Tesla runs into trouble, again | Hacker News Reader

Tesla runs into trouble, again

washingtonpost.com

35 pointsAllisonHX23 comments

How much longer does America have at this rate? We have fallen behind in broadband speeds, we have no idea what a high speed train is, China is now the #1 economy in the world, our adaption of renewable is at a snails pace, we spend a million dollars to blow up a hill with an enemy flag in it in the Middle East, and our medical system is multiple times more expensive with less favorable outcomes in many cases. It's as if we are living on a borrowed memory of a former self. And if we just keep telling ourselves we are the best and all is super duper, then that makes it so. I can even imagine Congress passing a law that declares it so.

This is a bit dramatic, but the sentiment that we (America) should be doing better in a number of areas is certainly appropriate.

There will always be people who fear change and want to protect the status quo, especially when lots of money is involved.

Dealerships lobbying to protect their interests isn't particularly shocking, nor is the fact that politicians are susceptible to lobbying. That happens in China too I'm pretty sure.

I actually don't think this is dramatic. America is not competitive anymore. Large monopolistic rent collectors are really holding back progress, and honestly it wouldn't be a stretch to assume people would consider leaving the country for opportunity elsewhere. As pointed out above, the internet is much slower and becoming restricted, media companies are dictating content and bandwith distribution, our infrastructure is from the 19th century (railways, motorways) and our freedom is being eroded daily. Tesla has single handedly tried to fix oil dependency and the energy crisis, and they are literally not being allowed to sell their cars. It is going to be an interesting 5 years going forward if nothing changes.

These are all reasons I left the US in 2007; I saw the writing on the wall. Preparing to move to south america at this point, because as Doug Stanhope says, this continent is done.

Thats pretty Galt. Where did you move too, what industry are you in?

I'm in the legal/IT industry, with side projects in digital audio production and studio design. Moved to Canada first, so I can escape some of the economic handcuffs, and now I'm saving my pennies for a move to Argentina.

Leaving aside how absurd this is, on balance this will have little effect on Tesla. Detroit is the bankrupt remnants of the world auto capital (of ICE cars). I would be surprised if Michigan represents a large share of business for Tesla, which is supply constrained anyway. Eventually, they will be forced to change tact, and lobby them to relocate when GM can no longer compete and folds for a second time.

Tesla's products are obviously too good for having dealerships to win in the long term. When the voice of the people demanding for Teslas is going to be stronger than the dealership's lobbyists these laws will be overturned.

Currently the people that can afford a Tesla can probably afford to buy it in another state.

Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise?

Is it simply because it's less profitable than direct sales? Is it not laissez-faire enough?

> Seriously though, what's so bad about distributing Tesla vehicles through a dealership franchise?

From the consumer standpoint? That's easy: 1) another middleman adds to the price of the product and 2) there is a reason why people hate car salesmen.

From Tesla's point of view? Who's going to do this? You're talking about a car that sells single digits per year in all but very large or very specialized markets. So, the income per year for a franchise would be less than $100,000 per year at best. Tesla would have to subsidize that franchise to such an extent that it would effectively be selling direct anyway. But I suspect that there are bunch of franchise control laws that would cause issues, too.

The biggest issue everybody has is that these laws are blatantly protecting local car sales franchise monopolies with absolutely no justification from any consumer protection perspective.

Tesla is trying to keep tight control over the availability of spare parts and diagnostics tools for now, probably because Musk doesn't want any bad press from problems with a salvaged Tesla someone has improperly repaired. This is likely to cause them problems with resale value in a few years once the warranties on the first cars start expiring, and drive up insurance prices for the Model 3.

See the case of the abandoned Stretchla project[1] and the other news report of a salvage titled car that the company refuses to enable charging on because it was worked on by an unapproved mechanic.

[1]: http://cafeelectric.com/stretchla/

There's nothing inherently bad about it.

But why shouldn't an automaker be free to decide how it distributes its product?

I think the answer might simply be that it's unnecessary, and that the dealership model costs consumers money. Unnecessary because dealerships primarily make their money through servicing and Telsa, because there's no internal combustion engine, just doesn't have a lot of those costs. No oil changes. No fuel system cleanings. Etc etc.

Now. What I don't like about this argument is sort of how snarky everyone gets toward people hostile toward Tesla. The way they do it probably makes more sense than the status quo. But being from the midwest, I can definitely get how threatening that can be. That's for sure not an excuse, but people do need to realize in their rhetoric that disruption hurts sometimes. And we shouldn't be blind to that.

It was just a genuine question. I'm amazed that I suffered downvotes because of it, but it just goes to show that my instincts were correct (hence the throwaway account), and that it would be perceived as a tone-deaf, buffoonish question.

So much for the old adage: "there are no stupid questions"

I understand that people are downvoting this because of the obvious "it impacts freedom" downside.

However before downvoting please consider that the financial aspects are by far not clear to everyone, especially not to the programmer audience of HN.

I too would love to read an earnest analysis of the impact on Tesla's sales were they to restructure their Michigan sales efforts to comply with the law by starting to use middlemen.

Edit: Even the article itself throws that question up: "it’s not actually obvious that Tesla’s decision to operate without dealers will end up being a more profitable business model in the long run, given the valuable marketing, sales, and maintenance services that many local dealers provide."

I did not downvote - but if I had it wouldn't have been about freedom, it would have been about prices and corruption. How much overhead do all those pointless, and expensive dealer employees add to the cost of my car?

And in particular how much do the Dealers themselves add - these are very rich men, and all so because the state has decided to force me to pay for their existence. And how much of that money goes back to the Capitol to line politicians pockets?

Leading questions and implications, but no answers. You bring up costs without even doing a rough attempt at quantifying them and seem to ignore that dealers provide value too by making it unnecessary for producers to maintain a sales location, sales personnel, local marketing and shield producers from having to deal with some maintenance actions.

As i said, an earnest explanation is warranted.

My goal was not to quantify anything - nor provide you with any answers except to the question about why would someone downvote a comment that asks "What so bad about distributing Tesla vehicles through a dealership franchise?"

To some people - like myself who have had universally horrific and expensive experiences with dealerships (and in my case the much better, cheaper, and competent experiences with non-dealer mechanics, and used car salesmen of all people.) dealers are bad and their existence should not be propagated. They are bad enough that I could easily downvote the question on that alone (without the political angle which lucio summed up nicely) if I was fast with the downvote button.

Explaining that and that alone was my goal - and one it looks like I failed at.

For context: You probably failed because i've never dealt with car dealers. I live in germany and for the past 32 years have never even had a car in mine or my direct relatives' possession. I don't even have a license.

If dealers provide "value", why a law is required to "protect" them?

"It is error alone which needs the support of government. Truth can stand by itself."

Because it's additional overhead where none is needed.

Is this only happening in America?

Unknown, but it seems like a stance that would be fairly unique to (a few states in) USA. Norway, for example, where Tesla outsells all other cars, do not enforce this.

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