Cybertruck buyers forbidden from selling for the first year | Hacker News Reader

Cybertruck buyers forbidden from selling for the first year

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85 pointsLeoPanthera121 comments

Huh, interesting. I feel like there are three parts to this:

- You can't sell unless Tesla agrees you can, this seems unreasonable.

- Tesla has a sort of right of first refusal on sales, at a pre-defined selling price, this seems like an interesting/reasonable attempt at preventing scalping.

- The defined selling price is your purchase price less $0.25/mile, less wear and tear, less cost to repair the vehicle to "Tesla's Used Vehicle Cosmetic and Mechanical Standards". This seems to be unreasonably double dipping on deprecation.

There's a fourth part:

"If Tesla declines to purchase your Vehicle, you may then resell your Vehicle to a third party only after receiving written consent from Tesla."

You are simply not allowed to sell the vehicle you "purchased" from them without their permission.

That's literally the first part of the description you responded to, not an additional fourth part.

There are four acts to the clause. It says first that you can't sell it, however, if you do want to sell it, Tesla has right of first refusal, but then the right of first refusal turns into a prohibition on sale again at the end.

This is another situation where you can put anything you want in a contract, even if it is blatantly unenforceable. This is why contracts have severability clauses.

There's no legal recourse for them but they can 100% prevent you from buying a new Tesla ever again.

That’s fine. I would never buy one in the first place

> they can 100% prevent you from buying a new Tesla ever again.

Probably in the US. In some other countries, it's illegal to refuse a sale, if you're a store (online or offline). A buyer comes, a sale happens.

Yeah, in the US you can be refused service unless you're protected class.

I sincerely hope that the US will eventually recognize that everyone is a protected class. :)

"Protected class" is a somewhat misleading phrase: the rule is that there are certain characteristics that you cannot legally discriminate on the basis of, not certain groups of people that are protected and some that aren't (at least mostly).

Race, religion, national origin, sex, these all apply regardless of which specific group you're in under that banner. There are a few categories which are really only defined as applying to "one side", but they're generally not controversial (the laws against pregnancy discrimination, for example). Age is the one big outlier: the law against age discrimination in employment applies only to people over 40.

In other words it's a blueprint for discrimination: you can't fire someone because he is homosexual, instead you fire him for the colour of his hair. It's nuts.

> you can't fire someone because he is homosexual, instead you fire him for the colour of his hair

No judge in the developed world would believe such a contrived excuse.

It's weird how people think this sort of thing is actually a valid defense.

In the real world you just find pretexts to fire people, and the laws are written to permit such outs. Your trust in the legal system is touching. (And then there's that Hewlett-Packard class ageism class action that was settled for 18 millions. Is that one or two days of profits?)

because the real world is complicated.

How can I tell that person is an asshole who meant to hurt my feelings vs that person who just said a stupid thing without thinking about it?

I can't, so the reality is that some subset of people are going to get away with hurting my feelings on purpose. The alternative is that people who make mistakes get punished unnecessarily.

Which side of that would you rather the law be on?

Everyone is equal, but some people are more equal than others.

In the interim I wish they would stop beating around the bush and simply call it "not a straight White cis man". It's far fewer words with the exact same meaning as listing all the things that are 'protected', and has an air of honesty about it.

> In the interim I wish they would stop beating around the bush and simply call it "not a straight White cis man".

That's not what "protected class" means, in any of the contexts in which it is used (employment, public accommodation, housing, etc.)

To the extent it seems like it means that, that's only because, well, the historically privileged are more likely to be in a position to discriminate in favor of those like themselves.

In each of those contexts, race (not "being non-white") is a protected class; it is just as illegal to discriminate against White people in any of those contexts as it is to discriminate in favor of White people.

For each of the other descriptors which actually relates to a protected class, it works the same way where it does.

> It's far fewer words with the exact same meaning as listing all the things that are 'protected', and has an air of honesty about it.

It doesn't have the exact same meaning at all.

Yeah, rich assholes have really been missing out, they're so crippled by their lack of empathy and unfair inheritance of wealth and position, people should understand how hard they've had it.

No. You can still be refused service if you're a protected class.

It just can't be the only reason.

I would expect it can’t be part of the reason, otherwise things like “we don’t sell to women on weekdays” would be legal.

the entire reason would still be that they're a woman.

you can't refuse service to _any_ protected class on the weekends because ... you can't refuse service to protected classes for being in that protected class.

Guess you could do a reverse "lady's night" and only charge women instead of the inverse.

A person who is part of a protected class can be refused service for any reason other than just because they are a protected class.

A woman walks into your bar. You can refuse to solve her because you don’t like the way she does her hair, or the color of her clothes. You can’t refuse to serve her because she’s a woman.

The standards and burdens are different in civil cases, and judges are not born-yesterday, gullible idiots who fall for such contrived nonsense?

The bar owner would face substantial incredulity from a judge if they claimed that they were turning down business because of how someone's hair looked. That said, the plaintiffs could strengthen their case showing a significant number of women were being denied service, or evidence the owner was misogynistic.

There is virtually zero chance that a bar would be found guilty of illegal discrimination for banning an individual woman unless there were witnesses or recordings establishing that they did so specifically on the basis of gender. Proving discrimination, even by the lower standards of civil court, generally requires either a well-documented pattern of behavior or (as mentioned above) evidence that the customer was banned due specifically to their gender.

> There is virtually zero chance that a bar would be found guilty of illegal discrimination for banning an individual woman

Especially since, federally at least, sex is not a protected class for public accommodation discrimination (it is for employment and housing discrimination.)

There's literal precedence for this, what are you on about?

You can refuse a sale to anyone. The reason for refusal just can’t be discriminatory.

The decision to refuse a sale is always discriminatory.

It just can't be discriminatory on the basis of a protected class.

... unless you are uniformly refusing service to everyone.

There are caveats to this.

If you uniformly refuse everyone for the same reason but it unduly affects a specific class then you can still be found guilty of discrimination of a protected class.

The canonical example of this is banning all headwear in a restaurant. This has been found to unfairly target certain religions and as such is considered a violation of civil rights.

If you banned all headwear sporting university football teams, that would most likely fly.

No, no, I mean uniformly refusing all service to everyone for no reason.

The two points at which you are not discriminating at all are uniformly providing and uniformly withholding services. Otherwise you are discriminating based on something, which may be fine or terrible depending on a whole bunch of details.

The discrimination theory you describe sounds disparate impact, which is a feature of employment but not public accommodation law, unless the intent was to discriminate on religion and the facial neutrality if the policy was pretextual.

Though the US cases on broad headwear bans I am familiar with are mostly not in discrimination, per se, but on failure to accommodate a religious practice grounds (again, a protection that applies in employment and education, not public accommodation, contexts.)

E.g., https://www.npr.org/sections/thetwo-way/2015/06/01/411213623... and

> The discrimination theory you describe

This is not theory, the courts have spoken on this. that you're calling this theory tells me you both don't know and haven't checked.

I'm very much not an expert, but as I've heard the terms used a legal theory that's supported by the courts is still a legal theory (as is one invalidated by the courts).

> The discrimination theory you describe ...

try again.

I don't know if it is what you intended, but your comment comes across as really rude, and even if you don't care about politeness in the name of efficiency or effectiveness or what have you it fails on those grounds as well as it gives me nothing to work from in addressing your complaint.

I didn't tell you to go after a strawman.

I didn't go after anything. I tried to address what looked like a misunderstanding.

Dude, dragonwriter said that what you were talking about seems like a specific thing the courts have applied to some areas and not to others.

Your reply seems to ignore the content of that post on the justification that the use of the word "theory" to refer to something that "the courts have ruled on" is such a glaring contradiction as to render the rest of the post irrelevant. If that reply was doing something else and I have misinterpreted, what was it?

Your mode of interaction here is obnoxious enough that I might abandon this thread.

nothing you say is going to change that the courts have ruled on this already.

I don't care if you feel reality is obnoxious, take your toys and go home. or stay. quite literally, nothing you do or say changes that the courts have ruled on this already.

Right. And my point was that dragonwriter said that the courts have ruled on it, but with more detail. That detail may be wrong (I don't know), but you've been talking past it while crowing about how everyone else is wrong for saying things they didn't say.

No, in the US you can be refused service, except that you cannot be discriminated against in public accommodations on the basis of status in a protected class.

Everyone is in multiple protected classes.

For public accommodations, all of the following are protected classes under Title II of the Civil Rights Act of 1964: race, color, religion, and national origin.

Everyone has a value on each of those axes, and everyone is protected against discrimination in public accommodations on the bases of each of those.

That’s how it is for medical supplies and medicine in the USA too, that’s how you can always get into a Costco without a card.

I thought there are guards who always check card in Costco.

Specifically for medical stuff Costco lets you through.

Alcohol too, in 14 states: https://www.tastingtable.com/1355636/non-members-buy-liquor-...

I could see them trying other shenanigans, like nerfing the vehicle in some way if you violate the TOS.

Just have someone else buy and "illegally" sell it to you.

umm they can 100% disable the software on the car.

In the same sense that Apple can.

Is it legal for them to do that though?

I'm interested, which part of this is unenforceable in the states (as an Australian)? It's quite a common clause, although not for cars and consumer goods, for competition reason.

It's probably a violation of the First Sale Doctrine, which is well established in US law.

First sale doctrine only applies to matters of copyrighted material.

it also doesn't apply to software aka all that tesla firmware

American law has many provisions, among them the First Sale Doctrine, where once money has changed hands a seller cannot restrict your use of a product.

Our Supreme Court famously applied this to inkjet cartridges, saying a printer maker can't take punitive action against you for refilling them: https://www.oyez.org/cases/2016/15-1189

What does Ferrari do to be able to enforce their rules?

The simple answer is that it's never been tested - no-one has tried to resell a "restricted" Ferrari.

Ferrari won't interfere with the sale of a vehicle, because they have no legal grounds to do so. However you do give up your ability to be waitlisted for upcoming models, which effectively prevents you from buying them new ever again.

Ferrari terminated the franchise agreement for the Wynn Las Vegas Ferrari dealership because Steve Wynn sold his LaFerrari before the 2 year window was up.

Ferrari can blacklist you from receiving allocations for new cars, but AFAIK they can't limit your access to the used market.

Sure they can. Someone who sells you a used car ends up blacklisted as well; people who own high end / collectable Ferraris wouldn't dare risk being blacklisted.

They famously blacklisted Top Gear for revealing that Ferrari was 'cheating' in their evaluations by arriving with an army of technicians and tuning the car to the Top Gear test track before allowing TG to review it, and delivering the car with tires much stickier than they came from the factory and so on. Every other journalist was gladly hiding all this bullshit because they didn't want to lose access to press cars.

Top Gear hosts said "if you happen to have one of the ____ models and would let us drive it, let us know" during an episode and someone took them up on it.

Ferrari blacklisted the owner for doing so.

it is unclear how first sale doctrine applies here.

I just provided that as an example most people are aware of. It could very well come into play if Tesla attempts to use IP laws to prevent resale. Any such provision from Tesla would generally fail under UCC, which generally only allows conditions on resale when there is an explicit agreement to act as a distributor or wholesaler.

Can you point to what part of the UCC you think generally prohibits/voids this type of contractual restriction (or case law saying it does if it does in a way that isn't obvious from a plain reading)?

I can't say I'm very familiar with the ins and outs, but I don't see anything that obviously does so glancing through it. There is some stuff about "sale or return" that I think is the distributors/wholesalers vs normal sale distinction that you're making, but nothing there seems relevant to this sort of clause.

The idea that you can't tell someone else what they can do with a thing once it has been sold traces back to common law. Here is a Supreme Court example from 1911:

"The right of alienation is one of the essential incidents of a right of general property in movables, and restraints upon alienation have been generally regarded as obnoxious to public policy [and have] been generally held void." -Miles Medical. v. Park

I can't point you to a specific code that prohibits this because it depends entirely on what grounds Tesla would claim the right to impose such restrictions. For example if they claim that parts of the Cybertruck are patented, the exhaustion doctrine would apply. From Wikipedia: "once an authorized sale of a patented article occurs, the patent holder's exclusive rights to control the use and sale of that article are said to be 'exhausted,' and the purchaser is free to use or resell that article without further restraint from patent law. However, under the repair and reconstruction doctrine, the patent owner retains the right to exclude purchasers of the articles from making the patented invention anew"

They're pretty plainly putting it in as a clause of the contract for sale aren't they... not claiming that IP law allows them to unilaterally enforce this (which is the point at which the first sale doctrine would come into play).

Thanks for the citation. It seems to be

1. A case prohibiting this sort of clause when selling to distributors while previously you claimed this sort of clause was only valid when selling to distributors. So I'm left wondering what the basis was for your previous post.

2. Overturned by Leegin Creative Leather Products, Inc. v. PSKS, Inc. Which instead introduces a "rule of reason" based approach for determining whether or not a contraint on resale is anticompetitive and prohibited.

3. Miles, and Leegin, both seem to be about manufacturers attempting to impose a minimum price on their goods. Tesla, strangely, instead seems to be attempting to impose a maximum price (hence the right of first refusal at a pre-defined price). As such the dicta in Leegin seems to suggest to me that attempting to impose a maximum price wouldn't violate the "rule of reason", but potentially only because it wasn't something the court considered at all, so it might violate another ruling.

I didn't intend to cite the case specifically as an analog, but the part I quoted as flavor as to how the law in general looks at nonpossessory interest in the sale of goods.

When this is litigated it will no doubt be complex and touch many areas of IP law, antitrust laws, UCC, and contract law. The contract law angle is interesting because of good faith and fair dealing, which you could make the argument that resale of the vehicle is not material to the purpose of the transaction.

I'd also love to see this blow up in Tesla's face when a lienholder takes possession of a Cybertruck and sells it at auction.

In what (b2c) area is it a common clause?

https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/rev... quickest example I could find. Also some share sales.

Regardless of whether it's legally enforceable or not, any legal challenges will take longer to litigate than the intended anti-scalping effect over the coming year.

Until it goes through the courts, they will likely refuse the transfer of Cybertruck ownership between Tesla accounts...which is surmountable but annoying enough to discourage certain buyers.

Refusal to transfer ownership between accounts would amount to tortious interference, at which point Tesla would be liable for at a minimum whatever the buyer was willing to pay for the vehicle plus legal fees.

This is of course a hypothetical because I doubt there will be any secondary market demand for Cybertrucks in the first year.

> because I doubt there will be any secondary market demand for Cybertrucks in the first year.

I find this surprising. Why do you think this?

People who I know that ordered one did it only for scalping rights

5 years ago a $100 preorder on a $40k electric truck was a sure bet. Everyone was hyped. People were willing to deal with its weird looks for an etruck.

Tesla stumbled and the market is now gone. Rivian nailed the high end luxury market and commercial vehicles, F-150 Lightning filled the "real truck" niche, Hummer EV for the people who wanted something that stood out. Chevy and Dodge will have their electric trucks out next year before Tesla can ramp production. Now the $40k single motor base model isn't happening which killed off the buyers who wanted a cheap option.

Not to mention the absolute dumpster fire that is Musk's personal brand, a lot of potential EV buyers won't touch him.

They might still be able to sell some to die hard Tesla fans, but there isn't enough broad appeal to create a secondary market.

I hear you and that’s all reasonable but at the same time, Donald Trump is running for president after being involved in a coup attempt and dozens of actions that should destroy his brand. But it strengthens it.

The Musk cultists will buy.

You seem to have missed a lot of news recently, Chevy has already announced they are delaying their truck at least another year because they have no hope of making them without losing money. Why do you think Stellantis will do any better than GM?

https://www.reuters.com/business/autos-transportation/gm-del...

Suppose maybe plaintiffs can win on SJ?

It'll be amusing if Tesla sues someone and Streisand-effects themselves, as well as losing the case.

> This is another situation where you can put anything you want in a contract, even if it is blatantly unenforceable. This is why contracts have severability clauses.

Severability clauses are often one of the unenforceable bits of a contract, though.

This is pretty common with supercars, there’s a “right of first refusal” where if you want to sell in the first year, you can only sell to the dealer.

Usually though it’s not enforceable aside from threats of blacklisting you from being able to order new vehicles. In practice I’m not sure how true that actually is if you have deep pockets.

The only interesting thing about Tesla doing this is that not only could they blacklist you, but they could blacklist the vehicle too to prevent it from getting service or even software updates, discouraging any buyers from buying it. Maybe ban it from superchargers. Tesla is very petty. Perhaps this will become common practice as cars get more connected to central services.

So what's Lina Khan waiting for? They need to regulate charging networks as common infrastructure and prevent Tesla owners from being backlisted for any reason. When you buy a Tesla, there's an expectation that you can use their charging network, even if you are in a lawsuit with them or breached a contract.

Tesla could even brick vehicles on a whim. For example, if the vehicle's owner didn't like one of Elmo's tweets. It would seem entirely in character for Tesla.

You can try to fight it in court, but that will take months, and your car is bricked in the meantime. Even if the court rules in your favor, Elmo can just ignore that, and your car remains bricked for years. Try to sell the car? Can't, it's bricked.

The fact that your scenarios and OP’s scenarios are entirely plausible is evidence that our regulators are living in the world of the 1900’s and/or are totally asleep at the wheel.

When I buy anything, including cars, I no longer desire any kind of relationship whatsoever with the manufacturer, and I should not be required to maintain one as a condition of purchasing that thing.

These companies are acting like clingy girlfriends.

Maybe your countries regulators are, mine wouldn't stand for it.

I mean, I think Naughty Old Mr Car has a clear incentive not to do that. Imagine what would happen to Tesla’s share price. He’d be margin called within hours.

It might take a while to grind through the courts and regulators, but the outcome would be obvious, and the markets would see that.

> The only interesting thing about Tesla doing this is that not only could they blacklist you, but they could blacklist the vehicle too to prevent it from getting service or even software updates, discouraging any buyers from buying it.

This would be illegal in Australia and many other countries. The ACCC wouldn't flinch in banning Tesla from the country.

If you can't say the same about your country, you should lobby for better consumer laws.

I've had really expensive software that the sales agreement reads very similar in that it stipulates that if you get to the point of wanting to sell the software, the developer gets right of first refusal to buy it back. They were so protective of the price of the software, they did not want it dinged by being sold on eBay type of situations.

FWIW this isn’t totally unprecedented among exotic cars — Ferrari has / had slightly different wording but largely the same impact in their Right of Refusal docs, a quick google reveals others finding similar clauses with different exotic car brands.

Maybe Tesla expects a limited run and speculation. Makes no sense for a volume car.

Do other manufacturers try to restrict resale

https://www.roadandtrack.com/news/a45429246/porsche-to-fight...

https://www.roadandtrack.com/news/a44491972/rolls-royce-has-...

https://www.roadandtrack.com/news/a40756702/gm-to-limit-warr...

I can't decide if this feels like an attempt to prevent scalping or anticompetitive behavior.

Once I'm an owner interested in selling I become a competitor to Tesla. Contractually preventing me from selling locks everyone but Tesla out of the market.

Why not both?

I didn't mean to make it exclusive, at the time I was seeing most comments here assuming its just a move against market scalping

Good. A bunch of scalping dickheads scooped up a lot of the early Rivians and resold them for twice as much.

I keep seeing Rivians for sale on FB Marketplace for $100k+, with low miles. I thought it was just dickheads who overspent on a vehicle that turned out to be not very useful. Now it seems it's just poorly disguised scalping? I do not understand the obsession with waitlisted electric vehicles.

Rivian made scalping extra valuable by freezing the price for early reservation holders and raising the price for later reservation holders. Further, vehicles purchased in 2022 may qualify for a tax break while most ‘23 Rivian purchased will be priced out (even if their buyers are not). These are stacked on whatever scalping premium exists.

Fine I’ll rent mine out for rides for a year first

Easy

US laws are controlled by and made for the corps.

It’s to prevent markups from scalpers

Probably aimed mostly at scalpers.

Translation: Tesla thinks the quality of the Cybertruck is going to be terrible.

Actual translation: Tesla doesn't want people scalping their cars, and are using a technique many other manufacturers do.

Tesla is probably simply trying to eliminate scalping. One per customer and no reselling is a common way to do so. I'm quite far from Tesla fanboyism, but this seems reasonable to me.

Do you not feel that you own the things you buy?

I feel like I can buy things while agreeing to a contract that constrains what I do with them. Don't you?

Absolutely not.

You can, but then you don't actually own the thing.

Far too simplistic a sentiment.

Try buying real estate, even something simple like residential. The last home I bought was 1) part of an HOA with a full set of restrictions and responsibilities; 2) the sales contract explicitly excluded mineral rights.... existing in a neighborhood which was known to have commercially viable oil reserves under the ground this wasn't surprising; and 3) had any number of easements for things like utility access and the like. And I assure you, other than the mineral rights exclusion which I did not own, we were in all ways treated by the law as owners. Absolutely others had certain rights which I agreed to at the time of sale: but ultimately I was the owner and if push came to shove I'd be treated as such by the law. My currently place isn't so dissimilar... save for any mention of mineral rights... though there are even more complex arrangements of common property co-operative ownership and management as I now live in a townhouse, in a complex of townhouses, built partially above a retail property.

There is certainly nuance, but I do stand by my attitude here. In the case of a house, for instance, if I have a mortgage, or I'm part of an HOA, etc., then I don't own the property. At least, I'm not the sole owner. I'm sharing ownership with other people.

Market dynamics and all that. If I buy a car, it’s mine and I can do whatever I want to it at my own consequence.

But should you? '"Market dynamics", shrug' is all too often used to excuse the bad parts of capitalism.

Should you be able to freely buy things and sell things you own? Yes, you should and this is not an aspect of capitalism. Why would that not exist in a socialist or other economic system?

Not you shouldn't be able hoard the supply of a thing and double its price. Don't play stupid like the intent of the purchase doesn't have consequences on your rights to sell an asset.

I would like to to state a very specific thing: I’m both a socialist and fine with price gouging for tesla trucks, and I don’t feel that’s a hypocritical thought.

Not all “things” are equal though. When we’re talking about materials required for living being hoarded, I’ll be right there with you. When luxury automobiles and tickets to Taylor Swift are the topic, I’m fine with the market deciding.

You CAN do whatever you want. And Tesla can choose to not sell to you in the future.

If they wanted to eliminate scalping then can just enforce purchase limits.

This does not seem reasonable or legal at all.

Maybe a little less now, but at one point it seemed likely that initial purchasers of the cybertruck could immediately resell it for a $20k, maybe $30-50K profit. Thus it only takes one to highly incentivize people.

That won’t eliminate scalping. Reduce, yes. But that won’t prevent people from scalping one at a time. Get some friends and family in on it and you can move a few (provided you all can get one while supplies are limited).

Or do what GM is doing with the Z06, which is to offer the warranty only to the original purchaser for the first 6 months (IIRC).

If that was the case, wouldn't it be more reasonable just offer the vehicle only on one 1 year with 0% APR, but with restrictions (no early buy out, no third party sale) that would discourage scalping?

It’s unreasonable on principle.

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