publicly funded, but half of its funding has come from NASA pre-payments on
launch contracts. Musk is a great example of the current American approach to
R&D working: use public funding and subsidies to get technology off the
ground, then transition to the private sector once it attains a certain level
of maturity.

~~~
sp332
I thought that was the point of the subsidies? It's not like the subsidies
were designed to exist forever. They're just to accelerate the development of
tech that isn't yet economical.

~~~
saosebastiao
Elon is quite the anomaly though. Most businesses will take your subsidy and
turn it into a self-perpetuating leech as opposed to a business.

~~~
gamblor956
SpaceX is not an anomaly; most businesses that take subsidies for new industry
markets either fail or go on to become successful companies. We simply hear
about SpaceX more on HN because of Elon's relationship to tech, whereas most
similarly situated companies don't have that name brand connection or are in
fields that most HNers know nothing about.

------
protomyth
From the article's first paragraph:

    
    
      Mitt Romney famously called Tesla Motors a “loser” company during
      his run for president. He lost, of course, and Tesla is by any
      measure winning. And so we see would-be presidential candidates
      lining up behind the Silicon Valley carmaker as its fight against
      auto dealers becomes a potential breakout issue in the 2016 election.
    

I would say this sums up Wired's expertise on politics. I doubt there was more
than a handful of people outside the valley who cared about this statement.
This statement had a net zero on the election.

~~~
visakanv
Tesla fan here, but I'm with you on this. "Mitt Romney famously called Tesla
Motors a “loser” company" \- what is the measure of "famous" here? Because I
had no idea he said that. And I bet if I ask 100 other Tesla fans about what
Romney said about Tesla, they wouldn't know, either. Let alone laypersons.
This is kinda... paint-the-target-around-the-arrows journalism to me.

~~~
protomyth
Here is a link to the actual video from which the quote is derived:
[https://www.youtube.com/watch?v=lGwTh-
xXoQc](https://www.youtube.com/watch?v=lGwTh-xXoQc)

Note the "I had a friend" and what the other companies mentioned are. The
"quote" is like most political quotes, not a literal[1] quote.

1) used in the true definition and not ironically, which probably has a
relation to talking about political quotes

[edit: to go even further, it sounds like he was referring to loss of money as
losers. Someone might check if Tesla was profitable at the time]

~~~
visakanv
neat, thanks for sharing

------
danielweber
This article seems weak sauce.

Romney opposed Tesla, but that was because the President supported it.
Presidential challengers, regardless of their views, _always_ say that the
incumbent President's policies are wrong. They have to give the public a
reason to vote for them. You do that by creating contrasts in the public's
mind between you and the incumbent.

If Obama hadn't supported Tesla, Romney would have. It's not because Romney is
especially corrupt or venal or cynical. It's simply because that's how you try
to unseat an incumbent.

When was the last time in a Presidential debate that one guy said "yeah, my
opponent is right, and I would do things the same way"?

~~~
streptomycin
_When was the last time in a Presidential debate that one guy said "yeah, my
opponent is right, and I would do things the same way"?_

Most of the foreign policy debate in 2012 between Romney and Obama, except
when they were playing pedantics about who said what when.

------
louhike
"Today the bans on Tesla stores are such a naked example of stifling
innovative competition to protect an incumbent industry’s business model that
they look positively French."

This remark is stupid regarding how much money the US government spent to
protect companies like General Motors. I'm not saying it was a bad thing, just
that this remark was too easy.

~~~
Totoradio
Even funnier, there is a Tesla store 500m from where I sit. In Gennevilliers,
France.

------
kertof
I think the fight that Tesla got into is rather an other example of
businesses, the car dealers, that exist solely because of legal restriction
allowing them to exist, not because there is a market need. The added value of
car dealers is extremely limited, and is rather an archaic leftover of
previous times. Fighting for these business models is I believe completely
ridiculous. It's like fighting for the CD industry or the Print/Paper
industry.

------
mathattack
My inclination is that it shows whose pockets the politicians are in. If you
think they're a "loser" then you are pandering to Detroit and their unions, or
the auto dealers. If you aren't in their pockets, it's easy to see why the
direct model is preferable. It's hard to be called a small government
conservative if you want to legally mandate middlemen.

------
cafard
The notion that Chris Christie could under conceivable circumstances win the
Republican nomination--let's forget Fort Lee, pretend it never happened here--
is plausible only to persons within Christie's reality distortion field.
Romney wouldn't pick him to run as VP, because of concerns his staff had about
the baggage he brought.

~~~
HistoryInAction
Up until the bridge scandal was proven to have legs (several months after it
broke, mind you), Christie was winning the pre-primary money/fundraising race.
He had solid inroads to both the Bush and Romney machines (aka traditional
GOP) and had proven his chops at cutting decent social media-friendly video
clips, even if not to our level of virality optimization.

I called him the front-runner at the time—I ran data for his '09 election re:
potential biases—and even now, he's still got a fair chance at securing the
nomination. If he can survive (or not compete in) IA and win NH (with no
Romney or McCain figure, Christie's NE Republicanism and brash nature might
appeal to the Granite State), he'll have the money to power through FL and
make a play for locking things up on Super Tuesday.

~~~
protomyth
"Up until the bridge scandal was proven to have legs"

Christie has no shot of winning Iowa, maybe he can squeak by in New Hampshire,
and he will get trounced after that for a bit. He is not liked by the rank and
file Republicans.

MartinCron said it best
[https://news.ycombinator.com/item?id=7401536](https://news.ycombinator.com/item?id=7401536)
"Yeah, he was always a leading favorite Republican candidate among non-
Republicans."

~~~
jbooth
So was Romney, all of those things. Not that I think Christie's going
anywhere.

~~~
protomyth
Romney was blah, not divisive in the primaries.

------
conductr
At first I thought this was a brilliant idea. Fight the stupid laws of the
past; I'm on board.

However, as a casual follower, I haven't been convinced the problem is that
big. Does a franchisee add a large markup? More that Tesla would already
assume by opening their own stores? Maybe they want to control the customer
experience?

Personally, I'd be happy to be a franchisee and only charge $100 per car sold.
Because I believe these cars sell themselves. No negotiations, everyone pays
MSRP seems to be the Tesla model and, I like that. I won't need a hoard of
sales staff. Tesla can dictate/measure my customer service practices.

I won't carry a big inventory, I'd probably do setups similar to the Tesla
shop in the Houston Galleria. Only a few models so people can see and feel the
car, do test drives, then the order is placed with the factory. This is the
part that is broken with the car industry. Dealers pre-order inventory then
try to sell you the stuff they have on the lot. They all have "build your car"
tools on the website, but consumers rarely get the opportunity to buy exactly
the car they want.

I might not know the full scope of what is required of an auto franchisee. The
costs and what-not. But, if Tesla where to give me a market and the rules
which to operate. I'd gladly partner with them and provide a high level
service at a negligible middle-man fee. I think many other people would too.

So why does this need so much disrupting? I'm starting to think, because there
is an opportunity to disrupt is the right answer. This topic is generating a
lot of buzz. Politicians are talking about it. Just look at the headline of
this post, seriously... Tesla is pushing this to be a presidential candidate
talking point? That type of PR would be priceless.

~~~
plainketchup
The problem (from Tesla's perspective) with giving you a franchise is that the
current franchise laws make it effectively impossible to take back that
franchise, short of going to bankruptcy court. There are some truly awful
dealerships out there, but Chevrolet had a hard time closing bad ones, even
_with_ the help of a bankruptcy court. Maybe you'd do an better job than Tesla
of holding the customers' hand through the process of their first electric car
purchase, but maybe in five years you'll decide there's more profit in high-
pressure sales techniques. The cows have already left the barn at that point
and there is nothing Tesla can do to stop you (so your promise to only take a
$100 commission on each sale is worthless).

You seem skeptical that dealerships are adding a large markup. Maybe that's
true, but then why are the dealer's so adamant that Tesla only be allowed to
sell cars through franchise operations? The dealers have nothing to worry
about if you're right. It's not as if Tesla is taking away a current
franchise. They're simply not franchising in the first place.

~~~
conductr
You make good point on longevity of the relationship. I figured tesla could
solve this with the right contracts when they did setup a dealer. That might
not be the case.

I not skeptical and believe dealers do add costs. Significant probably. I
don't have the data to know to what degree. I'm just suggesting tesla scrap
the current dealers and build their own network with its own set of rules and
economics. There may be valid reasons that is a bad idea, but i would be glad
to be a part of it

------
danvoell
I run a startup in an entrenched industry. I see how many layers (fees,
licenses, time for approvals) of bureaucracy have been created by lobbyists in
favor of the oligopoly which controls my industry.

On the micro level, sure most people don't know the Tesla story. On the macro
level, people are sick of government entitlement and lobbying. If the Tesla
story most simply articulates the fact that companies are lobbying government
to stand in the way of progress in the name of their cash cow, I think it
definitely has the power to help shape the election.

------
wil421
I hope the next president focuses on more important things than Tesla.

Anyway this seems to be a battle at the state level I dont really know if the
Federal Govt should get involved.

What exactly was the legal reason for the ban in NJ?

~~~
Jtsummers
> What exactly was the legal reason for the ban in NJ?

A long ago decision that car manufacturers couldn't run their own
franchises/dealerships. Tesla's stores in NJ were either provisional ("We'll
allow it for now, but we may take it back later") or a goof (some articles
suggested one, others suggested the other). By law, they shouldn't have been
selling directly in NJ (note: I think it's a dumb law), the controversy is
that the deal was supposed to be determined by the legislature. Christie went
back on his word and made the decision before the legislature could get around
to it. Now, the legislature could still change the law to make the stores
legal (at which point they'd be able to sell again, right now they're going to
become galleries, showrooms).

~~~
wil421
Basically politics and lobbying parties. (Auto Dealer Associations)

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ycaspirant
>"Of course, to suggest that opposing Tesla violates GOP principles is to
assume that politicians are principled at all. More realistically, the
politics of the Tesla bans reflect nothing so much as the truism that all
politics are local."

\-----

I think this is the crucial observation of this article and should be the key
take home message. Of course the GOP will claim to champion principles such as
innovation, free enterprise, individual choice, etc. but in practice they're
ultimately going to pander to their local voter base and its special interest
groups.

~~~
jamesie
Building on that I want reporters to ask Christie, "When did you stop
believing in American innovation, free enterprise and individual choice?"

------
jamesie
Elon Musk is an immigrant, environmentalist, scientifically minded and an
entrepreneur. The GOP have to let go of their opposition to the first three
and embrace the last even if it's a french word.

