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Comment by cobrausn | Hacker News Reader

So, this might seem a silly question (I find the ban ludicrous but this is worth asking).

Why not just allow certain dealers, approved by Musk himself for all that matters, to become 'authorized Tesla dealers'? Why does Tesla insist on direct-to-consumer sales, even to the point of not being able to do so in large marketplaces?

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Probably similar to the reasons Apple introduced the Apple Stores. As explained in the article, Tesla feel that typical dealerships aren't set up or motivated to do the education necessary to sell all-electric cars, so they want to do that themselves.

Also, a large consideration in buying an unusual new type of car is service and support. If I was buying a dealership's #3 brand, I'd expect that in a few years they'd drop that brand, and I'd have to look elsewhere for warranty service (this has happened to me twice now with Subarus, for example). Tesla's addressed this by setting up a separate Texas-only subsidiary to handle service, but apparently they can't legally do the same for sales.

Musk clearly wants Tesla to sell all of their products themselves ala Apple. His stated reason was that car dealer's cannot properly advertise the benefits of electric cars without undermining their gasoline car business and so he doesn't trust them to properly sell the car.

As a Prius owner I can attest to this, even if just a little. The dealerships I talked to over the past 4 years were excited to sell me a Prius when I called over the phone (and when demand was so high they had to order them and you agreed to MSRP to place said order).

However, showing up on the lot, they generally didn't have one to show you (again, the demand issue) and would push me towards an in stock Camry or similar.

Even when I made it explicitly clear I wanted a Prius there was a bunch of FUD acted out by the sales reps. "Yea, the sticker says 45mpg, but that's only in the city where you can use the battery". "Hey Jon, what'd that lady say she got on her commut? 37mpg?" I was truly shocked. I will also note that this happened more at multi-franchise dealerships.

That does not explain away others who would relish the idea of setting up an electric only dealership. He is using an pretty damn thin excuse to not allow others to sell the cars. Sorry, but there are many other like minded individuals who would very much sell the cars the way he wants, they may even improve on the methods.

Local dealers for electrics would provide the benefit of tighter integration with supporting businesses, from those who install the requisite plugs at homes, to marketing the need of stations to employers so that their employees can charge up at work. There are many many benefits to having local, private dealers.

> There are many many benefits to having local, private dealers.

Oh, so is that why they are mandatory through legislation? Usually if something has "many many benefits", the behavior will spontaneously arise and not need to be government mandated

I thought the regulation was to deter monopolization from manufacturers, not to prop up the dealership business.

If traditional dealers are so great, why do they rank about on par with politicians (maybe even below) in public opinion? What value do they add?

Seems like rent-seeking via political clout to me...

Local dealers don't help the consumer, they just make buying a car feel awful and add unnecessary middlemen making the car more expensive to the consumer. Consumers should be able to order direct from the factory without all the unnecessary useless and sleazy middleman who do nothing of value and still expect to profit.

The fact that standard practice at nearly all car dealerships is the old good cop bad cop routine between the salesman and the floor manager should tell you you're always being hustled. Whether you can win or not is irrelevant, you lost by being forced to play to begin with.

The issue is they would have to give the dealer a cut- direct to consumer they can keep the price lower and the margin higher.

The state laws tend to not only make using a dealership mandatory, but make it nigh impossible to sever the relationship once established.

That's why so many horrible dealerships are allowed to continue operating.

In addition to the "Apple business model," the Model S is an extraordinarily expensive car which is also quite a bit different from basically every other car on the market. As a hypothetical consumer, if I were to make such a monumental purchase for just a car, a car which is moreover out of the mainstream in terms of its basic method of operation, I'd want the absolute best service and support humanly possible for it, and I wouldn't expect to get that from a third-party dealer generally.

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