Governor Snyder signs a law to ban Tesla direct sales in Michigan | Hacker News Reader

Governor Snyder signs a law to ban Tesla direct sales in Michigan

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I believe that this law is in direct violation of the commerce clause[1]. The commerce clause was designed to prevent tarrifs from being placed on products from one state being sold in another state. They wanted to prevent inter-state trade wars. Being forced to go thru a dealer network that (theoretically) adds no value while extracting a cut of sales is a form of a tarrif (or at least, I think it is arguably one).

Therefore, I think it might be time for Tesla to take this up as a federal matter.

I believe Tesla's constitutional rights are being violated in the states that do not allow them to operate their own stores.[2]

[1] "Congress shall have the power to regulate commerce ... among the several states ..." At the time the constitution was written, the definition of regulate was something like "to keep free of obstruction, to allow to occur without hinderance".

[2] This is completely separate from regulations that require car stores to operate safely, e.g.: if the state required that service departments have barriers around pits to keep people from falling in, that would be fine, and Tesla could comply when they open a service department. But forcing a business model on people is quite different from protecting public safety.

This wouldn't be a violation of the commerce clause per se. The commerce clause just says that the federal government has the authority to regulate interstate commerce. In other words, the US legislature could pass a law prohibiting these restrictions on Tesla sales, and that law would be constitutional.

> The commerce clause just says that the federal government has the authority to regulate interstate commerce.

This is not completely correct. Let me expand a little bit even though it is not applicable here. There is something called the "dormant" commerce clause (also referred to as the "negative" commerce clause) doctrine. This doctrine basically prohibits states from favoring in state commercial actors at the expense of out of state actors. Think protectionist legislation. Therefore, there is a lot more to the commerce clause than simply allowing the federal government to regulate interstate commerce.

Ah yes, I have read about that before, but had forgotten it. It basically seems like a shortcut whereby federal courts can rule against certain state laws without the need of a specific federal law. It seems in practice to be as if Congress, as authorized by the Commerce Clause, had passed some blanket law banning protectionist state laws.

"Regulate interstate commerce" was sent to hallucinogenic new levels with the Supreme Court ruling in the Raich case. TL;DR - feds can "regulate" (via SWAT-type police raid) a terminally ill old lady's doctor-prescribed-and-monitored state-legal for-personal-use-only marijuana plants because her doing so decreased demand in an illegal interstate market.

Michigan is not discriminating against Tesla. They are not saying "only Tesla may not sell direct to consumer." Instead, they are saying "No auto manufacturer, regardless of their state, may sell direct to consumer." Thus, no commerce clause violation.

What would stop Musk from making a company whose sole purpose was to be a Tesla dealership? It would buy cars from Tesla, sell to consumers, and sell Service Arrangements with Tesla, etc.

Usually the dealer laws prohibit manufacturer-owned dealerships

What about a common owner then?

> Michigan is not discriminating against Tesla. They are not saying "only Tesla may not sell direct to consumer."

I think they took the safest approach

http://www.engadget.com/2014/07/17/tesla-motors-us-sales/

Decent article summarizing why Tesla can't sell directly.

TLDR: Because auto dealers don't want to have to compete directly with manufacturers.

Which makes no sense, seeing as how Tesla doesn't have any dealers that would compete with them, selling their own cars.

I like the guy I bought my car from on one level, but if it saves me money on my next car purchase, well, so long dealerships.

So Michigan could legislate that any business is not permitted to sell directly to consumers. Great state to live in.

The commerce clause may be violated if the effect is discrimination.

"It is the effect upon commerce, not the source of the injury, which is the criterion." - N.L.R.B. v. JONES & LAUGHLIN STEEL CORP., 301 U.S. 1 (1937) [http://laws.findlaw.com/us/301/1.html]

In the country I come from, corruption is rampant, and it makes governments create anti-public, pro-corporations laws and regulations. But there it's still called "corruption". Here, in US, it is called "Lobbying", and is official.

I call it corruption as well. Any time the government violates its own laws, or violates human rights, that's corrupt.

I think americans believe their government is less corrupt in part because corruption is not identified as such.

Illegal domestic spying is corrupt, and a crime... yet no charges have been filed (for instance). This matter here, is possibly in an area where the law isn't as settled, so corruption is an opinion, rather than a fact, but an opinion I would agree with.

Another example of regulation being used to protect older, more established businesses from newer entrants that would supplant them.

Sigh.

Reglation, corruption, lobbying... Its all the same thing.

How are these people justifying these changes to their constituents? It's pretty hard to justify mucking with the free markets except to protected vested interests. Most of the time, these vested interests have very little to do with the voters.

I'd wager that in Michigan, a large part of the constituency works for non-Tesla car manufacturers. They might be just fine with it.

I still think they would be more convincing attempting to get Tesla to sell to dealerships (lol) or to attempt to get Tesla to move some of the manufacturing to Detroit. I can't see this being positive for the taxpayers of Michigan for more than a few years.

I think you underestimate the brazenness with which politicians can approach these issues. George W. Bush practically boasted that he had deliberately abandoned free market principles. You might be overestimating how much love people have for the free market as they understand it.

They "justify" it by claiming that direct sales would threaten the jobs of the dealer industry, not that it actually justifies anything. By that reasoning, we should not have allowed manufacturing to become mechanized, because "think of the factory workers!".

No justification is required because it's pretty much baked into the mentality of the Midwest. The auto industry is what drives the Michigan economy (at least its most populous areas). Therefore most constituents not only don't mind, but likely fervently support such laws. The same could be said for the United Auto Workers. Pretty much the opposite of the free market, yet most people in Michigan support it because either they or somebody they know relies on the benefits created by the union.

Further, few people in Michigan can afford a new Ford, let alone a $60,000 electric car. If Tesla wants to lobby for free market economics, Michigan is probably the very last state they should be trying to convince.

Your generalizations about Michigan are misinformed.

There are many people in Michigan that think that companies that sell things should be able to sell them to people that want to buy them. There are also many people that can afford a Tesla.

Your generalizations about Michigan are misinformed.

Not really. I lived in Michigan for several years.

Can craftsmen and other non-auto manufacturers sell directly in Michigan, or are they also forced to hire distributors and retailers? What crime is that law supposed to prevent?

Snyder gets a lot of money from Ford, GM, et. al.

The United Auto Workers gave the DGA about $1 million, according to MCFN. The union was the largest donor from Michigan, followed by the Service Employees International Union, the Michigan Regional Council of Carpenters, Ford Motor Company and Caidan Management. http://www.mlive.com/lansing-news/index.ssf/2014/10/michigan...

Couldn't somebody open a dealership that offers Tesla vehicles where dealers are replaced with touch screens that walk you through all the available options, scheduling test drives, and settling on payment? Staff would be there to make sure questions are answered, machines are operating properly, and verifying paperwork. I know nothing about this industry so I could be totally off base but that seems like a decent way to jab back at an aging system.

That's how Tesla stores currently work. But those stores are illegal too.

Does this really surprise anybody? Remember which state Detroit is in?

This also blocks GM/Ford/Chrysler from selling directly to the consumer. This isn't specifically Tesla focused, but is favoring the auto dealer network which wants to remain relevant and get their cut.

Since only Tesla actually wants to sell direct (and in fact needs to due to the unique nature of their product), this does in effect only target Tesla. It just doesn't look so targeted to the layperson, which is likely why they can get away with this.

GM/Ford/Chrysler have a symbiotic relationship with their dealers - they both need each other to survive. Neither wants to see a new upstart that might someday eat their lunch.

Presumably if the makers had a do-over, they might try direct to the consumer themselves, but the present conditions make that impossible.

Uh no they don't. The dealers need the manufacturers to survive, the manufacturers could easily open their own dealerships and sell their cars cheaper while running the old dealers out of business.

The dealerships do not benefit the manufacturer.

What is his problem? I think they are all trying every-possible-trick-under-their-belly to slow down the storm called TESLA. The day TESLA becomes mainstream the mafia of car dealers, oil rigs will go down the drain. NO MORE OIL.

You do understand that electricity is still needed to charge these cars, right, and that a lot of that energy comes from oil (or worse, coal).

When I was a kid, I saw the movie Logans Run (1970s). They made it to washington DC and found a car. They didn't know what it was, but they shined a light on it, and it started to activate and so they conclduded "maybe this thing is powered by the sun"... and it was.

Well, it's been 40 years since that movie was made. Alas, a solar powered car may still be many years off... but the elegance of it is certainly extremely appealing.

One problem: I love the Tesla's expansive sunroof. Would want solar collectors that are at least semi-transparent to light.

There just isn't enough surface area. A Model S has a roof area of around 9m^2. The sun provides about 1000W/m^2 on a clear day at high noon when directly overhead, so with 100% efficient solar cells on a perfect day, you'd get around 9kW of electricity. A Model S goes about 4 miles per kWh when it's doing well, so in this ideal situation you'd top out at around 36MPH. In the real world, the sun isn't directly overhead, and real solar cells have more like 20% efficiency, so cut that number down by a factor of ten or more.

The best way to build a solar-powered car would be to have a battery-powered car that gets recharged from solar energy. Basically, a Model S and a home solar generating system.

That illustrates the advantage of electric cars, even if the electricity is currently generated by fossil fuels.

I recently ballparked the cost of a home solar charger for my Leaf EV. Came out around half the price of the car ... not cheap, but feasible for someone serious about it.

I do have a propane-powered electrical generator for emergency/backup home power. Some day I'll try charging the Leaf with it.

Have you ever worked out your approximate cost per kWh for the generator? I imagine it's painful compared to what you get from the power company, but I'd be curious to know just how painful.

About $1.23/kWh.

Ad verbiage for the allegedly 3250 running watts generator states "engine run time of 10 hours at 50% on a common 20Lb (gas grill type) cylinder". So that's under $2 for 1.625kWh, which is roughly the power draw for recharging the Nissan Leaf in question, which takes 20 hours - costing upwards of $40. More to your point, that's about $1.23/kWh. Not cheap, but a 10x markup is appropriate and acceptable for emergency needs.

Thanks. That sounds pretty reasonable for a generator, considering.

You probably mean 0.9m^2. 9m^2 is a decent size bedroom.

I shouldn't have said "roof," I meant the whole vertical-facing area of the car.

Unfortunately that was only science fiction. I don't think the sunlight that lands on a car would be sufficient by itself to charge the system to any acceptable level.

My back-of-the-envelope calculation, if covering an entire car with solar panels... Assumptions: car width is 5 ft, hood is 5 ft, roof is 3 ft, and trunk is 4 ft makes 60 square feet for the whole car. (Note, this isn't the dimensions from a Tesla, but from the older cars that I remember). High output solar panels are 15 watts per sq ft. So 900 watts output max (lets round it off to 1 kilowatt to make the math easy).

Now taking the rated specs from a Model S, a 60 kWh battery gets you 200 miles. So .3 kWh per mile. Therefore, leaving you car to recharge in the sun for 8 hours while you are at work, will get you home if you live within 25 miles. Assuming maximum efficiency of course. Note, that you can't put 60 sq feet of solar panels on the Model S, due to the long slope of the front and back windows, and redesigning it so that it has the non-window surface areas of my old 85 Chevy would make it less aerodynamic. But this gives you a good upper bound if I did my math right.

or better, nuclear

Nuclear's only an option if we have breeder reactors that can reprocess all the waste into non-radioactive outputs. In the meantime you still have all that radioactive plumbing being replaced that needs to be handled, and I really don't want that being buried in my watershed, food bowl, or anywhere that might end up being a watershed or food bowl for people elsewhere in space and time.

So find a way to build a nuclear reactor with non-radioactive outputs, built with materials that do not corrode due to the radiation, and we have a deal!

Oh, and the final result needs to have a higher EROEI than current state-of-the-art solar panels.

We can call it (Tesla) incremental departure from oil. Down the line, we might be able to charge tesla under lot lesser time than what it takes today. May be we will have solar tesla or self charging tesla.

At least, these constant rip-offs of every n month this fluid change will go away.

It might be a minor improvement, but it's still an improvement.

Oil burned in a plant is higher efficiency than when burned in individual, smaller-scale engines.

Stated as a corollary: imagine how dirty having per-car coal furnaces would be...

Name one "oil" fired power plant?

Coal yes, nat gas sure, hyrdo (which is where alot of MI power comes from) you bet yea but I have not seen a oil powered electric plant.

further even is such a thing does exist, generating electricity has a much high efficiency then the IC engine which is by for one of the least efficient systems there is

If customer demand for electricity grows high enough, there's no reason oil-fired electrical plants won't arise on a large scale. Efficiency issues can be addressed much better when implemented on a scale much larger than a car engine.

https://en.wikipedia.org/wiki/List_of_power_stations_in_Mich...

Also, while Michigan has a lot of hydroelectric stations, they don't account for more than a few percent of the state's electricity.

Anybody want to start a Tesla dealership in Dearborn?

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