back to article Elon Musk slams New Jersey governor over Tesla direct sales ban

Tesla Motors CEO Elon Musk has taken to the web to address the entire state of New Jersey about what he claims was a "backroom deal" to defeat his company's business model. Earlier this week, New Jersey became the third US state – after Arizona and Texas – to enact a rule banning auto manufacturers from selling cars directly …

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  1. gerdesj Silver badge

    Allow me to comment on another country's practices

    Does seem a bit dodgy - why should't they flog their motors directly?

    Here in the UK, you generally buy a car from err a franchised dealership but I'm pretty sure you could go to the manufacturer directly, who would probably point you to the nearest franchised dealership. However, I do know for a fact that I could go and see Arial and buy an Atom directly from them (I live in Somerset rather close to the Arial works)

    If you want to sell your house, you could do the usual thing and engage an estate agent (en_US:realtor) or you could put up your own "for sale" sign and advertise in the local rag.

    I could probably ring up Dyson and buy a hoo....err... vacuum cleaner.

    I don't think I can ring up Sony in Wales and get a Raspberry PI though. Hmmm

    So, in general, if you make stuff I think that you can and should be able to sell it direct to the consumer if you want to without having to subsidise middle-men unless they add value to the supply chain in your opinion (increase sales, take on support burden etc.) By the way I own a middleman business ...

    Now that is here. In the US it might be different. I've just dug out a few examples, I'd love to hear whether there are reall differences over there on how you can flog stuff. I'm pretty sure if I wanted a little something from the more expensive end of IBM's product list in the US I would be looked after by an IBMer directly.

    Now I think about it, are there any UK examples like this whereby a sort of artificial business model is protected like the auto dealers in the US?

    Cheers

    Jon

    PS I do understand this is not a federal thing - it's individual states being daft.

    1. Yet Another Anonymous coward Silver badge

      Re: Allow me to comment on another country's practices

      >Does seem a bit dodgy - why should't they flog their motors directly?

      Because then the poor consumer would be at the mercy of the evil car manufactures without having the services of honest car salesmen to protect their interests.

      1. gerdesj Silver badge

        Re: Allow me to comment on another country's practices

        Nasty, nasty manufacturers 8) I hope all your up voters noted wher your tongue was lodged ... oh and I missed a n in shouldn't.

        Anyway, I tried to buy a car recently and the Ford dealership around here (Yeovil) managed spectacularly to fail to do that simple job despite us trying our best to get them to do so. We were keen on the Fiesta - it won all the awards in the class of car we were interested in and we wanted to simply go on a test drive.

        They failed quite impressively in several areas: firstly they were closed on Sunday - me and the missus work for a living as do they but we have spare time at weekends and hence car floggers need to be available at weekends, all weekend unfortunately (they can always do shifts, that's what my company does); secondly the salesperson seemed incapable of noticing that the real customer was my wife and not me.

        I wont bore you any further but it would have been nice to be able to directly buy from Ford but I can't without the wiff being able to test out whether she's happy driving it.

        So how would Tesla manage that situation?

        Are they unable to open their own dealerships a la Ford et al in the UK (look: I got three languages in there, one extinct) - how does it work over there ?

        I've been to to the US a few times and their car flogging setup looks pretty similar to ours - what am I missing?

        Cheers

        Jon

        1. Yet Another Anonymous coward Silver badge

          Re: Allow me to comment on another country's practices

          >Are they unable to open their own dealerships a la Ford et al in the UK

          The car maker doesn't own the dealership.

          They sell the franchise to whatever local Arthur Daily wants to it. The customer then deals with the dealer, argues with them, gets their customer service, pays their servicing prices, and remembers the process as the face of the brand - it's like the difference in buying from an Apple store or Comet!

          The other problem with Tesla, and electric cars generally, is there is no servicing - so no profit for the dealer, so they only way the dealer would make money is if Tesla wholesale the cars at 40% discount.

          1. Kristian Walsh

            Re: Allow me to comment on another country's practices

            "The other problem with Tesla, and electric cars generally, is there is no servicing - so no profit for the dealer, so they only way the dealer would make money is if Tesla wholesale the cars at 40% discount."

            Um... you know that there's a lot more than the engine in an internal-combustion-engined car, right?

            And what about non-service items. If your Tesla's steering or suspension starts to play up. Where do you get it fixed? Your local Ford dealership? Good luck.

            There are two equal sides in this argument. A nearby dealer network is also of benefit to customers, just like a direct-sales model is of benefit as much (or more) to Tesla than its customers.

        2. Anonymous Coward
          Anonymous Coward

          Re: Allow me to comment on another country's practices

          "I wont bore you any further but it would have been nice to be able to directly buy from Ford but I can't without the wiff being able to test out whether she's happy driving it."

          You are a deadman.

          1. Muscleguy Silver badge

            Re: Allow me to comment on another country's practices

            Mrs Muscleguy used to refer to herself as a wff: well formed function. Back when she was doing CompSci and using a mainframe running VAX. I was expected to confirm that assessment you see.

            So if I were to refer to her online as such no trouble would ensue as it would just be a trip down computer memory lane.

        3. tom dial Silver badge

          Re: Allow me to comment on another country's practices

          Tesla has a couple of stores in New Jersey where you can look at, examine, arrange a test drive, and order.

          http://www.wired.com/business/2014/03/tesla-banned-ensure-process-buying-car-keeps-sucking/

          The New Jersey government is bending over (on their citizens' behalf) to good old fashioned rent seeking by the dealers' "guild".

          1. Eradicate all BB entrants

            Re: Allow me to comment on another country's practices

            It's not a practice limited to the US. In the UK Daewoo had the same problems in certain cities when trying to open their own dealerships.

            Don't worry US cousins, corruption is rife in UK councils too, especially in regards to planning permission for building.

        4. rh587 Silver badge

          Re: Allow me to comment on another country's practices

          I think they have delaerships (which are becoming galleries) - but it's their own network that they own. So you can go on a test drive, chat finance, etc, but you're dealing with a Tesla employee, not a Stratstone employee or Foray Motor Group for Yeovil Ford.

          Looks like a normal dealership, but run by the manufacturer.

        5. AbelSoul
          Trollface

          Re: I got three languages in there, one extinct..

          Not quite extinct; still showing some signs of life in your own post.

      2. Michael Habel Silver badge
        Trollface

        Re: Allow me to comment on another country's practices

        Because then the poor consumer would be at the mercy of the evil car manufactures without having the services of honest car salesmen to protect their interests.

        You forgot to use the Trollface....

      3. Philip Lewis
        Thumb Up

        Re: Allow me to comment on another country's practices

        50:0

        TheRegister Commentard sarcasm detection meter functioning perfectly today :)

    2. Gray
      Devil

      Re: Allow me to comment on another country's practices

      If you were from the U.S., or had been following our news reports over ... oh, say, the last half-century or so ... this "practice" would be crystal clear:

      State and municipal government in New Jersey is an open sewer of political corruption.

      In this particular instance, the NJ auto dealers alliance, having contributed about three-quarters million $US to the Governor's political war chest, were allowed to influence the Tesla question.

      Easy-peasy, simple, case closed.

    3. This post has been deleted by its author

      1. Anonymous Coward
        Anonymous Coward

        Re: Allow me to comment on another country's practices

        That's Ariel, the makers of the Atom

    4. Anonymous Coward
      Anonymous Coward

      Re: Allow me to comment on another country's practices

      If you're selling millions then letting customers buying from the manufacturer is a lot of work.

      But Tesla don't sell enough cars to warrant a dealership in every major city.

      I can visit an Apple store to buy a laptop, but I can also buy it online. Imagine if for some dubious reason you were only allowed to buy from a shop, how would that be useful in this day and age?

      The big companies are well known for dirty tricks. Which is why there's not been decent alternatives to the combustion engine.

    5. rh587 Silver badge

      Re: Allow me to comment on another country's practices

      "Here in the UK, you generally buy a car from err a franchised dealership but I'm pretty sure you could go to the manufacturer directly, who would probably point you to the nearest franchised dealership. However, I do know for a fact that I could go and see Arial and buy an Atom directly from them (I live in Somerset rather close to the Arial works)"

      My uncle went and visited his Morgan as it was being built. Took delivery at a Jan 1st champagne when the CEO handed him his keys personally!

    6. Anonymous Coward
      Anonymous Coward

      Re: Allow me to comment on another country's practices

      Don't forget, in the Uk we have the benefit of the Distance Selling Regs (aka the Try before you Buy law) and Section 74 credit card protection to protect consumers who buy direct. Those poor dinosaurs over in the Us don't have anything like this.

  2. Anonymous Coward
    Anonymous Coward

    "Unless they are referring to the mafia version of 'protection'"

    Love it. Go Musk, challenge the status quo! Haven't we learned from bank bailouts, rate fixing and auto maker bailouts that free markets are a total joke!

    ""The rationale given for the regulation change that requires auto companies to sell through dealers is that it ensures 'consumer protection,'" Musk railed in his missive. "If you believe this, Gov. Christie has a bridge closure he wants to sell you! Unless they are referring to the mafia version of 'protection,' this is obviously untrue.""

    1. SkippyBing

      Re: "Unless they are referring to the mafia version of 'protection'"

      'Haven't we learned from bank bailouts, rate fixing and auto maker bailouts that free markets are a total joke'. At least two of those aren't examples of free markets. In a free market the banks would have been allowed to fail allowing the banks that weren't run by a colony of inept monkeys to take over their share of the market, ditto the auto makers. Unfortunately we don't have a free market because that wouldn't allow politicians to look like they're doing something.

      1. Anonymous Coward
        Anonymous Coward

        Re: "Unless they are referring to the mafia version of 'protection'"

        > At least two of those aren't examples of free markets.

        Not to put words on someone else's mouth, but wasn't that the other poster's point in citing those as example of a supposedly "free" market?

    2. Don Jefe

      Re: "Unless they are referring to the mafia version of 'protection'"

      I will never, never understand why people make a business oriented comment, then turn right around and bemoan the lack of 'free markets'. It really highlights why their business comment can just be ignored. They're out of their depth.

      There has never been a 'free market'. There have been plenty of markets where one segment of the people in it are 'more free' than another, but no free markets. Ever.

      Being able to survive in an unbalanced, unfair environment is what defines any business that is in business (versus out of business). Product quality, customer satisfaction, employee contentment, supply chain and any profits are all secondary to being able to find a safe(ish) place to operate in a market. Nobody ever promised fair and 'cheating' successfully is as much of a part of business as anything else.

      You can't separate 'market conditions' from any other element of business, you can cut it or you can't. Saying 'it's not fair' is absolutely no different than buying a hot blooded horse for your kid, then bitching when it throws the kid off. Or buying a massively overpowered car and complaining because it is difficult to control.

      Most companies fail because they are incapable of playing on the screwed up, slanted field of business. It's a hard, and expensive lesson for a lot of people, but reality 'is' and you deal with it as it is, or you fail. Elon Musk knows this too, it's just another challenge to be dealt with. We'll see how well he deals with it. The US automobile market will be his very first, real business challenge. Everything else he's done has been novel, and that goes a long, long way. This is a traditional business matter and seeing how well he manages through it will be interesting.

      1. This post has been deleted by its author

  3. drone2903

    right idea

    Tesla's stores in the state would transition to being "galleries," where prospective buyers could learn about the vehicles but staff would be unable to complete sales or even discuss pricing.

    By doing so, customers who buy ( from an other state I suppose ) would not pay sales tax in NJ!

    Brillant!

    1. Voland's right hand Silver badge

      Re: right idea

      That does not quite work. The way the anti-consumer state authorized racket... err... dealer-only laws... work in the USA is that you cannot register a new car in the statet unless it is bought from a dealer. So in fact, no New Jersy customer will be able to register a new Tesla in New Jersy from now onwards.

    2. tom dial Silver badge

      Re: right idea

      If New Jersey is like a great many states, Tesla purchasers resident in New Jersey will pay the applicable sales tax in the purchase state unless they buy a transfer tag stipulating that they will remove the car to a different state within a limited period. In NJ they probably will pay a "use tax" when they register the car that, curiously, has the same rate as the sales tax.

      1. Don Jefe

        Re: right idea

        All 50 US States have 'Residence Restrictions' on new automobile sales. The customer will pay sales tax in their state of residence, in addition to a fee to the dealer for dealing with another states registration system.

        Additionally, dealerships here don't own their new car inventory, it is owned by the manufacturer and the dealer pays a floor plan maintenance fee every month the car is on their lot. Anyway, what all that means is the manufacturer sets all the sales/incentives and to protect dealer territories any given dealer can only sell a car w/incentives to customers residing in a predefined area. Live outside that area and you pay sticker. You can, sometimes, do dealer transfers but a whole bunch of people all have to agree.

        The US auto industry is, without a doubt, second only to freight rail for the power of its lobby. Wal-Mart tried to get into automobile sales in the late 90's. I wrote briefs for all three Congressional hearings on the matter. The auto industry said 'no', and that whole plan came to a screeching halt. Never to be mentioned again.

        Tesla's got a big mess of a challenge to deal with. You can sell new, custom, automobiles in all 50 States with a gallery license, that's what Lamborghini, Bugatti and Maybach do, but that screws everything else up. Banks won't do traditional financing for custom autos and insurance rates skyrocket because those cars aren't required to meet the same safety requirements.

        The Tesla cars are fairly cool and all, but they aren't really appealing to the traditional, high performance, car buyer who have different ways of paying for a car. It's going to be the upper middle class people that make, or break, Tesla, so traditional financing and reasonable insurance are going to be required. It'll be interesting to watch the solution (if found) and see how it goes.

    3. Starkadder

      Re: right idea

      Depends on the tax law. In California, for example, I have to pay the State of California (who need the money, bless them) the sales tax rate applicable to my home, or my business if it is a business purchase. I cannot escape this as I have to show the correct tax has been paid to get my tags for the vehicle.

  4. goldcd

    An excellent podcast

    from NPR's Planet Money (well worth subscribing to) details US car dealerships:

    http://www.npr.org/blogs/money/2013/02/12/171814201/episode-435-why-buying-a-car-is-so-awful

  5. Anonymous Coward
    Anonymous Coward

    He does have a point (for once)

    However this quote:

    "Also, all Tesla Model S vehicles are capable of over-the-air updates to upgrade the software, just like your phone or computer, so no visit to the service center is required for that either."

    Hardly helps his case it's not like over-the-air updates to phones work all the time, what's his suggestion when it bricks you $80K+ Tesla, stick three fingers in its power socket?

    1. Ydo Ibother

      Re: He does have a point (for once)

      Ctrl-Alt-Delete :-)

    2. Anonymous Coward
      Anonymous Coward

      Re: He does have a point (for once)

      Hardly helps his case it's not like over-the-air updates to phones work all the time, what's his suggestion when it bricks you $80K+ Tesla, stick three fingers in its power socket?

      How about a ROM-based fallback mode like I see in proper systems designed to take OTA updates? That way, if an OTA update fails, it goes into fallback mode and fixes the problem from there. I've seen it happen in assorted embedded systems and the like. The only time the device bricks is when it's an actual hardware fault.

      1. Anonymous Coward
        Anonymous Coward

        Re: He does have a point (for once)

        "How about a ROM-based fallback mode"

        Well, my old P4 based mobo has that. If the BIOS update fails for some reason, then it fails back. State of the art, right?

  6. Johnny Canuck

    Dealerships

    I thought the reason for dealerships rather than direct sales was to stop the manufacturers from dumping product below cost to drive out competition. Also, brand name dealerships will sell used models from different manufacturers that they took as trade-ins. In effect, its a protection for consumers in the long run. I may be wrong on my perceived reason for dealerships,but if I'm right then Tesla's push for their own "boutique" dealerships may actually harm consumers. Whats wrong with letting Tesla open up their own dealerships that also peddle other used models?

    1. Mark 85 Silver badge

      Re: Dealerships

      I thought the reason for dealerships rather than direct sales was to stop the manufacturers from dumping product below cost to drive out competition.

      err.. no. Dealerships were set up for the manufacturer's bottom line. They make the cars and sell them to the dealerships with a profit. They also sell parts to the dealerships with a profit. They also charge the dealerships a "franchise fee". If the dealer doesn't have the cash for his inventory, get a loan with interest from the manufacturer... guess who gets a profit. The maker saves the cost of the dealership... land, building, some liabilities, sales droiids, etc.

      The dealerships can charge what they think the local market will bear for the cars, the parts, and servicing as well as financing to the buyer and they make their profit there.

      So in Tesla's case, that $80,000 car will be more. Not sure how much more, but it will be. Also, Tesla looses control of the servicing and parts. In the States, dealers aren't required to buy many of their replacement parts from the automaker. They can sell, let's pick brake pads, from a lower cost supplier and sell them at the maker's price. More profit.

      And then there is the "image"... Is it better to buy from the maker at a set price? Or wheel and deal with a salesman who's going to make his money no matter what you do. I see nothing wrong with letting Tesla sell directly.

    2. Anonymous Coward
      Anonymous Coward

      Re: Dealerships

      In the US the function of the dealership is to maintain the apparent value of a second hand car at an artificially high level. Depreciation is deprecated. I bought my used car (made in the US) in the UK for half the cost of the same car with double the mileage and a lower specification in the US. The US used car market is totally rigged. Also most auctions are trade only, so a cartel exists. The bait and switch selling technique seems to be universal.

      1. The Stolly

        Re: Dealerships

        "In the US the function of the dealership is to maintain the apparent value of a second hand car at an artificially high level."

        It's pretty much the same here, Approved used BMW anyone?

        1. davenewman

          Re: Dealerships

          Actually, the approved used BMWs have only been used for 3 months by an employee at the Cowley works. They get free use of the car for 3 months, as long as they take it back spotless and unscratched. Then it counts as used, and can be sold as such. My neighbour is currently driving around a BMW Maxi with the word Mini on the bonnet.

          1. Don Jefe

            Re: Dealerships

            US auto dealerships are nothing more than the industry sales channel. They're the 'value added' reseller. That's it. My dad owned nine new car dealerships when I was younger, and screwing about on his lots was what drew me to engineering and away from the little empire my dad had built for me. It's an OK business, but I like the making more than the using.

            My point in telling you that, was that there's a huge misconception about what new auto dealers do and how they make their money. They don't own the cars, they pay the manufacturer a small monthly 'floor plan maintenance' fee for each car. Sales people are paid with the money from reaching the monthly volume targets the manufacturer sets. In 1995 a brand new Oldsmobile Cutlass Supreme, completely decked out with Southern Region standards (no block heater, fully vented transaxle, stuff like that, cars in other regions have different standards so the price varies considerably) sold for about $24,000. The dealership got $212 of that for the actual sale, at sticker. On an average credit score with 48 month note the dealership got about $800 from the bank financing the customer. Warranty service is paid by the manufacturer, but as a deduction from the floor plan overhead, so it generates no revenue. Non-warranty service and parts are good revenue generators. That year, 1995, was when I sold the last of the dealerships I had inherited. Prices suck even more now.

            The bulk of dealer money is made in the used auto side and fleet sales. Most people are ridiculously upside down when they trade cars and all that negative equity just gets added to the price of their new car, and their trade in is, effectively, the fee paid for rejiggering their financing. My friends and I made scads of money driving the trade ins to the auto auction twice a week. Just endless trips with six-eight cars, get in the van and go back for more (car hauling big truck trailers do more damage to cars than any other thing).

            With no incentives, making $2,000 over the entire warranty period of a new mid-$20k car is a fairly good figure. With a good used car that originally sold in that same mid-$20k range I can make $5-6k in the hour it takes to transfer the title and get it to the auction and I don't even have to wash it.

            Trade ins are where dealers get the money to send their kids to fancy schools. The customer always gets screwed, but that's the price of 'new car fever'. You're a fucking loon for trading a car in, but it's hard to sell them without a dealer involved. Banks and dealers have 'account performance' arrangements where the bank will finance a buyer sent by a dealer, but won't go nearly as far for a private seller.

            Anyway, dealerships are just resellers left over from a long ago time when it really was a long trip to get to another town and color pictures were only available on canvas. States got involved because car dealers were selling things they wouldn't service and other fairly awful behavior. Look at the regulations for getting a auto dealers license, every State has a law requiring any auto dealer to have a lighted public restroom, water and 'reasonably priced' snack foods available. Those universally shitty waiting rooms with horrid coffee, moldy water fountain and pre-Nixon vending machines are required by law, not placed there for your convenience. Post WWII it was a common trick to keep customers waiting for hours for minor warranty repairs and with no restroom (with a light!), water or food customers would just give up and go home.

            The lobby with accessories and zillions of other weird, archaic, non car related, laws are in place for dealerships and, truth be told, our society is a lot different than it was in the 1940's. The fact that people are willing to buy a car without actually driving the very one they might buy pretty much says it all. Everybody on your block used to come by and check out your new car. Today I'm nearly positive most people wouldn't even realize it was their neighbors car that ran them over.

            Dealerships serve an important function, but should no longer be a requisite to selling, or buying, a new car. If you want traditional treatment go to a traditional dealer. If you're comfortable buying a car 'online', then you should be able to do so.

  7. Anonymous Coward
    Anonymous Coward

    Touring California ? - pick up a Tesla

    Drive the famous 101, recharge at Big Sur then ship your car back to gray old NJ

  8. Anonymous Coward
    Anonymous Coward

    New traffic violation in NJ - Driving without a dealer

    $1000 fine

  9. Gene Cash Silver badge

    C'mon, it's Gov. Christie

    He's about as corrupt as they come. Also, this is true of Texas and a few other "fine" and "upstanding" states who don't allow Tesla direct sales either. They weren't as obvious about it though. Most people I know just bought their Tesla in another state. It's not like they're going to suddenly decide "oh, a Ford's good enough" - they want a Tesla.

    Florida doesn't allow test drives on motorcycles, so I bought my FJR & SV in Tennessee & North Carolina, where they do.

    The car dealers make it such a horror story to buy a car, and the auto "mechanics" (both dealer and non-dealer) make it such an incredible pain to keep that car running, that I've given up and ridden bikes for the past 10 years. Is it like that in the UK?

    A former roommate spent $3300 to have the mechanic replace every expensive electronic component in his Accord in the effort to track down a dead $5 relay.

    1. Kuddy

      Re: C'mon, it's Gov. Christie

      In the UK there's lots of independent mechanics in every town (good and bad) and so it's not a big deal. Since living in the US I've found there's too many Tuffy's and other big franchises more than willing to rip you off at every opportunity.

      The governor in NJ is obviously corrupt in this instance though.

    2. Don Jefe

      Re: C'mon, it's Gov. Christie @Gene

      You can't get on ballot in any state in the Mid-Atlantic region without being corrupt. That's a law. You've got to slip the clerk a $50 in the 'secret handshake' as the final hurdle to prove you're not going to be doing any of that nasty 'honest & upright' stuff. I do kind of wonder what they use for a 'grease his palms' substitute with Christie though. He looks like he would always have greasy hands.

      You're spot on about mechanics too. I honestly used to think a lot of mechanics were simply inept and had just fallen into a career that doesn't require any licensing or literacy, but after I got married it was plainly evident something was wrong with the moral compass in a lot of mechanics. My wife would get these enormous bills from the garage. Even though she only drives 2-3k miles annually she likes to get the oil changed every three months. But she always got new intake, fuel and cabin filters and all new coolant. The final straw was when they repacked the grease fittings on a car that I knew good and well didn't have serviceable joints. I've got the same car and they never even offered me a new cabin air filter... Wife and I have different last names, so I guess they never put it together.

      But here's what I don't understand, the guy who services our company vehicles has a garage that looks like one of those TV show garages. It's the cleanest automobile work area I've ever seen. He's fast, everything always works, he's expensive as hell, has a nice house and two kids at Georgetown as a single father. What I'm getting at is that you can obviously make a good life for yourself as a mechanic and you don't have to be all shady and shitty at it. Why don't we see more of that?

  10. Grumpy Fellow
    Meh

    Musk in salesman mode much?

    "There are no oil, spark plug or fuel filter changes, no tune-ups and no smog checks needed for an electric car," Musk wrote.

    This is literally true but a bit misleading:

    From the Tesla website it appears that they charge $600 per year for maintenance.

    My internal combustion Ford requires the following maintenance: Oil change, $25 every 7500 miles. Tune up (i.e. Spark Plugs) $100 every 100,000 miles. Fuel filter $50 every 100,000 miles, Smog checks never since OBD-II introduced in the mid 1990s.

    Mind you I'm not siding with New Jersey on this, but keep in mind that New Jersey law requires that your car be fueled by a professional petroleum transfer engineer (no self-serve allowed).

    1. Yet Another Anonymous coward Silver badge

      Re: Musk in salesman mode much?

      But that's the prices to get your Ford fixed at Halfords. The annual "keeping the warranty" main dealer service costs on a $90,000 sports car is a lot more than $600

    2. Anonymous Coward
      Anonymous Coward

      Re: Musk in salesman mode much?

      I looked up in the New Jersey dictionary and it advises that a "professional petroleum transfer engineer" is a minimum wage employee or even less expensive illegal alien. Who knew?

      1. MacGyver

        "professional petroleum transfer engineer"

        FYI, those are still REQUIRED in Oregon to pump your gas, you are not allow to do it yourself.

    3. Anonymous Coward
      Anonymous Coward

      Re: Musk in salesman mode much?

      > New Jersey law requires that your car be fueled by a professional petroleum transfer engineer

      Would that be someone with a geophysics engineering degree and a master on industrial safety?

      I suspect not. :)

  11. Anonymous Coward
    Anonymous Coward

    IMO, Elon is a huckster

    He talks a lot of shitze and is hyper sensitive about his defective products that burn to the ground. When a manufacturer sells direct to end users they have a financial advantage over a franchisee and they take sales from these franchises. Some states believe this is wrong and I tend to agree with them.

    1. Voland's right hand Silver badge

      Re: IMO, Elon is a huckster

      I agree with you provided that the manufacturer wants to have franchisees in the first place. Elon does not.

    2. Anonymous Coward
      Anonymous Coward

      Re: IMO, Elon is a huckster

      By that logic it should be illegal to sell -anything- directly. Hell, by only having franchises rather than a franchise to sell to the franchises you're taking money from potential franchises of franchises! I say that we require manufacturers to sell to a network of franchises which each sell to another network of franchises which sell to thr consumer. It's for their PROTECTION!

      1. Yet Another Anonymous coward Silver badge

        Re: IMO, Elon is a huckster

        If Apple contributed as much to the gov of California as the dealers do in Jersey, only Apple would be allowed to sell computers.

    3. Don Jefe

      Re: IMO, Elon is a huckster

      I've sold everything from cars and home theater to machine control equipment and now bespoke manufacturing equipment and 'stuff'. Never, not one time has someone else's 'financial' advantage stopped me, or my employers, from making lots of money.

      Seven years ago Lockheed got tired of losing jobs to me and came at me full force. A year later I bought their machines and tooling when they still couldn't touch me. Lockheed's revenue for a few weeks exceeds what my company makes in a year.

      The crocodile tears of the loser who blames money for their lack of success and/or stability mean nothing to me. If somebody's got a better way then that's your problem. Fix it your damn self. If you can't beat them be content with 2nd place or find a new career. If all you need to compete is money you're fucking doomed anyway. Buy some bourbon instead of blowing your money on something outside your capacity to cope with.

      1. Anonymous Coward
        Anonymous Coward

        Re: IMO, Elon is a huckster

        What article are you referring to Don Jefe.

  12. heenow

    In New Jersey, you can go to store.apple.com and order anything they make, and even customize it or add options. Why should Tesla be any different?

  13. Longrod_von_Hugendong
    FAIL

    That really does smack...

    Of back room deals, there is no point in it except to prevent him from selling stuff.

  14. Eguro
    Alert

    Ladies and Gentleman! The 45th president of these United States

    Chris Christie!

    Wooooh - Wuuuuh! YEAH!

    1. John Smith 19 Gold badge
      Joke

      Re: Ladies and Gentleman! The 45th president of these United States

      " Ladies and Gentleman! The 45th president of these United States

      Chris Christie!"

      Possibly the best damm president that money can buy.

  15. Ross K
    Devil

    The "Free" Market, Eh?

    Just reading about this on Wired.

    Traditional dealers don't want to see the erosion of the after-sales "service" revenue, such as oil changes, etc.

    Telsa apparently presents a future where cars can diagnose their own problems, and download software patches as necessary. A mechanic, sorry - technician, who scratches his arse and says "hmm, it'll take a few days to get that part" doesn't appear to figure in this plan.

    1. Yet Another Anonymous coward Silver badge

      Re: The "Free" Market, Eh?

      There is something different about driving in the US/Canada which requires the oil to be changed every 4000mi. It doesn't matter if you are driving a Chevy or a Maybach - the same car that needs an oil change every 2 years in europe needs one every 2 months in the US. Doesn't matter if you are driving in Alaska or Texas - 4000miles.

      To keep the warranty these need to be done at a dealer. With a special discount - if I prepaid the first three years of services - this came to about 10% of the price of the car/year. On a mid range Japanese saloon with the best reliability record in the business.

      With an electric car there is no smog tests, no oil changes,with regenerative braking the brakes last for years and when something goes wrong the smartphone app tells you exactly what and how much it should cost.

      1. tom dial Silver badge

        Re: The "Free" Market, Eh?

        The actual need for oil change depends greatly on the way the car is driven. City stop and go short trips pollute the oil rather quickly with harmful combustion byproducts; long distance highway trips at high speed contaminate less but may break down the oil more quickly. The type of oil used also has effects. My car (Honda S-2000) advises me when it needs an oil change. The notification appears to be based on a combination of mileage and type of driving, and possibly other factors. The computing capacity of modern automobiles along with the variety of information available on which to compute would allow for fairly sophisticated algorithms.

        Most manufacturers do not require maintenance work to be done by a dealer to maintain in-warranty status, although for some failures they might require you to show that appropriate scheduled maintenance was done. That said, for a new car, the dealer may be more likely to have applicable maintenance bulletins, and I have not noted them to be enormously more expensive than independents (Salt Lake City, UT, USA).

        1. This post has been deleted by its author

    2. Anonymous Coward
      Anonymous Coward

      Re: The "Free" Market, Eh?

      I will be delighted to see how a leak in a brake line, or a failed power transistor in an inverter, will be fixed by a software update.

      1. Anonymous Coward
        Anonymous Coward

        Re: The "Free" Market, Eh?

        Well, with clippy-like AI, they can certainly diagnose it. "It looks like you're about to collide with a bridge abutment. Would you like to start the braking system troubleshooting wizard?"...

  16. bed

    (Most?) car purchases are trade-ins, replacing the old with the new, which is where the franchises have a role to play. You could, of course, sell your car on gumtree, ebay, local rag etc., then buy a new one from wherever you like and get it shipped to the door - well you can in the UK. Denying the latter option strikes me as being anti-competative.

  17. Alan Esworthy
    Meh

    Musk credibility own goal

    I greatly admire Elon Musk -- and wish he had better judgment. On the one hand, he decries as unwarranted govt intervention in the marketplace when NJ mandates dealership franchise sales. On the other hand, Tesla and SpaceX both make out very well indeed from govt intervention in the marketplace.

    1. Anonymous Coward
      Anonymous Coward

      Re: Musk credibility own goal

      I don't see the inconsistency.

      Musk wants to introduce new technology and new business models. Because vested interests in the US are very powerful, State intervention and pump priming are needed to make this possible. It makes no difference whether the obstructive vested interests are the car industry or its bought legislation.

      US car makers have in the past enjoyed huge subsidies, and have been able (for instance) to keep fuel taxes low and resist rapid changes in gas mileage legislation. Musk thinks it reasonable that electric cars should enjoy some of the same special treatment. It is. He thinks the industry should not be allowed to buy legislation to keep out new products. It is.

  18. Hagglefoot
    Big Brother

    Think of the people

    Well its because the entire franchise model would mean that the money from the franchise to the manufacturer would dry up as would the tax, then the money from the from the reseller would dry up, so would the tax, then the money from the buyer to the reseller would dry up and so would the tax, Not forgetting the leases and and rents and again of course taxes. Get the picture if they sold direct not only would the taxes dry up but so would the army of jobs provided by the marker uppers.

    And woe betide the losses the councils would face and the cleaning jobs that would go and the sales ticket printers etc etc and of course all the tax. So yes he will get banned from denying everyone their cut.

    1. Anonymous Coward
      Anonymous Coward

      Re: Think of the people

      If the manufacturers sold direct, they would still need showrooms, bodyshops and service operations. The difference is that the manufacturer would have to assume the financial risk, which is why the manufacturers like the franchise syste,; you can get some mug with money to slave to make a profit for you without your risking your own cash.

      With our local Toyota garage I doubt that anything significant would change if it was owned by Toyota. How many people are really going to buy a car online and have it delivered - especially second hand?

      One would think that Tesla merely needed to announce that their existing outlets were franchises, find a NJ based nominee to be the director, make him an interest free loan to take on the assets (with suitable reversion clauses) and get a PI to do some more digging in Christie's email records. Obviously there is some subtlety of NJ law here that I've missed, possibly involving the traditional guys with Thomsons.

      Anybody who sees Christie in action or reads the reports about him might wonder how anybody sane would vote for him - he may be perfectly sane but he doesn't behave it. That's the real mystery - not that the world is full of corrupt politicians who can be bought by racketeers, but that the general public can be found to vote for them just because they have the right label.

      1. MacGyver

        Re: if it was owned by Toyota

        The owner "Big Tex" would simply be called Jeff Smith again, and instead of Jeff taking all the risk and keeping all of the profits, Toyota would be taking the risk, keeping the lion's share of any profits and Jeff would make salary.

        I completely agree, The only thing New Jersey loses with Telsa selling directly to the customers is that the "Big Tex"s of the state might feel the pinch (from them not being able to pinch us all in a barrel anymore).

    2. MrDamage

      Re: Think of the people

      So, give us one good reason why Apple is allowed to sell direct, and Tesla aren't? According to your logic, with Apple selling direct to the consumer, a horde of taxes have vanished due to the standard supply chain being broken by Apples direct-to-punter sales tactics.

      There is no difference, apart from the fact that Walmart, Best Buy and all the other resellers didn't lobby their purchased official to prevent competition to their bloated and easily capsized business model.

    3. J__M__M

      Re: Think of the people

      I take it you haven't licensed an out of state car lately. It's just slightly cheaper and less trouble than buying a new one.

  19. JLV

    Car dealerships (and Christie) suck.

    Between this and his bridges Gov Christie would have just lost my vote if I lived in the "Garden State" (hah).

    For the life of me, I cannot understand why an individual is not entitled to buy the car he wants from who he wants as long as the seller is both qualified and the legal owner of the car before selling it on. Well, aside from back room lobbying and generous campaign donations that is.

    Franchises are best thought of as an unnecessary evil. I hate the whole "list price vs actual price if you haggle" part of them.

    With new cars, despite sucking at haggling, my trick is to first decide the exact model I want. Then walk in into 6-7 dealerships with the following speech.

    "I intend to buy a new car of model X within 6-8 weeks. Not today. No trade in. Purely on price, and we know list price is not the real price. Quote me your best price you feel comfortable with now. If I like you and it's a good price, but not even necessarily the very lowest, I will come back to buy from you.

    If you make it difficult, give me a song & dance about not being able to quote, fixed prices, having to commit now, or anything else ... well there are 10 other dealerships in this area selling this exact model."

    The key is to make it very clear to each dealer that you don't have to buy from them. Very minimal hassle in general and I've gotten >$500 discounts despite Hondas not being a big discount brand hereabouts. I've also been amused at high pressure sales tactics - truly, truly bloodsuckers.

    p.s. Oh, and don't service at the dealerships if you can avoid it. They cost more, don't do a great job in general & use entry level mechanics as labor. Find a well-reviewed independent mechanic who makes a living only from doing car maintenance & get your oil changes done @ Mr Lube for the rest.

    1. Anonymous Coward
      Anonymous Coward

      Re: Car dealerships (and Christie) suck.

      That's what I did, first I walked into a dealer, discussed the model then asked for his best price, he went away and took AGES talking with the manager, then gave a paltry discount...

      He was an arse as well...

      Instead I called a few dealers (which were all about 200 miles away) told them the spec, said I wanted his best price, and he called me back with a price MUCH lower than I expected...

      Although I disagree with servicing, get the main dealers to service yearly, they know the cars best (well if your spending £50k on a car, saving £10-£50 a year on servicing is pretty pointless, although I do usually get the 3 years servicing up front..)

  20. Kevin McMurtrie Silver badge
    Mushroom

    The power says you're getting screwed

    Dealerships have, in my experience, always been the most corrupt places of business in town. Who else would lie about prices, lie about availability of cars, and lie about options during a sale and get away with it? Who else can lie about your car being fine when it's under warranty but then lie about needing extensive repairs at 10x a normal rate when it's out? Now it's clear that all of that lying makes them enough money to buy the Governor of a state.

  21. john devoy

    It's not a great mystery, the people running the dealerships will have bought off the required politicians needed to protect their businesses.

  22. scrubber

    land of the free

    Home of the brave.

    Capitalist country my ass. Corporate reacharounds are de rigeur.

  23. Anonymous Coward
    Anonymous Coward

    A few points

    Firstly, I live in NJ. I live in an affluent area. There is a Tesla store in an upscale mall nearby. Being in NJ, I commute and drive around a fair bit. The number of Tesla's I have seen on the road in the last 10 years (since Tesla was formed) is a whopping 5. Their vehicles are expensive, and even for the rich people in my area, I don't know of anyone who owns one. I don't see how the car dealers could possibly claim that Tesla is causing them harm with its own sales... 99.9% of the cars around here are dealer cars anyway. Doesn't make a lick of sense to me.

    1. Oninoshiko

      Re: A few points

      The concern is long-term. Tesla's prices are only going to go down, while inflation will also make them even less painful. I'd say by the time they fall to around 40kUSD, the costs of the rest of the market will have approached them. Then they are competing head-to-head, and with some emissions taxes and fuel costs/taxes, you'll see a sharp rise in the number of them.

      That's what everyone is afraid of. All Tesla has to do is keep decreasing his production costs, increasing his economics of scale, and keep his company in the black (or at least keep the red low enough) and it may be a matter of time.

  24. Anonymous Coward
    Anonymous Coward

    Ariel, Caterham, Westfield, Nobel, Morgan.... all fine, British, direct-from-the-manufacturer automocars.

    I'm not that surprised that backroom deals make US laws, NJ is home of the Sopranos after all.

  25. John Smith 19 Gold badge
    Unhappy

    There's an old story about New Jersey.

    A fellow running for Mayor of one of the towns was asked why he turned down a nomination for Senator to Washington.

    "I can make more money as Mayor here" he is reputed to have said.

    'Nuff said?

  26. Anonymous Coward
    Anonymous Coward

    Dealerships are necessary - fact, fiction, or just plain dumb

    Something tells me that even the big three over here in the USA would welcome internet sales for electric and gasoline cars. Right now electic cars such as the relatively affordable Chevy Spark EV are limited to California and Oregon. If internet sales were allowed GM, could if they wanted to, sell this EV to residents like myself who might want to drive an electric car , with ~400 lb-ft of torque and the size of a mini, to and from work, the golf course, etc.

    By the way, Tesla Motor quotes the price of the Model S with the $7500 tax credit included. The cheapest model is $63,750 without the much vaunted supercharger hookup. The price for the Chevy Spark EV is $19,185 with the above mentioned rebate. Of course the Model S's range is 208 versus 82, but hey I could afford the Chevy Spark. I cannot afford Elon's pipe dream or any $60,000 car for that matter.

  27. Stevie Silver badge

    Bah!

    I doubt anyone could drive a car with the ground clearance of a Tesla on the roads of New Jersey anyway.

    1. Anonymous Coward
      Anonymous Coward

      Re: Bah!

      Stevie, I don't think we are talking about the Lotus/Tesla, but rather the saloon vehicle sold n the USA.

  28. Anonymous Coward
    Anonymous Coward

    Have we forgotten Bristol? Now where else would I acquire a brand spanking new Blenheim then in their showroom on High St. Ken?!

    Apple store ring any bells? Wouldn't it be nice if Musk asked the same NJ Governor to ban sales of Apple products through Apple stores (laws equal for everybody?), how long would it take to change laws then?

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