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Comment by juujian | Hacker News Reader

I'm kind of curious whether Elon personally has anything to do with that exception. It is pretty advantageous for him.

Florida situation aside (could be shady shit going on, would have to suss it out with some investigative work), other states that have allowed new automakers to sell direct have been provided the exemption because they don't have an existing dealer network they're competing with.

For legacy auto, the dealer network was a benefit (offloading local customer relationships, inventory, service) that is now an albatross they'll have to buy out. Just another combustion->EV transition disadvantage to incumbents (legacy auto dealers rely primarily on service revenue, and EVs require much less service overall). For example, GM had to buy out 150 Cadillac dealerships that did not want to pay for the costs involved to transition to EV products (~$200k/dealer). Ford is having problems with dealers drastically marking up their EV products with "market adjustment fees", discouraging uptake, and are attempting to twist dealership arms so they fall in line to compete against Tesla's no haggle pricing.

TLDR Interest alignment challenge.

https://www.autonews.com/dealers/car-dealer-automaker-tensio...

https://www.cnbc.com/2020/12/04/about-150-cadillac-dealers-t...

https://electrek.co/2022/09/14/ford-sets-new-dealers-require...

https://twitter.com/mrlevine/status/1373646122548301833

https://www.teslarati.com/ford-dealership-applies-69554-mark...

The past 2 or 3 years have been something of an anomaly, but before the supply chain shortages, you could often basically buy a car at a few hundred dollars above dealer cost. (There are often other dealer incentives that aren't necessarily reflected in the online cost numbers--but close enough.) Which is why dealerships tend to put the big sell on using them for your vehicle's service because that (and financing) is where the money is. If you give them a check, drive your car away, and never see them again, they don't make a lot in general.

Those days are over. Automakers realized they could juice profits by keeping supply constrained, and are doing so.

https://www.axios.com/2022/07/14/automakers-production-level...

https://www.businessinsider.com/automakers-low-inventory-max...

https://www.businessinsider.com/used-vehicle-prices-inventor...

Edit: used vehicle prices are held high by reduced new vehicle deal flow. The whole auto market is supply constrained, pushing aggregate prices up.

Your last link is about used car prices. And, yeah, when I bought a car last year I didn't even try to negotiate down from the sticker price, but I did manage to get them to add the price of "factory options" to my trade-in (which is advantageous from a tax perspective anyway)--for which I got a really good price to my way of thinking given age and some obvious body damage.

And why would we legally protect dealerships? Are we doing the same for McDonalds franchisees? Who is protecting the corner Wendys from being undercut by a mothership restaurant?

Historically, dealer franchise protection laws were enacted to protect local small business (dealerships) from the muscle of Big Auto.

https://futurist.law.umich.edu/preemptive-federal-legislatio...

These laws protect the consumer from a monopoly on sales and service from the manufacturer.

I wouldn’t be entirely surprised if incumbent automakers “spun off” EV divisions as “independent subsidiaries” to try to take advantage of these loopholes. I remember Ford was beginning to take steps towards and arrangement like that to reduce the power of local dealers. It’s a large fight though.

Elon is helping with DeSantis’ presidential campaign, so it seems almost certain.

Elon probably influenced the carve out, but the Ban is all Dealer Lobbying

Auto Dealers at the state level it one of the most, if not most powerful groups in state politics, as a huge part of most state revenues are derived from taxes on Auto Sales. it is by far the most expensive item most people purchase that is subject to sale taxation

I am kinda surprised they allowed for a carve at all.

DeSantis announced his presidential bid on Twitter, so I'd say there's a very strong connection.

I stop wondering a long time ago. It's more blatant than ever.

He owns Twitter. DeSantis announced his presidential bid on Twitter.

You can draw your own conclusions.

Would you really feel differently about any part of the situation if you found out he had nothing to do with it? He's still accepting the benefit of it and apparently not campaigning _against_ it.

"Will no one rid me of these meddlesome dealerships?!"

Tesla of course wanted direct distribution. Existing automakers lobbied against it. I guess each got what they requested, but only for themselves. It's sort of like a Judgement of Solomon response.

The two are political bedmates, there's no doubt about it.

1. Courted the left with green EV tech & solar

2. Courted the right with access to social media

3. Profit!

I remember when Tesla was an upstart underdog for whom I rooted.

I'll answer that for you: yes

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